"By sustainable finance, we are asking the financial services sector worldwide to take on a social, environmental and developmental responsibility," stated Minister for Finance and Financial Services Edward Scicluna in his concluding address during a conference on the sustainability of the financial sector in Malta, organised by the Finance Forum at the Corinthia Hotel in St. Julians.
The Minister for Finance and Financial Services recalled how Malta was the country which brought to the attention of the world, the need to take on climate change as an international responsibility at the UN level in the interest of present and future generations. Malta emphasised the need for a comprehensive global strategy to protect the climate as part of an effort to ensure that the planet remains fit to sustain life.
Indeed, the Maltese initiative was the beginning of a comprehensive process that led to the United Nations Framework Convention on Climate Change (UNFCCC) and later the Kyoto Protocol (KP). Various other agreements followed suit.
"All these agreements cannot subsist without finance. Finance is crucial for these agreements to be successful. However, the financial sector needs to evolve to start considering both environmental and social obligations," explained the Minister for Finance and Financial Services.
Apart from an environmental concern with regards to climate change and the implied health concerns, the financial sector has a vested interest. Profits and market stability may also be hampered with climate change, and thus the call towards the sustainability of the financial sector is stronger than it ever was.
Cognisant of the need for the financial sector to be socially and environmentally responsible, the United Nations (UN) introduced the Addis Ababa Action Agenda in 2015. This provided a new global framework for financing sustainable development that aligns all financing flows and policies with economic, social and environmental priorities.
In the European Union (EU), the European Commission presented a European Green Deal as the new EU growth strategy with the aim of attaining a sustainable financial system as a long-term investment, whilst recognising that sustainability poses both a direct and an indirect risk to the financial sector.