Essential Concepts of Sustainable Finance

Elisa Aracil is a professor of business and economics and a researcher at Instituto de Investigación Tecnológica in Universidad Pontificia Comillas Madrid (Spain). She has worked in investment banking for more than ten years. Her research focuses on sustainable banks, innovation and digital transformation, corporate social responsibility, financial inclusion, and the role of finance in mitigating societal grand challenges. She has published her work in scientific journals such as the Journal of Business Research, the Journal of Cleaner Production, Finance Research Letters, Business Strategy and the Environment, Corporate Social Responsibility and Environmental Management, Business Ethics: A European Review, Business Strategy and Development, Sustainability, and the International Journal of Emerging Markets. She participates in various research projects at the national and international levels, funded by the European Commission, and is the Director of the CaixaBank Chair of Sustainable Economy.Ibrahim Sancak is both an academic and a finance professional with more than 20 years of financial industry-related experience. He served as the founding director of the Market Oversight and Enforcement Division at the Capital Markets Board of Turkey. Dr. Sancak joined the ZWIRN-Research Center of the Ostfalia University of Applied Sciences (Germany) as a professor of finance in February 2019. Since then, he has been actively conducting scientific research in sustainable finance and digital finance. In 2020, he took part in delivering a sustainability management guide for Bankenfachverband, a key financial industry association in Germany. He teaches the "Economic Thinking and Sustainable Finance" course of the Sustainability & Risk Management (MSc) program at the university. He also teaches at various European universities, including the University of Roma Tre in Italy. He holds a bachelor’s degree in business administration and a master of business administration from Ankara University (Turkey), a master of science in finance from the George Washington University (the US), and a PhD in banking from Marmara University (Turkey). Professor Sancak also holds three certificates from the US Securities and Exchange Commission (SEC) on market regulation and supervision.

• Sustainable Finance: A Multidimensional and Multi-actor Framework Visual Codes of Sustainable Finance Concepts2030 Agenda for Sustainable Development Crescentino, D. & Crescentino, L.Active Engagement Sancak, I. Active Ownership Sancak, I. Active Voting Sancak, I. Anthropogenic Climate Change Sancak, I. Anthropogenic Emission Sancak, I. Baseline and Credit Mechanism Gerres, T.Best-in-Class Screening Sancak, I.Best-in-Universe Screening Sancak, I.Biocapacity Sancak, I.Biodiversity Sancak, I.Biodiversity Finance Sancak, I.Biodiversity Intactness Index (BII) Sancak, I.Biodiversity Loss Sancak, I.Biosphere Integrity Sancak, I.Blended Finance Sancak, I.Blue Bonds Ocal, T.Blue Economy Barrachina, M.Blue Finance Barrachina, MBrown Economy Sancak, I. Brown Taxonomy Sancak, I. Brundtland Report Crescentino, D. & Crescentino, L.Business Sustainability Gómez de Liaño, C.Business-as-Usual Aracil, E.Cap and Trade System Gerres, TCarbon Allowance Gerres, T.Carbon Bubble Sancak, I. Carbon Credit Gerres, T.Carbon Dioxide (CO2) Sancak, I.Carbon (Dioxide) Capture Gerres, T.Carbon (Dioxide) Capture & Storage (CCS) Gerres, T.Carbon (Dioxide) Capture & Utilization (CCU) Gerres, T.Carbon Dioxide Equivalent (CO2e) Sancak, I.Carbon Emission Sancak, I.Carbon Emission Permit Gerres, T.Carbon Finance Taskin, D.Carbon Footprint Sancak, I.Carbon Leakage Gerres, T. Carbon Markets Gerres, T. Carbon Neutrality Sancak, I.Carbon Offsetting Sancak, I.Carbon Price Gerres, T.Carbon Removal / Carbon Dioxide Removal (CDR) Sancak, I. Carbon Sequestration Sancak, I. Carbon Sink Sancak, I. Carbon Taxation Sancak, I. Chief Sustainability Officer Sancak, I. Circular Economy Barrachina, M.Climate Sancak, I.Climate Change Sancak, I.Climate Change Adaptation Sancak, I.Climate Change Mitigation Sancak, I.Climate Crisis Sancak, I.Climate Disclosure Standards Board (CDSB) Sancak, I.Climate Finance Taskin, D.Climate Neutrality Sancak, I.Climate Stress Test / Testing Sancak, I.Climate-related Risk (CrR) Ocal, T.Common Good Value Sancak, I. Community Investing Sancak, I. Conference of the Parties (COP) Sancak, I. Corporate Citizenship Gómez de Liaño, C.Corporate Engagement Sancak, I. Corporate Governance Brogi, M.Corporate Social Responsibility Gómez de Liaño, C.Corporate Sustainability Gómez de Liaño, CDecarbonization Sancak, I.Development Finance Moreno de Tejada, O.Diversity, Equity, and Inclusion Gómez de Liaño, C.Double Materiality Sancak, I. Doughnut Economics Wikström, T.Dynamic Materiality Sancak, I. Earth Overshoot Day Sancak, I. Earth System Sancak, I. Ecological Footprint Sancak, I. Ecosystem Services Sancak, I. Emission Allowance Gerres, T.Emission Trading Gerres, T.Emissions Trading System Gerres, T.Enlightened Shareholder Value (ESV) Sancak, I.Environmental Capital Sancak, I.Environmental Economics Vargas, CEnvironmental Externalities Vargas, C.Environmental Factors (E of ESG) Sancak, I. Environmental Finance Sancak, I. Environmental Footprint SoGReS-MF Research GroupEnvironmental Kuznets Curve Sancak, I. Environmental Risk Ocal, T.Environmental Taxonomy Sancak, I. Environmental, Social, and Governance Factors / ESG Factors / ESG Criteria Sancak, I.Equator Principles Sancak, I.ESG Analysis SoGReS-MF Research GroupESG Engagement Sancak, I.ESG Fund Jurado, A.ESG Incorporation Sancak, I. ESG Integration Sancak, I. ESG Investing/Investment Sancak, I. ESG Rating Lagasio, V.ESG Reporting Sancak, I.ESG Risks Ocal, T.ESG Voting Sancak, I. Ethical Investment / Ethical Investing Sancak, I. EU Taxonomy for Sustainability Lagasio, V.Exclusionary Investing Benedetti, H.Exclusionary Screening Sancak, I. Externalities Sancak, I. Finance-as-Usual Sancak, I.Financial Inclusion Aracil, EFinancial Materiality Sancak, IFossil Fuel Sancak, IGlobal Reporting Initiative Kanashiro, P.Global Warming Sancak, I. Global Warming Potential (GWP) Sancak, I. Governance Factors (G of ESG) Lagasio, V.Green Asset Ratio (GAR) Ocal, TGreen Assets Ocal, TGreen Bond Principles Ocal, TGreen Bonds Ocal, TGreen Company Sancak, I. Green Economy Sancak, I. Green Equities Martin Bujack, K. Green Finance Ocal, T.Green Fintech Taxonomy (Green Fintech Classification) Ocal, T.Green Growth Sancak, I. Green Investment Martin Bujack, K. Green Lease, Green Leasing Ocal, T.Green Loan Ocal, T.Green Loan Principles Ocal, T.Green Mortgage Ocal, T.Green Premium Sancak, I.Green Project Sancak, I.Green Taxonomy Sancak, I.Green Water Sancak, I.Greenhouse Effect Sancak, I.Greenhouse Gas Emission (GHG Emission) Sancak, I.Greenhouse Gas Neutrality Sancak, I.Greenhouse Gas Protocol (GHG Protocol) Sancak, I.Greenhouse Gases (GHGs) Sancak, I.Greenium Sancak, I.Greenwashing, Greenwash Sancak, I.Impact Finance Pareja, B.Impact Investing Pareja, B.Impact Lending Pareja, B.Impact Loan Pareja, B.Impact Materiality Sancak, I. Impact Measurement and Management Ballesteros, C.Inclusionary Investing Benedetti, H.Inside-out Perspective Sancak, I. Integrated Report Sancak, I. Integrated Reporting Sancak, I. Integrated Thinking Sancak, I. Integrated Value Sancak, I. Integrated Value Creation (IVC) Sancak, I. Intergovernmental Panel on Climate Change Crescentino, L. & Crescentino, DInternalization Sancak, I.International Integrated Reporting Council (IIRC) Sancak, I.International Sustainability Standards Board (ISSB) Sancak, I.Katowice Climate Package Sancak, I.Keeling Curve Sancak, I.Kyoto Protocol Sancak, I.Land Degradation Ocal, T. Land Degradation Neutrality Ocal, T. Land-system Change Ocal, T. Land-use Change Ocal, T. Life Cycle Assessment SoGReS-MF Research Group Linear Consumption Sancak, I. Linear Economy Sancak, I. Linear Production Sancak, I. Long-term Value Creation (LTVC) Sancak, I. Materiality Esteban-Sánchez, P. & Pardo, E.Microcredit Sancak, I. Microfinance Sancak, I. Microinsurance Sancak, I.Microloan Sancak, I.Millennium Development Goals Crescentino, D. Montreal Protocol Sancak, I. Nationally Determined Contributions Pauw, P.Natural Capital Sancak, I.Natural Resource Sancak, I.Negative Emission Sancak, I.Negative Externalities Sancak, I.Negative Screening Sancak, I.Net Zero Economy Sancak, I.Net Zero Emission Sancak, I.Non-Financial Information Sancak, I.Non-Financial Reporting Sancak, I.Norms-based Screening Sancak, I.OECD Guidelines for Multinational Enterprises Sancak, I.Outside-in Perspective Sancak, I.Paris Agreement Sancak, I.Parts per Million (ppm) Sancak, I. Physical Risk Sancak, I. Pieconomics Sancak, I. Pigouvian Tax Sancak, I. Planetary Boundaries Sancak, I. Planetary Boundaries Framework Sancak, I. Porter Hypothesis Sancak, I. Positive Externalities Sancak, I. Positive Screening Sancak, I. Principles for Responsible Banking Ocal, T. Principles for Responsible Investment (PRI) Benedetti, H.Principles for Sustainable Insurance (PSI)Sancak, I. Race to Zero Sancak, I. Renewable Energy Sancak, I. Responsible Consumption Fernandez-Olit, B.Responsible Investment Fernandez-Olit, B.SASB Standards Kanashiro, P. Scope 1 GHG Emissions Sancak, I. Scope 2 GHG Emissions Sancak, I. Scope 3 GHG Emissions Sancak, I. Shareholder Action Sancak, I. Shareholder Activism Sancak, I. Shareholder Primacy Sancak, I. Shareholder Value Fernandez-Olit, B. Short Termism Fernandez-Olit, BSin Company Fernandez-Olit, B.Sin Stock Fernandez-Olit, B.Social Bank Cotelo-Ouréns, Y.Social Bonds Cotelo-Ouréns, Y.Social Externalities Cotelo-Ouréns, Y.Social Factors (S of ESG) Cotelo-Ouréns, Y.Social Finance Cotelo-Ouréns, Y.Social Taxonomy Paraskevas, P.Socially Responsible Investment (SRI) Paraskevas, P.Stakeholder Capitalism Sancak, I.Stewardship Sancak, I.Stranded Asset Sancak, I.Sustainability SoGReS-MF Research GroupSustainability Accounting Standards Board (SASB) Sancak, I. Sustainability Disclosure Pardo, E. & Esteban-Sánchez, P.Sustainability Index Aracil, E.Sustainability Linked Loans Ocal, T. Sustainability Linked Loan Principles Ocal, T. Sustainability Rankings Madera del Pozo, A.Sustainability Rating Providers Madera del Pozo, A.Sustainability Ratings Zeidan, R.Sustainability Reporting Sancak, I.Sustainability Risks SoGReS-MF Research GroupSustainability Science Sancak, I. Sustainability Score Madera del Pozo, A.Sustainability Taxonomy Sancak, I. Sustainability Transformation Sancak, I. Sustainability Transition Sancak, I. Sustainability-themed Investing Sancak, I. Sustainable Business Model Aracil, E.Sustainable Development Aracil, E.Sustainable Development Goals (SDGs) Aracil, E.Sustainable Digital Finance Sancak, I. Sustainable Finance Aracil, E. & Sancak, I. Sustainable Finance Forms Sancak, I.Sustainable Finance Literacy Sancak, I.Sustainable Finance Stages Sancak, I.Sustainable Finance Taxonomy Sancak, I.Sustainable Finance Technology (SuFTech) Sancak, I.Sustainable Insurance Sancak, I.Sustainable Investing, Sustainable Investment, Sustainability Investment (SI) SoGReS-MF Research GroupSustainable Investment Fund Jurado, A.Sustainable Investment Strategies Sancak, I. Sustainable Lending Ocal, T.Taxonomy Sancak, I. Thematic Investing Sancak, I. Tradable Emission Permit Gerres, T. Tradable Emission Right Gerres, T. Transition Finance Sancak, I.Transition Management Vargas, C.Transition Risk Vargas, C.Triple Bottom Line Aracil, E.Twin Transformation Sancak, I.United Nations Framework Convention on Climate Change (UNFCCC) Pauw, P. United Nations Global Compact Sancak, I. United Nations Guiding Principles for Business and Human Rights Pardo, E. & Esteban-Sánchez, P.Value Reporting Foundation Sancak, I. Values-based Banking Cotelo-Ouréns, Y.

“Finance is crucial to sustainable development since transitioning toward a clean and just economy requires massive funding. Besides, increasing investors’ appetite for ESG assets underlies the fast-growing sustainable investment market. These trends underlie a proliferation of sustainability standards, ratings, scores, regulations, frameworks, and associations. This book provides a useful guide for non-ESG experts so that they understand the role of finance in achieving sustainable development.”Professor Doctor Timo Busch, Chair of Management and Sustainability, University of Hamburg “A valuable dimension of this book is its capacity to connect financial terms with non-financial ones. This book clarifies the sustainable finance notions to individual and institutional investors, financiers, managers, and the general public so that they can make informed decisions: business organizations need to embrace increasing sustainability standards, which requires a fundamental knowledge of sustainability; investors will benefit from clarifying adjacent concepts in sustainable investing, and students can improve their learning curve on the ever-growing sustainable finance arena. The value of this book is unquestionable as it facilitates understanding the building blocks of sustainable finance in the business world for years to come. Transformation starts with learning; learning begins with understanding fundamental concepts and this book is an excellent kickstart.”Carlos Serrano, Climate Finance Advisory Services Lead, LAC Financial Sector, International Finance Corporation (IFC, World Bank Group)Essential Concepts of Sustainability Finance provides an excellent guide to terms underlying climate change and its implications for finance. This is a very comprehensive and timely resource particularly in view of the recent proliferation of concepts and initiatives surrounding climate science and finance. Concepts ranging from biodiversity and sustainability science to green mortgage and transition finance are covered and nicely categorized using visual icons. A must-read for anyone with an interest in climate and sustainability issues. Professor Gulcin Ozkan, King's Business School, King's College London, Bush House, 30 Aldwych London WC2B 4BG, UK