Using sustainable finance theory to save the environment

Using sustainable finance theory to save the environment

People usually perceive the finance sector to be the environment’s arch enemy, with its supposed fixation on short-term profits whatever the cost. However, the theories the Goldman Sachses of this world use to make money can also be used to save the environment, if we are open-minded enough to get past the stigma of big finance. Dr. Omar Al-Ubaydli uses a research carried out on coral reef conservation to show features in common with financial assets: their returns are a function of economy-level factors and sector-specific factors. In the case of a coral reef, the list includes rising sea temperatures (economy-level) and local salinity conditions (sector-level); while for stocks the list would include interest rates (economy-level) and industry regulations (sector-level).

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Dr. Omar Al-Ubaydli, Director, Studies and Research Directorate

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