Shih-Fang Lo and Julia Yang
There is a profit side and a responsible side to any business, and the two factors have to be balanced. With the threat of global warming and environmental deterioration, the government policy on environmental protection remains active from the last century worldwide. Business will face more strict restrictions on energy uses and business process in the natural resources constrained society. Governments’ environmental and energy policies are stimulating grand new industries, such as energy efficiency industry, new and renewable energy industry, and new services. The policy trends have not only created green new industry, but also brought growing green investment opportunity. This article therefore aims to investigate what’s been happening in green finance and its prospect.
Green Finance Starts from Corporate Responsibility
Recent financial scandals such as subprime mortgage crisis have emphasized the need for greater transparency and accountability. A more humane, ethical, and transparent way of doing business is therefore broadly discussed. Take the term ‘corporate responsibility’ for example, the classical view from the shareholder approach is that the social responsibility of a business is to increase its profits and value for its owner. However, the stakeholder approach points out that business is not only accountable to its shareholders, but should also consider stakeholder interests which may affect or may be affected by the operations or objectives of a business. It is gradually extended to ‘corporate sustainability’ defined as a business approach that creates long-term shareholder value by embracing opportunities and managing risk from three dimensions: economic, environmental, and social dimensions. A sustainable company is one whose characteristics and actions are designed to lead to a ‘sustainable future state,’ such as value creation, environmental management, and human capital management, etc.