ALTHOUGH SOME STILL dispute the science, companies, authorities and, increasingly, governments are now acting on the consensus scientific opinion that climate change is the biggest threat to society. With the onus on countries to clean up their energy sources, a new capital market for all things green has thrown open its doors to the world’s financial institutions. Many banks now insist on coherent environmental policies on the deals they finance. International agreements on renewable energy are prompting governments to clean up, and that will require a lot of money. Banks and other financial institutions are readying themselves to fight for their share.
The trend is readily apparent too in central and eastern Europe. The region’s local banks lag slightly behind their western counterparts but green finance is a hot a topic in the region. With many renewable energy projects springing up across the area, financial institutions are jumping in. Many are launching funds that either solely make eco-related investments or cite sustainable criteria as being the basis for, or at least included in, their investment portfolios.
This is not surprising. There is a huge demand for energy in the region’s emerging markets and a sentiment on climate change that is only getting stronger.