The Banking Executive Magazine - September 2023 Issue

The Transition to Green Economy A feature distinguishing a green economy from prior economic regimes is the direct valuation of nat- ural capital and ecological services as having economic value and a full cost accounting regime in which costs externalized onto society via ecosystems are reliably traced. The United Nations UN Environ- ment-led Green Economy Initiative, launched in late 2008, emphasises the importance of green economy. The Green Economy Initiative is a coalition of organisations with a col- lective objective to provide the analysis and policy support for in- vesting in green sectors and facilitat- ing green economic growth. There was a universal agreement that the current economic system is no longer appropriate due to its ex- tremely detrimental social and envi- ronmental repercussions. Governments, businesses, and soci- ety are becoming aware of the im- portance of green economy. The green business and economy is de- scribed as an alternative vision for growth and sustainable develop- ment. GREEN INVESTMENT A green economy is a low carbon, resource efficient and socially inclu- sive. In a green economy, income and employment are driven by pub- lic and private investment into activ- ities that reduce carbon emissions and prevent the loss of biodiversity. Green investment funds consist of in- vestment activities that focus on companies or projects committed to the conservation of natural re- sources. Green economy sectors in- clude clean energy, green buildings, sustainable transport, water manage- ment, waste management and land management. A green economy promotes social and environmental sustainability through the encouragement of public and private investment in infrastruc- ture. The green economy is signifi- cant because it promotes low digital carbon footprint, sustainable eco- nomic growth and guarantees that natural resources will continue to support our continued well-being by providing resources and environ- mental services. BLUE ECONOMY VERSUS GREEN ECONOMY Blue economy principles question how we produce and consume things, with a focus on using all re- sources efficiently and using waste to make new products where possible. The principles of the blue economy are based on natural ecosystems, en- couraging people to use all waste, consuming locally and making and using only what is essential. CIRCULAR ECONOMY VERSUS GREEN ECONOMY The circular economy means moving away from our current and enor- mously wasteful economic model of ‘take, make, throw away’, in which resources are extracted, turned into products, used, and discarded. A cir- cular green economy improves re- source efficiency and reduces environmental impact on natural capital by designing products in a more sustainable way. The fundamental idea behind the green economy is to promote eco- nomic growth while taking into ac- count the sustainability of the ISSUE 177 SEPTEMBER 2023 the BANKING EXECUTIVE 23