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OUR VISION FOR FINANCIAL PRODUCTS
& SERVICES BY 2050

All financial capital and financial products and services are mobilized to support sustainable development

01

THE FINANCIAL SYSTEM RECOGNIZES THE VALUE OF SOCIAL AND ENVIRONMENTAL OUTCOMES ALONGSIDE FINANCIAL PERFORMANCE

02

FINANCIAL CAPITAL ALLOCATION ENABLES SUSTAINABLE DEVELOPMENT

03

THE FINANCIAL SYSTEM HAS ACCESS TO COMPREHENSIVE AND COMPARABLE DATA ON CORPORATE SUSTAINABILITY PERFORMANCE

04

THE FINANCIAL SYSTEM WORKS FOR EVERYONE

KEY TRANSITIONS

MARKETS AND FINANCIAL INSTITUTIONS EMBRACE
A BROADER CONCEPT OF VALUE

  • Widespread recognition emerges across the financial system that in addition to financial capital, there are other categories of value that society and institutions within society, benefit from (including natural, social and relationship, human, intellectual, and manufactured capital).
  • Approaches to categorizing and recognizing wider concepts of true value are further developed and mainstreamed. Accounting and valuation practices evolve to fully support the integration of these multiple sources of capital.
  • Professional education for financial analysts, treasury, risk management, insurance, and investment management increasingly integrate a multi-capital approach.

CULTURE AND BEHAVIOR SHIFT

  • Governments, regulators, capital market actors, and companies work in concert to enable a cultural and behavioral shift that helps to reduce instances of short-termism, excessive speculation and leverage, and foster long-term resilience and value creation.
  • Policymakers strengthen regulatory guidance around the need for ESG considerations to be integrated into investor practice as a key component of fiduciary duty. Discussions around fiduciary duty also move beyond investors to include other actors along the investment chain.
  • Incentive structures are reviewed to position sustainability performance outcomes as key components of short- and long-term remuneration across the financial system.
  • ESG’s importance in investment decision-making is incorporated into professional codes of ethics and qualifications.
  • Actors across the financial system signal the importance of sustainability issues through their interactions with peers and wider networks along the investment chain.

CAPITAL IS MOBILIZED IN SUPPORT OF SUSTAINABLE DEVELOPMENT

  • The entire financial system reinforces the mobilization of assets to finance sustainable business practices. Funds are allocated towards sustainable products, and ESG considerations are integrated across all aspects of investment decision-making. The cost of capital decreases for sustainable business activities, while increasing for those that are unsustainable.
  • Asset owners put increasing pressure on asset managers to integrate ESG considerations into all investments. Asset managers pressure issuers to manage and report on ESG risks and opportunities.
  • Investment consultants and banks enhance efforts to provide advice and sell-side research that helps to ensure asset owners and managers are aware of the long-term sustainability risks and opportunities within their clients’ portfolios.
  • Banks align their customer financing activities with the Paris Agreement and sustainable development.

ROBUST MARKET INFRASTRUCTURE FOR FINANCIAL PRODUCTS IN SUPPORT OF SUSTAINABLE DEVELOPMENT EMERGES

  • Dialogue between companies and investors supports the development of critical system architecture that supports institutional and technical efforts to mobilize capital in support of sustainable development.
  • A clear, globally recognized definition of sustainable investing is developed, including standardized terms and products. This ensures the impact of sustainable investment products and helps to prevent mis-selling.
  • Financial instruments, services, and products that contribute to inclusive, impactful, sustainable outcomes emerge and achieve scale.
  • Convergence of standards enables the development of integrated indices and benchmarks which provide users with comprehensive information on risk, returns, impacts and outcomes.

COMPANIES ENHANCE THE STRATEGIC INTEGRATION AND REPORTING OF ESG TO FACILITATE SUSTAINABLE CAPITAL ALLOCATION BY FINANCIAL INSTITUTIONS

  • Businesses place sustainability at the core of corporate decision-making, with ESG signals becoming key considerations for CFO, treasury, corporate secretary and investor relations functions.
  • Material, decision-useful and forward-looking ESG information is communicated by more and more companies, allowing investors to leverage it for assessments and responsive valuation.
  • Collaborative platforms bring companies and investors together to improve the specification, consistency, and exchange of ESG information and communication.
  • Regulators work to increase the consistency, timeliness, and adoption rates of the disclosure of ESG information. Stock exchanges globally start to mandate ESG disclosure for listing requirements.

PEOPLE’S VALUES ARE RESTORED TO THE HEART
OF THE FINANCIAL SYSTEM

  • Enhanced financial literacy globally makes individuals more aware of their role in the financial system and empowers them to take action to align the system better with their sustainability and ethical preferences.
  • Individuals start to increasingly demand that their investments are aligned with sustainable development outcomes and build sustainability factors into the mandates they give to those who manage their money.
  • Retail banks provide customers with appropriate advice and incentives on how to support sustainable development.
  • Companies ensure that their corporate retirement plans integrate ESG considerations and are aligned with sustainable development, in line with mounting employee demand.

FINANCIAL SERVICES SUPPORT INCLUSION
AND EQUITABLE ACCESS AT SCALE

  • Perspectives in the financial sector shift to support the development of products and services that enable universal financial participation.
  • Organizations focus on supporting personal and social resilience and security in all corners of society. Providers work to facilitate universal access to savings, insurance and credit.
  • Access to sustainable finance for low-income communities as well as micro, small, and medium-sized enterprises improves exponentially.
  • Digital and mobile technologies are leveraged to overcome barriers to access to financial services including geography, cost, and disenfranchisement.
  • Multi-stakeholder collaborations mobilize efforts to enhance financial literacy globally.

FINANCIAL PRODUCTS & SERVICES

ACTION AREAS FOR BUSINESS

2021-2030

01

Advocate for an enabling sustainable finance policy environment that supports transparency, evolution of concepts of fiduciary duty and strategic approaches to valuing externalities.

02

Companies incorporate ESG-related risks and opportunities and natural, social and human capital impacts and dependencies into accounting processes and valuation assumptions.

03

Asset owners build clear and consistent ESG requirements and performance metrics into the instructions given to investment consultants and asset managers.

04

Retail and investment banks embed sustainability throughout their business models, developing a range of sustainable finance instruments, ensuring their own loans and investments are sustainable, and developing robust analysis of ESG factors on the sell side.

05

Corporates and investors come together with standard-setters and regulators to develop clear guidance on the specification, consistency and comparability of decision-useful sustainability-related information and communication.

06

Identify and address incentives that reward and give rise to short-term financial performance outcomes at the expense of sustainable development.

07

Credit ratings agencies enhance their analysis of the ESG risk exposure of sectors and companies for a range of issues including climate change, human rights, nature loss, and water scarcity.

08

Support professional development standards and codes of ethics that support sustainable finance capabilities and behaviors.

09

Develop investment allocation transparency for beneficiaries, pension holders and other retail investors, so that they can see where and how their money is invested, as well as associated sustainability-related impacts.

10

Facilitate access at scale to financial products and services, using accessibility as a fundamental design principle to support equity and financial inclusion, while also exploring new partnerships and initiatives to enhance financial literacy globally.

Most Relevant SDGS

OTHER TRANSFORMATION PATHWAYS

Explore the other critical action areas that will drive a shift towards a sustainable future

RELEVANT DOWNLOADS

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