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The concept of “sustainable finance,” which emerged in the 1990s, has evolved rapidly from a niche initiative to a strategic imperative for many banks. Sustainable finance refers to the process of taking environmental, social, and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
Sustainable finance enables financial institutions to influence corporate behavior, accelerate innovation, and promote collective progress toward a net-zero, resilient economy, all while ensuring that profits are aligned with purpose. This has prompted financial actors to reconsider their models, risk management frameworks, and long-term strategies.
However, as the world becomes increasingly fragmented, competitive, and unpredictable, the transition to a more sustainable economy remains uncertain. This uncertainty demands a new approach to strategic planning – one that is adaptive, resilient, and capable of navigating multiple potential futures.
This article presents a scenario-based framework, inspired by a strategic foresight analysis from First Abu Dhabi Bank (FAB). It is designed to help financial institutions develop robust strategies in an evolving and highly dynamic sustainable finance landscape.
“At FAB, we see sustainable finance as a powerful lever for positive change, enabling our clients, communities, and the wider economy to accelerate the transition to a low-carbon, inclusive future. By mobilizing capital, innovating new financial solutions, and embedding ESG at the core of our strategy, we are not only meeting our own ambitious goals but also empowering others to achieve theirs. Together, we are shaping a resilient and sustainable tomorrow.” Shargiil Bashir, EVP & Chief Sustainability Officer, FAB.