TERRA ECONOMICUS, , Vol. 16 (no. 2),

Economic development often goes hand in hand with the increasing pressure upon the extraction of fossil fuels, depletion of natural resources, and heavy impact on the environment. The advent of the modern industrial revolution and the rise of overproduction have resulted in large environmental degradation. Societies and organizations have had a tendency of not caring so much about the negative impacts of their activities on nature and environment, and their focus has been only on the generation of revenue and profits. Nowadays, various financial, consulting, banking, and industrial institutions must acknowledge that carrying the earth’s carrying capacity is finite, and thus they ought not to overuse the environment. These provisions are in accord with the principles of sustainable economic development that have to be adapted and followed in order to sustain balanced economic development in various sectors of the modern economy. This paper aims to highlight the ways through which the financial and banking sector can attain sustainable development, make sufficient financial profits, and at the same time how they can become “green” (i.e. function within the framework of the sustainable development and all its guiding principles). Sustainable economic development became the key point on the agenda of various economic and business institutions, so the banks and financial institutions are also an essential part of this trend and can hardly abstain from it. The paper describes how the new opportunities emerge for financial and banking institutions with the development of new environmentally-friendly technologies that mark the transition of humanity to the decarbonized economy.

Keywords: financial sector, state and commercial banks, insurance companies, sustainable development, social responsibility

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606