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The world is currently facing an unprecedented challenge with the intensifying impact of climate change. As temperatures soar during this summer, many countries are suffering from the extreme heat more than ever before.
Climate change is no longer a distant concept; it is an existential crisis that people are experiencing firsthand. Not only developing countries but also developed countries bear the brunt of this heat, experiencing more frequent and severe weather events.
Green Finance Market: A Ray of Hope
In the midst of this climate crisis, the world has realised that urgent action is needed. Green finance has emerged as a powerful tool to mobilise capital and channel investments into sustainable projects and initiatives. This financial sector encourages companies to adopt environmentally friendly practices, reduce carbon emissions and promote sustainable development.
Governments and international organisations increasingly recognise the central role that financial markets can play in mitigating climate change. As a result, they are proactively introducing stronger regulations to promote transparency and accountability in the green financial market.
A significant milestone in this regard is the recent publication of the International Sustainability Standards Board (ISSB) standards in June 2023, which many countries have adopted, requiring companies to better disclose their climate-related data.
For instance, Singapore is leading the charge in this endeavour.
Listed companies within the country are mandated to adhere to the ISSB-aligned climate-related financial disclosure requirements, which will be applicable starting from FY2025.
Subsequently, large non-listed companies with annual revenue of at least $1 billion will follow suit and comply with these regulations from FY2027.
Green finance will play a critical role in climate change risk management by serving as a strategic tool for targeting investments to protect against the impacts of natural disasters and disruptions.
As climate change intensifies, the world faces increasing frequency and severity of extreme weather events, including hurricanes, floods, wildfires, and droughts. These events not only pose significant threats to human life and infrastructure but also result in significant economic losses to companies and investors.
Climate-Driven Disasters: Financial Losses to Investors and Companies
Source: REANGLE
By incorporating climate risk analysis and scenario planning into investment decisions, Green Finance acts as a critical safeguard for businesses and societies by reducing vulnerabilities and improving adaptive capacity to the ever-growing challenges of climate change. Green Finance thus serves as a strategic apparatus for a more sustainable, resilient and secure future.
Climate Risk Analysis and Scenario Planning
Source: REANGLE
Risk of Greenwashing
Source: REANGLE
Despite the increasing importance of green financing and regulation, the phenomenon of greenwashing remains a concern. Greenwashing refers to the deceptive practices of some companies that portray themselves as environmentally conscious when in fact they are not actively contributing to sustainable practices. This undermines the very purpose of green finance and hinders progress toward a greener future.
Read more about greenwashing in our previous article, "Greening The Lion City: Greenwashing Risks and Their Impact on Singapore Companies."
REANGLE’s Green Finance Consulting
In response to the challenges posed by greenwashing, innovative companies like REANGLE have stepped up to the plate. REANGLE is a pioneer in providing analytical solutions that help companies address greenwashing risks and improve their climate-related accountability.
REANGLE’s Solutions
Source: REANGLE
REANGLE provides comprehensive green finance consulting services for companies seeking funding for their sustainability business and to transform their business towards sustainability through climate-related financial data analysis and green compliance.
REANGLE’s Green Adjusted Financial Analysis
Source: REANGLE
REANGLE develops green-adjusted financial models to help companies with comprehensive financial analysis to truly evaluate their sustainability efforts. These models consider the financial impacts of sustainable operation, green investment and climate-related R&D. This process helps companies identify potential risks and opportunities in sustainable practices.
Three Faceted Pressures
Even in the absence of government regulations, corporations face mounting pressures from investors and consumers that they cannot afford to ignore.
Socially conscious consumers are increasingly demanding products and services from corporations that align with their values, including strong sustainability practices. Failing to meet these expectations can result in reputational damage, reduced customer loyalty, and decreased market share. Embracing sustainability and responsible practices is not only a moral imperative but also a strategic necessity for corporations to thrive in today's consumer-driven market.
Source: REANGLE
By utilising REANGLE's services, companies can demonstrate their genuine commitment to sustainability. This reduces the likelihood of greenwashing allegations and builds trust among stakeholders, investors and customers.
REANGLE’s Green Finance Consulting
REANGLE provides comprehensive Green Finance consulting services for corporations seeking finance for their sustainability business and remodelling their business towards sustainability by analysing sustainable-related financial data and complying with green regulations. REANGLE provides institutional investors with due diligence to manage climate and geopolitical investment risks through quantitative and qualitative analysis.
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