GREEN BALANCE SUBJECTS
The global system must change, for that we need standards and protocols that give predictability to investments; clear rules where it is determined what produces the profits and where the risks are.
This situation must exist to generate a market and an ecosystem that knows what the frameworks and criteria are that give value to climate assets.
CLEAR THE CRITERIA, CLEAR THE GAINS
The standards are the places where we are going to move and the protocols are the ways of implementing and developing the standards in action.
If we divide standards we must start with:
Education:
To provide a social tool from companies, governments and organizations to citizens for insertion into new methodologies that are part of compliance with standards.
Qualified Work:
These trained people will give us an available workforce, to which companies that want to invest in the sectors. It gives them security of rapid implementation and development because work synchronization is instantaneous or very fast “= everyone wins”.
LET’S TALK ABOUT INVESTMENTS
Now when the investments arrive, having distributed the citizens’ knowledge, the costs are logical due to the displacement of the labor force itself.
These costs are necessary for the competitiveness of companies and their products.
NEUTRALITY OR EMISSIONS REDUCTION GOALS
To achieve this we must focus on production behaviors, from raw materials, machinery and its emissions, clean energy, responsible waste management.
“This cumulatively allows the reduction of emissions.”
COMPREHENSIVE EFFICIENCY
The key word of the future is “Comprehensive Efficiency” and comprehensive efficiency is the result of the generality of the impact of the Efficiency Protocol.
Now, when we apply Comprehensive Efficiency we reduce costs in each highlighted item, but we are also opening the market of opportunities by providing a low-emissions offer.
This allows supply to increase demand and contracts to be larger in volume and in terms of associated commitments.
INDUCTION TO CLIMATE INVESTMENTS
This allows the supplier’s investment to be executed in a mandatory increase in committed production, which results in greater profits and investments focused on increasing comprehensive efficiency that results in profitability and greater neutrality.
CIRCULAR ECONOMY
It stimulates the creation of labor to balance the costs of developments, this is predictability that those who grant credits gain and that is turned into the implementation of plans that increase the renewable, sustainable and integral efficiency base.
Benefits:
And this gives better credit ratings to companies and buyers, but it is also very important that investors who, because they are part of sustainable investments, qualify in the range of their portfolio diversification.
¹. Greater volume of international financial markets in immediate and future clearing assets linked to performance-anchored returns.
². Which allows emissions to be reduced due to the availability of investments with high returns due to assured demands.
Countries benefit from reducing their Scopes, which allows them to enter new markets for their products and to be able to issue bonds for compliance with sustainable goals.
SYNTHESIS:
The financial market is beginning to include sustainable assets in its portfolios, achieving an attractive mix for investors.
Starting with education, followed by investment in development on solid foundations of granted knowledge. Next comes the simultaneous qualification phase, which benefits all parties due to ESG aspects and universal Comprehensive Efficiency standards criteria.
Finally, the results are marketed as financial assets, producing a sense of circularity in the world of sustainability, an achievement obtained by applying the concepts of the Circular Economy, uniting traditional finance with sustainability.
CONCLUSION:
The benefits of Comprehensive Efficiency are part of the good practices of a Circular Economy that works, the result is the volume that grows in investments in the sector.
All this is a product of the guarantee of standard criteria to apply homogeneous protocols that allow predictability and security, but also the risks of selling futures sustained by the behavior of compliance with financial instruments.
This is just the beginning and finance is always finance, climate finance is already part of the ecosystem and in times of commercial crisis, it can be the hidden element that can allow the universal economy to meet objectives, provide stability and set new profit parameters with results immediate.
AUTHOR:
DIEGO BALVERDE
ECONOMIST
EUROPEAN CENTRAL BANK
