Timeline: the future of sustainable finance

Sustainable finance is trending and transforming the banking and payments space – so we track its origins and future

1991: UNEP Finance Initiative launches

In 1991, the UNEP Finance Initiative was launched when a group of banks partnered with UNEP (United Nations Environment Programme). The aim of the partnership was to promote better sustainability practices throughout the world and enhance the role of the global finance industry in that implementation.

1992: An agreement is reached

Just 12 months later, the core aims and objectives of the UNEP Finance Initiative were reached. The group of commercial banks involved began to engage in an evangelisation programme that began to engage more banks and financial services institutions, VCs, agencies, and more in a conversation regarding financial sustainability. 

1993-2005: Building momentum

As the dialogue and engagement increased, the UNEP Finance Initiative established three regulatory frameworks for financial institutions to work towards. They are: The Principles for Responsible Investment (PRI); The Principles for Responsible Banking (PRB); and the Principles for Sustainable Insurance (PSI).

2019: Banks join the sustainable finance movement

By 2019, according to data from NatWast – a founding member of the UNEP Finance Initiative – a third of the world’s banks (197) had joined the Responsible Banking Initiative. Signatory banks have to commit to taking three key objectives to improve the impact of their services in a sustainable capacity. They must: 

  • Analyse their current impact on the planet
  • Set targets and implement them
  • Publicly report on progress

2021: Sustainable lending changes

By 2021, the sustainable banking sector had developed strong regulatory practices surrounding lending. In May of that year, the rules around SLLPs (Sustainability-Linked Loan Principles) were further tightened and clarified to reflect key performance indicators that would fully support the sustainable banking objectives and borrower performance.

2023 and beyond

The future of sustainable finance involves going mainstream, with banks of all sectors launching new products that support the sustainability agenda. Customers at a grassroots level will be given the opportunity to select, or opt out of, products that offer personalised suggestions regarding purchases made and their environmental impact. It is hoped that these features will encourage all consumers to select more sustainable market alternatives. These purchases will be linked to data collected on individuals – though arguments have been made that they infringe on privacy.


Featured Articles

Defaqto: Helping clients ‘make smarter financial decisions’

We look at the life and career of John Milliken, CEO of Defaqto – a company known for issuing star ratings, but with far more going on under the hood…

WorldFirst: Why now is time for SMEs to seek trade in Asia

In this exclusive interview, we speak to VP of Ant Group and WorldFirst CEO Clara Shi, on why now is the time for UK SMEs to trade in new markets

Mastercard webinar: Shaping the Future of Fintech

Mastercard experts, alongside Zolve CEO and Founder Raghu G, discuss the six major fintech trends today in the company’s latest webinar – available now

Embedded finance: Innovating for good

Financial Services (FinServ)

Live today: FinTech LIVE London

Financial Services (FinServ)

Crypto, blockchain and Web3 speakers at FinTech LIVE London