Frm Guest Blogger Jenny Richards: Facts on Eco Finance and Its Implementation

Eco finance is actually a phenomenon that is known to integrate the financial world and the business world with eco-friendly behaviour. This is supposed to be an arena involving several participants including business and individual consumers, investors, producers and even financial lenders.  Eco finance may be expressed in various ways as per the participant. Eco finance is driven by financial incentives, an intense desire to safeguard and preserve Mother Earth or may be a combination of the two.

Eco finance is not only about environmental friendly behavior like recycling of all used goods or promotion of mass transit, but it is also, about making it a point not to promote any activity or business that may be adversely affecting the environment at present or whose damaging impact could be felt by generations to follow. Eco finance is actually the use of different financial instruments for protection of the environment.

How Are Eco Finance Funds Utilized

A number of institutions which lend funds to individuals, corporations and businesses are able to conduct these transactions in an eco-friendly manner. Through these green finance avenues, the funds are used to facilitate the growth and development of renewable energy sources. For example, any lender can finance a solar energy plant, or a wind power generation facility. These renewable energy sources are good for the environment as well as common among green or eco-friendly financiers.

Eco or Green financing is most definitely not available to producers of energy who use and produce power from fossil fuels like coal, petroleum and natural gas. These release extremely harmful emissions into the air, like carbon monoxide, sulfur dioxide and methane. Any participant in green finance would skate clear of firms like these. Even clean coal, which emits less, and filtered plants cannot be considered eco-friendly investments.

Green or Eco finance can also be encouraged by offering several environmental incentives to investors and participants. These investments are considered highly proactive green financing, and are hence, attractive to large corporations, small businesses as well as individual investors. If, for example you run a firm which manufactures vehicles, you could invest in another firm which is coming up with a new type of fuel which has been tested to contain much lesser pollutants. This is considered to be good eco finance and goes a long way in building a company’s profile, alongside being a good gesture towards saving the environment.

You can offer your customers an incentive like planting a tree or donating a stipulated amount to an environmental NGO for every car purchase made. Not only is this a noble gesture, but also a good way to reel in more customers, and hence, green finance is a win-win for you.

Venture capitalists or companies that fund start-up firms for growth, are known to participate actively in eco finance. Several clean energy companies support and back emerging and innovative technologies that are likely to generate a major chunk of the global power in the times to come. Venture capitalists are known to have expertise and specialization in risky and innovative technologies and as such, play a pivotal role in green financing.

Who Requires Eco Finance?

All those companies or businesses who are interested in adopting eco-friendly approach of management and are taking concrete steps toward attainment of sustainable development are in need of eco financing. If you are prepared to make your consumption and production practices and strategies greener and certainly more efficient, you could get green finance from reputed finance companies. These reliable finance companies believe that it is necessary to make investments for future and they would like to promote those companies who respect and work for the preservation and conservation of the planet. When you take a green debt, make it a point to repay.

Author Bio: Jenny Richards is an environmental campaigner. After achieving her major in Finance, she worked for four years in the private sector. In her free time she reads horror fiction and also browses through debt consolidation reviews and other financial articles.