Top Trends in Finance: Does offering sustainable finance really benefit your business?

According to the World Economic Forum, climate change costs the world over $16M every hour.  

We need to make adjustments as a collective to address climate change. However, for businesses and consumers looking to lessen their long-term impact, this often doesn’t come for free. In order to make more sustainable choices, we need to be able to access finance to fund them.  

Often, when you hear the concept of sustainable finance, it will go hand in hand with ESG. Sustainable finance considers environmental, social and governance (ESG) in investments. For secured finance lenders, sustainable finance involves offering finance for assets that support sustainability initiatives, such as renewable energy sources or conservation projects. According to our eBook on finance trends, over half of lenders believe that the increased focus on ESG will have a moderate but positive effect on their business. 

Sustainable finance offers lenders a great opportunity to address the impact their business has on the world while also opening opportunities for new products and a wider clientele. But what is sustainable finance, and should lenders be concerned about it? 

More opportunities for growth 

Consumers and businesses alike are shifting towards more sustainable products. And there is data to prove this – a study by NielsenIQ found that 78% of consumers think a sustainable lifestyle is important to them. Businesses are increasingly setting targets for themselves to address sustainability, whether that’s through moving their company vehicles to an electric option or switching to more eco-friendly materials in their production line. There are plenty of opportunities for businesses to react to climate change,  which can support their growth. 

However, it is important to note that consumers don’t want to work with businesses that offer sustainable finance only as a marketing ploy. Therefore, it is crucial to offer products that genuinely tackle sustainability and support concrete initiatives. 

And, of course, doing your part for the world 

This one may seem obvious, but it really can’t be understated how important it is for lenders to play their part. Sustainable assets often require access to funding due to the high costs of purchasing outright, so lenders hold a lot of power in the choices they make. By offering sustainable finance products, lenders can have a direct impact on the global efforts to look after the planet. For example, offering loans to a business looking to invest in renewable energy apparatus means you have contributed to reducing their CO2 emissions. As a secured finance lender, sustainable finance is a great way to address your Scope 3 emissions. 

Offering sustainable finance options can result in significant benefits for your business. When diversifying with new sustainable products and services, using scalable technology will make this much easier. Solifi Open Finance Platform offers flexible solutions that adapt and support your business requirements.