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The development of a sustainable capital market is a significant issue that requires joined effort of the organizations that operate in the field. Such an effort may result in the enhanced quality of individuals’ lives by improving environmental, social, and financial issues. This paper discusses business sustainability and provides information about green financial markets, as well as outlines the benefits of sustainable capital markets. It concludes that sustainability is a vital feature that organizations should strive to implement into their operations.
Sustainability in Capital Markets
Business sustainability or corporate sustainability can be defined as a process that organizations use to manage their environmental, financial, and social risks. This issue is vital as the performance of an organization is directly related to the well-being of the community and employees.
The features of business sustainability may include respecting principles in business operations, leadership commitment, local actions, a well-developed reporting process, and community involvement. In other words, the primary determinant of corporate sustainability is the company’s ability to operate in alignment with universal principles to support the society. Moreover, organizations should show a commitment to providing high-quality services and local engagement (United Nations Global Compact 7).
It is vital to note that corporate sustainability ensures that the organization’s actions and decisions meet fundamental requirements in the fields of labor, human rights, anti-corruption, and environment. This way, companies may enhance their performance and create a culture of integrity, ensuring their success in the market. In addition, by developing a strategy for sustainability, they show their dedication to improving the lives of their employees, communities, and society in general.
Sustainable capital markets are those that foster sustainable development, which, as mentioned above, has an impact on the society, communities, and environment. It is vital to note that such markets are different from green financial ones, which engage capital markets in the development of commercial products and services that lead to environmentally positive results (Tregidgo). For example, they may involve the strategies for promoting environmentally friendly investments and eliminating those that may be harmful to the environment. The focus of such markets may be in the management of natural resources, clean energy, sustainable transport and tourism, pollution control, and services related to the ecosystem.
There are various benefits associated with having a sustainable capital market. For instance, sustainability creates the opportunity to implement innovations in companies’ operations (Phadke). Moreover, as a sustainable capital market is beneficial for the society, it is possible to say that it allows the organizations to meet investors’ needs and eliminate the risks associated with the lack of sustainability, such as increased tax expenses and low energy efficiency.
Another significant benefit is that such a model allows for integrating environmental issues in the decision-making process (Oteh). It contributes to the improvement of global health outcomes and the enhancement of physical capital. Finally, the establishment of a sustainable capital market is vital for the improvement in various spheres and issues, including vaccination, poverty, and the use of technology.
This report shows that business sustainability can affect various problems related to the environment, finance, and society in general. Sustainable capital markets may have a crucial impact on communities and are beneficial for them. Their advantages include the changes in decision-making processes that result in environmentally friendly choices, the elimination of poverty and other social problems, and the decrease in tax expenses.
Oteh, Arunma. “Closing Keynote: Leveraging Capital Markets for Sustainable Development.” The World Bank. Web.
Phadke, Himani. “Mobilizing Capital Markets to Impact Sustainability Challenges.” The Rockefeller Foundation. Web.
Tregidgo, Paul, et al. “Green Finance, Explained.” Development Asia. Web.
United Nations Global Compact. Guide to Corporate Sustainability. 2014. Web.