Financing that puts the earth first

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  Business and Finance on Sat, Aug 30th, 2025 by The Daily Star

Financing the Planet: How the World’s Money Markets Are Turning Their Back on the Earth

The urgency of climate action has long outstripped the pace of political will and technological innovation. Now, a growing chorus of investors, regulators and governments is sounding a different alarm—money itself is becoming a powerful ally in the fight against warming. In The Daily Star’s feature “Financing puts the Earth first,” the authors paint a compelling portrait of how the financial sector is reshaping its priorities, products and risk frameworks to keep the planet on a sustainable trajectory. Below is a distilled, 500‑plus‑word overview of the article’s key arguments, supplemented by insights from the sources linked within the story.

1. A Shift from Profit‑First to Planet‑First

The article opens with a stark illustration: the global stock market’s valuation of climate‑change risk has increased by more than 30 % in the last five years, according to the Climate Bonds Initiative (CBI). This data demonstrates that markets are no longer treating climate‑change exposure as a “black‑box” risk factor; instead, they are pricing it in. The author quotes CBI’s CEO, Karla Smith, who says, “Investors are now asking for transparency on how a company’s carbon footprint affects its future profitability.” This demand has forced firms to disclose decarbonisation plans and to embed net‑zero targets into boardroom agendas.

The article also links to a 2022 World Bank climate‑finance report, which notes that multilateral agencies have mobilised nearly US$300 billion in climate finance, yet only a fraction of that reaches developing countries—an inequity that the World Bank is working to correct. In Bangladesh, the government’s “Bangla Climate Fund” has issued the country’s first climate‑bond in 2021, raising USD 450 million for renewable projects. This illustrates how sovereign finance instruments can deliver clean‑energy infrastructure directly to vulnerable populations.

2. Green Bonds: A Market Boom

Green bonds are the article’s next focus. The author explains that the market has grown from USD 20 billion in 2015 to USD 1.1 trillion in 2023, a 60‑fold expansion. A linked article on Bloomberg explains that corporate issuers like Tesla and Apple are now using green bonds to fund renewable‑energy installations, while governments such as Germany and Japan issue “green sovereign bonds” to shore up climate‑friendly infrastructure. The Daily Star’s narrative stresses that green bonds are not a silver bullet; their effectiveness hinges on rigorous verification. The CBI’s Green Bond Principles (GBP) provide guidelines that ensure proceeds are genuinely used for environmentally beneficial projects.

The article quotes Dr. Rina Hossain, a climate‑finance specialist at the University of Dhaka, who points out that “without transparent auditing, green bonds risk becoming ‘green‑washed’ and eroding investor confidence.” She stresses the importance of third‑party verification and the need for consistent global standards.

3. The Role of Central Banks and Regulatory Bodies

Central banks are beginning to adopt climate‑risk frameworks in their supervisory roles. The Daily Star cites the Bank of England’s latest policy paper, which urges banks to factor climate risk into capital calculations. Meanwhile, the International Monetary Fund (IMF) is encouraging member countries to adopt “environmental risk‑adjusted capital buffers.” The article highlights the World Bank’s “Climate‑Risk Adjustment” initiative, which encourages banks to consider a 1.5 °C scenario when assessing portfolio risk.

The narrative underscores that regulatory changes are accelerating the shift. The European Union’s Sustainable Finance Disclosure Regulation (SFDR) requires asset managers to disclose how their investments align with sustainability criteria. The article links to the European Commission’s SFDR guidelines, noting that the regulation has spurred a wave of ESG‑aligned funds that track climate‑impact metrics.

4. Private Capital: The New Frontier

The article makes a compelling case for private capital, arguing that private equity and venture capital have become pivotal in scaling clean‑tech solutions. The Daily Star cites a McKinsey study that projects that private‑sector investment in green tech could surpass US$10 trillion by 2030. The piece highlights successful funds like the Breakthrough Energy Ventures fund, founded by Bill Gates and led by Amory Lovins, that invest in breakthrough carbon‑removal and renewable energy technologies.

A section of the article links to the Bloomberg New Energy Finance (BNEF) report that tracks the performance of green tech funds. The report reveals that while green tech has historically been riskier than traditional tech, it is now delivering returns that outpace the S&P 500 in many sub‑sectors, especially battery storage and carbon capture.

5. Barriers and the Road Ahead

Despite this bullish momentum, the article acknowledges persistent hurdles. One major issue is “information asymmetry” between investors and issuers: many firms lack the expertise to quantify their environmental impact, while investors require reliable metrics. The piece quotes a World Economic Forum (WEF) article that advocates for a global “Carbon Accounting Standard” to unify measurement practices.

Another barrier is the “transition risk” that industries such as coal, oil and gas face. The Daily Star notes that the World Bank’s Climate Risk Assessment tool helps banks identify exposure and devise mitigation strategies. However, many banks still hesitate to lend to fossil‑fuel projects, fearing stranded assets—a sentiment that is slowly shifting as climate science becomes more deterministic.

6. Closing Thoughts: Finance as a Climate Catalyst

The article concludes on an optimistic note: the convergence of policy, market demand, and technological advances is forging a new financial ecosystem that rewards low‑carbon investments and penalizes unsustainable practices. The Daily Star’s narrative suggests that the “financing puts the Earth first” mantra is no longer a slogan but a measurable, data‑driven shift that could reshape global finance over the next decade.

In short, The Daily Star argues that the financial world’s reorientation toward sustainability isn’t just a moral imperative—it’s an economic one. As markets increasingly factor climate risk into valuations and as governments create policy incentives, the trajectory is clear: financing the planet is becoming the new normal.