Sustainable Development Finance - Key Concepts

Vocabulary flashcards covering key terms, frameworks, and mechanisms in sustainable development finance and ESG.

Blended Finance

Financial mechanisms that combine public and private capital to reduce investor risk and accelerate climate investment implementation.

Impact Finance

A segment of finance directly targeted at achieving a positive, measurable social or environmental impact alongside a financial return.

Externalities (Efekty Zewnętrzne)

Consequences of economic activities undertaken by business entities that are not fully reflected in market prices.

Internalization of External Costs

The mechanism of incorporating environmental costs into economic calculations using tools such as carbon pricing, ecological taxes, or emissions trading systems.

DNSH Principle (Do No Significant Harm)

A regulatory classification principle applied to environmentally neutral activities ensuring they do not cause significant negative externalities and meet minimum environmental standards.

ESG Reporting

The disclosure of non-financial data regarding a company's environmental and social impact to build investor trust and limit greenwashing risk.

Global Reporting Initiative (GRI)

An organization that provides non-financial reporting standards to help companies report data transparently and facilitate comparability of environmental and social impacts.

Sustainable Development Goals (SDGs)

A set of $17$ global goals adopted during the United Nations Sustainable Development Summit, including goal $7$ (clean energy), goal $11$ (sustainable cities), and goal $13$ (climate action).

ESG Factors

A set of criteria used to evaluate a company's operations in three main areas: Environmental, Social, and Corporate Governance.

Sustainability-Linked Loans (SLL)

Loans tied to ESG performance metrics that can be used for any corporate purpose, unlike green loans, provided specific target indicators are met.

Loan Market Association

An organization that develops standard terms and guidelines for financial instruments such as Sustainability-Linked Loans (SLL).

Best-In-Class Strategy

An ESG fund investment strategy that selects and invests in the top-performing entities within a specific industry or economic sector.

Environmental Criteria (ESG)

The evaluation aspect of ESG focused on a company's impact on the planet, including greenhouse gas emissions, energy efficiency, renewable energy usage, and waste management.

Social Criteria (ESG)

The evaluation aspect of ESG focused on relationships with employees, customers, and society, including working conditions, human rights, diversity policy, and social engagement.

Corporate Governance (Ład Korporacyjny)

The evaluation aspect of ESG concerning how a company is managed and transparently operated, including board structure, supervisory board independence, executive remuneration, and anti-corruption.

Green Bonds (Zielone Obligacje)

Debt instruments issued by governments, local authorities, or corporations where proceeds are specifically dedicated to funding ecological projects.

Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej (NFOŚiGW)

The primary public institution financing green transformation in Poland, offering subsidies and loans for RES, energy efficiency, waste management, zero-emission transport, and climate adaptation.

NFOŚiGW Support Scale

Public financial support allocated in Poland for environmental and green transformation projects, amounting to approximately $30\text{ mld zł}$ in $2025$ and a planned $37\text{ mld zł}$ in $2026$.

Commercial Bank ESG Loans in Poland

Investment loans offered by major Polish banks such as PKO Bank Polski, Bank Pekao, and Santander Bank Polska with interest rates tied to achieving ESG goals.

ESG Fund Managers in Poland

Financial institutions offering ESG investment products on the Polish capital market, including PKO TFI, Santander TFI, and NN Investment Partners.

Global ESG Funds

Prominent global investment funds targeting ESG-compliant assets, such as iShares ESG Aware MSCI World ETF, Vanguard ESG Global All Cap UCITS ETF, and Lyxor MSCI World ESG Leaders ETF.