Why Sustainable Finance is Important

The video discusses the importance of sustainable finance, highlighting the limitations of traditional finance in accounting for social and environmental externalities. It provides examples of these externalities, such as pollution and health impacts, and emphasizes the need to consider them for long-term performance. The video also explores future market trends, including resource scarcity and increased demand for food, energy, and water. Key drivers for incorporating externalities into finance, such as shareholder and consumer pressure, are also discussed.

Why is sustainable finance considered important compared to traditional finance?

• It is less profitable than traditional finance.

• It considers externalities and long-term performance.

• It ignores social and environmental issues.

• It focuses solely on short-term profits.

What is expected to happen to food demand by 2030?

• It will remain the same.

• It will increase by 20%.

• It will decrease by 50%.

• It will increase by 50%.

Which of the following is NOT a key driver for incorporating externalities into finance?

• Climate risk disclosure

• Consumer pressure

• Ignoring biodiversity loss

• Shareholder pressure

What does CDP stand for in the context of sustainable finance?

• Corporate Development Plan

• Climate Data Program

• Community Development Project

• Carbon Disclosure Project

How do companies benefit financially by addressing social and environmental criteria?

• They face more regulatory fines.

• They perform better financially.

• They lose consumer trust.

• They have higher operational costs.