Insights for Leaders
Once an obscure tool of altruistic leaders and investors, sustainable finance crept toward mainstream acceptance and widespread use over the last decade. Then came 2020, with a global pandemic, an American racial reckoning, and a series of environmental disasters. In the course of a few months, what had long remained a peripheral financing alternative transformed into something approaching a corporate mandate.
“Sustainability isn’t just a concept anymore,” says Thomas Kim, a partner in Sidley’s Washington, D.C. office. “Five to seven years ago, this was kind of a fringe issue. This year, we’ve seen what business sustainability means in very concrete terms.”
Yet if these crises have taught corporate leaders anything, it’s that talk means nothing without tangible action. In the world of sustainable finance, taking such action is rarely simple. For despite all the rhetoric, fundamental questions about sustainable finance remain – made more complicated by a steady stream of new regulations, reporting frameworks and products. Questions like:
Which products are right for my company?
Who regulates ESG products and practices – and what do those regulations entail?
How do I ensure proper reporting so I can avoid the appearance of “green washing”?
In what follows, we will answer those and other questions and provide crucial context on this hot-button topic. The hope: that perhaps, as Benedetta Pacifico, a senior associate in Sidley’s London office, notes, “we won’t ignore these calls for change in finance any longer.”