FAQ`s

An instrument generally issued by financial or banking institutions that incorporates environmental, social and corporate governance (ESG) considerations in its design, management and investment objectives. These types of products can be configured through different strategies or approaches, as some may be geared towards investing in companies that meet certain ESG criteria, while others may finance specific projects with a positive impact on the environment or society, such as renewable energy, access to affordable housing or community development projects. The objective of these products is to generate financial returns while promoting sustainable and responsible practices. Examples of such products are green bonds, green loans or sustainable investment funds.

A sustainable business model is one that explicitly considers the environment and society as a key factor in generating value, balancing the needs and demands of the present without compromising future ones. They seek to maximise their positive impact while minimising their negative impact on the environment and society.

It is a set of policies and actions designed to guide and promote investment towards activities that contribute to long-term economic, social and environmental sustainability. This strategy seeks to align the financial system with the objectives of the Paris Agreement on climate change and the United Nations Sustainable Development Goals. As part of this strategy, different tools have been developed to put it into practice, such as, for example, the development of different standards, the publication of the Taxonomy or Green or Socially Responsible Investment.

There are different financial products that meet the definition of sustainable, as they incorporate environmental, social and/or good governance (ESG) criteria to achieve competitive long-term financial returns and a positive environmental impact. These products can range from socially responsible investment funds, sustainable pension plans, green bonds or social loans. In order to consider investing or financing in specific companies and to assess the performance of each company, there are a number of sustainability indices that score each company based on ESG aspects. These include the Dow Jones Sustainability World Index (DJSI World), FTSE4 Good Global 100 Index and MSCI, among others.

According to the Green Bond Principles (GBP), as defined by the International Capital Market Association, green bonds are any type of debt instrument where the funds raised are exclusively used to finance (or re-finance) new (or existing) green projects in part or in full. They must have a clear environmental benefit and be aligned with the four components of the GBP guidance, which are: the use of funds, the project evaluation and selection process, the management of the Funds and the reporting.