Green Finance

New market challenges

In order to fulfill the goals of the Green Deal, Taxonomy and other regulation that have now been approved, the whole market will soon have to face new challenges. According to the EU Commission, such challenges can be divided into three groups:

 

Risk-management associated with climate change.

Analysis of the potential risks for any project and/or activity arising from the future changes of the surrounding environment. Such risks are classified as physical, when associated with the climate and environmental modifications of the surrounding environment, or transitional, when associated with the alteration of the social, economic and cultural situation. Examples of physical risks are temperature variation, sea level, deforestation, etc. Examples of transitional risks are economical fluctuation, political outlooks, new technologies, modifi cation of the social environment, etc.

 

Preservation of the natural assets.

Quantitative, qualitative and economic analysis of the natural assets currently at disposal and preservation of the biodiversity through the estimate and management of future scenarios. This field is strongly related with the development of green-urban environments, sustainable infrastructures, preservation and regeneration of the green assets within urban and industrial areas.

 

Green finance.

Which focuses on how the finance and investment sectors could support a sustainable development for the whole EU economy. This field requires several steps and the ones currently being discussed is how to rationally identify and classify the financial assets and operations under specific sustainable-related criteria, which could be related to each activity/project or to specific indicators. This field is strictly connected with the concepts of taxonomy and green bonds, which are already a strong reality within the financial market.