What Is Green Transition? Here Is All You Need To Know  

  • 26th Nov'21
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We all must move from a greed economy to a green economy - Susilo Bambang Yudhoyono.

Investment of funds at a proper place is considered good to save and increase the money. Although, the profit and loss depend on the market fluctuation. So before investing funds at platforms, it becomes mandatory to know about the investment policy.  And you can also read about the tips for beginners to invest in the stock market. Do you know the investment can directly or indirectly affect nature? Want to know how? Keep on reading then!

Taking into concern, the environment-related problems banks are driving towards the green transition through what they finance. But before knowing about green transition, one should know a bit about green investment.

 

What is Green Investment?

By the name, it is somewhat clear that it is related to the environment. Green investment is a type of socially responsible investment. The term green investment refers to the investment activities that are focused on the companies or in the projects that are committed to the preservation of natural resources. 

The initiatives regarding the preservation of natural resources include the production of energy sources, the execution of projects for clean air and water, and many more activities. The funds for the green investment are raised through mutual funds, bonds, and electronically traded funds.

 

The Green Deal

The green deal is a new growth strategy from the European Union (EU), for sustainable economic growth. The green deal is making Europe the first neutral continent globally and supporting environmentally friendly products and reducing carbon-dioxide emissions. The green deal aims to turn the climate challenges into opportunities to make the transition inclusive for all. It reforms the green transitions and contributes to achieving the goal.

 

 

Green Deal

Statement on the Green Deal

Frans Timmermans, Executive Vice- President of the European Commission stated “We must show solidarity with the most affected regions in Europe, such as coal mining regions and others, to make sure the Green Deal gets everyone’s full support and has a chance to become reality.” 

 

Green Economy Transition 

The Green Economy Transition (GET), in the bank, is the new approach. It is for helping the economy of the European Bank for Reconstruction and Development Works ( EBRD). This new approach is for saving the environment by low carbon and green economy. 

Through GET, the European Bank will increase the green financing to more than fifty percent of its annual business volume by 2025. The initiative also aims to reach net annual Greenhouse Gas (GHG) emissions to the reduction of at least 25 million tonnes over the five-year period. With the economic transition, you should also know about over 2000 years of world economies in one graph.

The new GET is built on the track record of financing green investment. Till now, EBRD has signed around 36 million euros in green investment with financing over two thousand green projects.

 

The Examples of Green Transition Work

  • To develop a natural-based solution to reduce heat, waves floods, and poor quality of air in urban areas.

  • To develop a scheme of renewable and energy-efficient investment.

  • To develop national energy climate plans and models.

  • The enhancement of energy efficiency investment in buildings.

  • To support forest management, land use, and smart cities.

  • To work on water transport and railways. 

  • To assess the energy-efficient heating and cooling system.

  • To support the decarbonization of electricity systems by including renewable energy.

 

Green Economy

 

The Development of Green Product 

The Banks are prioritizing the new green products by lending finance to the green industries. The banks have made sure to provide credit for the environment supporters. One of the European banks has developed social dividends worth around  8.8 million dollars to support water system cleansing and local green transition. Similar to this, In the year 2019, one more bank has credited the green program in the transport and agriculture sectors, worth 2.6 million dollars. 

Taking under consideration of climate change, banks are also pricing the environmental risk into the expected return. This encourages financing with a positive environmental impact.

 

The Encouragement of Green Spending 

Many banks are encouraging customers to buy environmentally friendly products. The new loan policy has been designed to encourage the purchase of electric vehicles and solar panels. One bank also certified a green credit line to facilitate the sanitation work on the banks of the local river system. It includes the removal of chemical waste from the rivers. 

 

Conclusion 

The environment is our home and we must save it. By noticing the drastic change in the environment by human activities, it becomes important for humans to take some major actions. The actions that will save the environment, the actions that will be good for future generations, and the green transition is one of those actions that will surely help in saving the environment.

 

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About the author:

KAJAL THARWANI, OpenGrowth Content Team

An explorer who takes risks and learns from her mistakes. An aspirational content writer, studying social work. Kajal loves trying her hands in different crafts.


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