The financial sector has the potential to attract significant attention and large-scale funding for sustainable development. Sustainable finance involves investing in solutions that consider various economic activities and projects' social, governance, and environmental aspects. It also draws attention to issues such as obtaining permits for research into the development of alternative energy sources, as well as supporting businesses guided by the principles of fairness and sustainability.
The Environmental, Social, and Governance Criteria (ESG) is a set of enterprise behavior standards that socially conscious investors use to screen potential investments. The environmental factor gives investors an idea of what the company is doing to protect the environment. Social criteria refer to a company's management in relation to its employees, customers, and communities. Management criteria relate to remuneration, shareholder relations, and auditing.
With ESG, investors can conduct due diligence based on corporate policy and encourage companies to act responsibly. Today, many brokers, robo-advisers, and mutual funds offer investment products that meet these criteria. Moreover, the ESG criteria enable investors to avoid losing their investment if companies that engage in unethical or risky activities are held accountable. Investing in companies that implement sustainable ESG practices and the demand for financial professionals with knowledge in this area continues to grow.
Satellite technology can help monitor companies' compliance with their environmental obligations and detect violations. This technology allows you to collect large and independent data remotely. This is possible thanks to remote logistics chains and sophisticated outsourcing systems.
Historic satellite images provide information and insight into various global issues. Many impacts of human activities, including glacier melt, deforestation, pollution, and degradation of water bodies, can be detected and monitored using satellite technology. And satellite historical imagery makes it possible to see how any problems developed over time and discover important patterns.
In combination with machine learning technologies and artificial intelligence, satellite data provides even more opportunities, including processing this data. The data obtained can be used to control and track emissions, deforestation, and negative impacts on biodiversity for which enterprises are responsible. In addition, the data allows you to monitor the risks of various physical phenomena using climate applications and protect natural resources. Time series measurements, as well as historical satellite imagery, play an essential role in tracking the impact of human activity over time.
Palm oil production has been strongly associated with deforestation in recent years. Of course, this is not the only type of human activity that leads to deforestation, but it receives much attention. The financial sector exposes from time to time and is included in this industry's public control system. The negative impact on the environment, including deforestation, reduces the income of this production sector.
Environmental damage affects businesses in several ways. It carries with it legal and financial risks, as well as damages the reputation, and reduces the value of the company. For example, banks working with farmers need evidence of a sustainable expansion of production that will not come at the expense of deforestation. It is crucial as credit committees will take this factor into account when providing working capital. Historical satellite images provide a lot of helpful information about agricultural land that can be used to analyze and evaluate productivity.
Like many other industries today, the financial sector can get crucial benefits from satellite technology. Today, for conscious investors, the reputation of companies is essential, which is confirmed by economic, social, and managerial criteria. Compliance with sustainable principles and ESG practices can be verified and monitored using satellite technology. In addition, this technology also allows you to monitor the impact of various human activities and individual enterprises on the environment.
Such opportunities are essential for the modern financial sector when it aims to direct its efforts toward establishing sustainable development in various industries. Based on the received and confirmed data on the enterprise activities, it is possible to encourage those who operate their business ethically and develop towards a sustainable future.