“Since the financial crisis that became evident with the collapse of Lehman Brothers in 2008,
a group of sustainability focused banks… ….have demonstrated through their focus on the real economy,
their strong capital positions, and their steady financial returns that banking models… based on the Principles of
Sustainable Banking provide viable and needed alternatives adding strength to a diverse financial ecosystem.”
GABV (2014)
The financial and economic crisis of 2007/2008 highlighted a need of biodiversity within the financial system that could increase stability and resiliency for the system as a whole (EESC, 2015). Sustainable Finance organizations and products seem to be the answer to this need and to be different from the traditional one.
Crisis increased financial customers’ sensibility and attention to suppliers’ behavior and ethicality. Subprime crisis shown that a behavior driven just by profit could be dangerous in terms of sustainability and could warp the role of finance, which is supposed to serve society.
For these raisons, the so-called sustainable finance organizations and products are currently economic and financial phenomena that are raising a lot of attention at an international level. Words like:
- Sustainable Finance
- Responsible Finance
- Alternative Finance
- Social Finance
- Ethical Finance
are more and more present in the actual economic and financial debate, but a few studies investigate what those institutions and products are about, which are their features, why they differ from traditional financial institutions and products. Furthermore, an institutional or common accepted definition of this kind of agents and products does not exist yet (San-Jose et al., 2011).
Economics theories based on Homo Economicus behavior and utility functions are currently facing a wide call for new perspectives coming from civil society and academic environment.
Global Alliance on Banking Values, which aims to represent the alternative banking movement at an international level, including members from:
- Italy
- The Netherlands
- Belgium
- France
- Canada
- USA
- Norway
- Sweden
- Finland
- Denmark
- UK
- Germany
- Greece
- Switzerland
- Dominican Republic
- Bolivia
- Colombia
- Honduras
- Ecuador
- Malasya
- Palestine
- Australia
- Bangladesh
- Canada
- Peru
- Philippines
- Uganda
- Russia
- Japan
- India
- Tajikistan
- Nigeria
- Hungary
- Nepal
- Serbia
- El Salvador
- Afghanistan
- Paraguai
- Mongolia
showed that in the years after the crisis, between 2007 and 2010, the assets growth of this kind of financial institutions reached 53.41%, compared to 8.37% of mainstream banking organizations (GABV, 2012).
Alternative financial institutions also showed to be more resilient to 2008 crisis effects on the economy (see table 1 and 2). Furthermore, alternative financial institutions from the GABV network show, since the crisis began, a higher level of return on assets than traditional banks.
Introducing the Hype on Sustainable Finance
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