Book Review: "Green Investing: Changing Paradigms and Future Directions"

The urgency of our planet’s perilous state, marked by the existential threat of climate change and environmental degradation, due to anthropogenic[1] activities, demands a radical shift in our approach to finance and investment. Despite the temporary decline in carbon dioxide (CO2) emission in 2020, with the largest annual drop in global-energy related CO2 emissions attributed to a contraction of economic and social activity as a result of the COVID-19 pandemic, global emissions rebounded in 2021, rising above pre-pandemic levels. The need for sustained reductions in CO2 emissions to enable long-term climate stability was highlighted by The Intergovernmental Panel on Climate Change (IPCC) in their Sixth Assessment Report (AR6). This report called for increased mitigation, adaptation, and finance strategies to reduce greenhouse gas emissions to net zero by 2050, in accordance with the Paris Agreement. Transitioning to a carbon-neutral, climate resilient, and resource-efficient economy by 2050 will require significant investment from the private sector to bridge the funding gap. According to the World Economic Forum’s Net Zero Industry tracker 2023 report, $13.5 trillion in investments is required (by 2050) to transition to a sustainable and carbon-neutral future successfully. 

Due in part to policies and regulatory frameworks aimed at achieving the milestone of net-zero emissions by 2050, coupled with socioeconomic issues such as the spread of the COVID-19 virus, organisations have been increasingly adopting environmentally friendly approaches to financing their business models and investing in green projects. The growing prominence of green finance reflects the shift towards integrating environmental considerations into the financial decision-making process and understanding monetary implications associated with green investments. Against that backdrop, it becomes imperative to address the complexities and ambiguities within the green finance academic landscape. The book Green Investing: Changing Paradigms and Future Directions, written by Alessandro Rizzello, serves as a crucial resource by providing a comprehensive overview of the green finance sector and examines the evolving landscape of green financial instruments, particularly new developments in the portfolio design of green investments. 
 

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