The Impact of Sustainable Financial Management Practices on Sustainable Business Performance
Abstract
The quest of sustainability has permeated every aspect of the global corporate landscape, with a growing focus on the adoption of sustainable financial management techniques. Green accounting principles, responsible lending practices, and other sustainable financial management strategies all have a positive impact on the success of sustainable businesses. These strategies include the incorporation of environmental, social, and governance (ESG) factors into investment decisions. Improved long-term financial performance results from the incorporation of ESG considerations, which aid businesses in identifying and managing environmental and social risk. Responsible lending practices make ensuring that businesses with sustainable business models receive financial support, promoting the adoption of ethical business practices. Green accounting practices also enable businesses to track and disclose the environmental and social consequences, promoting informed decision-making and stakeholder engagement. This openness strengthens the company's brand, draws in investors who care about social issues, and eases access to finance. Through improvements to resource utilization, waste reduction, and energy efficiency, sustainable financial management practices also help to reduce costs.
Keywords
Green Finance, Cost Efficiency, Carbon Footprint, Risk Management, Green bonds.