Harald Heinrichs · Pim Martens Gerd Michelsen · Arnim Wiek Editors

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M. Peeters and T. Schomerus

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119
Chapter 10
 Finance and Sustainability
Olaf Weber
Abstract
The connection between the fi nancial industry and sustainable develop-
ment is indirect. The industry channels fi nancial capital into different industries and 
therefore has an indirect effect on sustainable development through these industries. 
Depending on which client is fi nanced the impact can be positive or negative. 
Therefore, the fi nancial industry has developed strategies, products, and services to 
manage sustainability issues. Most of the products and services focus on risk man-
agement connected with risks that are material for fi nancial institutions instead of 
managing risks for sustainable development. However, sustainability issues are 
dealt with in internal operations, credit risk management, socially responsible 
investing, and impact fi nance. Though products and services connected with sus-
tainability are still marginal, their ratio is increasing and social banks that focus 
exclusively on sustainable products and services are growing signifi cantly. Key 
challenges in the fi eld of sustainable fi nance are to scale up the respective products 
and services, to focus on the creation of positive impacts on sustainable develop-
ment through fi nance, to involve executive management representatives in sustain-
ability issues, and to increase research about the connection between fi nance and 
sustainable development.
Keywords
Sustainable fi nance • Sustainable banking • Indirect impact • Social 
bank • Socially responsible investing • Sustainable credit risk management