This week on WealthTech Unwrapped, Ned and Dani cover the rise of sustainable finance and the challenges of its adoption. As a veteran in the finance industry, Helene believes that ‘green is the new black’. The pandemic has accelerated the need to rethink the finance industry with an impact-focused perspective. However, with such a rapid growth in interest, greenwashing threatens this dialogue from creating meaningful actions.
Helene summarizes the obstacles of sustainable investing as the data and literacy gap. She suggests that the lack of reliable and transferrable data, and overwhelming numbers of terminology prevent a productive adoption. More often than not, investors raise doubts about financial returns when venturing into ESG funds. Helene considers this an incongruous concern as every investment involves a certain amount of trade-offs, and ESG funds shouldn’t be evaluated differently. In order to effectively tackle the gaps in sustainable investments, advisors should build their ESG knowledge beyond theoretical frameworks with use cases to help clients understand the narrative.
A notable challenge in promoting sustainable finance is the popularity of self-proclaimed ESG experts who might spread misinformation. This could endanger the work that seasoned industry professionals have been trying to stabilize. As sustainability is a subject that young investors are increasingly conscious of, Helene suggests that every contribution goes a long way, no matter how small. There are organizations, like GoImpact, that are actively trying to chip away at the learning gaps to make adoption successful at a higher level. Speaking about the future of sustainable finance, Helene hopes that terms related to sustainable investments would become redundant, such that it’s considered the norm rather than the exception.
