VERONIQUE J. A. LAFON-VINAIS | Associate Professor of Business Education, Department of Finance,
Hong Kong University of Science and Technology
The sustainable finance market has expanded rapidly in the past 10 years, from a fringe “movement” to a sizeable market providing significant financing and investing opportunities. We provide a definition and overview of the sustainable finance markets and seek to understand the process by which traditional financial products and instruments can be financially engineered to become sustainable finance products; through two main avenues: use of proceeds and performance-based pricing. We provide some recent examples of innovative structures and conclude by showing that the sustainable finance market will continue to develop once solid foundations have been set.