Sustainable Finance as a Factor in the Transformation of Financial Relations

Abstract

The purpose of the article is to consider the transformation of financial relations, which occurs as a result of the active development of sustainable finance. The business’ awareness of the importance of sustainable ESG financial strategies (environment, social sphere, corporate governance) is becoming increasingly significant for assessing the efficiency of the global economy, markets, industries and business models. The development of sustainable finance transforms financial relations: on the one hand, enterprises are obliged to adhere to certain social and environmental standards, but on the other hand, enterprises themselves revise their strategy and improve it to become more sustainable and competitive. Sustainable finance provides a more transparent market, which forces enterprises to take into account the social and environmental aspects of their activities, as this affects the availability of «green» financing, including through government subsidies and tax rebates. To increase the scale of the sustainable finance market, governments and international organizations develop regulatory policies and provide financial support to businesses through a variety of programs and initiatives. The expediency of developing strategies and programs aimed at attracting international and national sustainable investments to support post-war economic recovery in Ukraine at different levels (international, national, regional, local) has been determined. Institutionalizing the sustainable finance market and increasing demand for personalized sustainable product portfolios will increase the profitability of sustainable projects, which will be beneficial for international business in the long term in view of sustainability and competitiveness. The interest of international business to various fintech projects with ESG capabilities will grow. At the same time, it is important not to overregulate the industry, as many international companies wishing to switch to sustainable financing simply will not be able to achieve global or European standards.

Keywords

• sustainable finance
• esg
• green bonds
• social bonds