ESG TRANSITION AS A NEW PARADIGM OF GLOBAL ECONOMY AND SUSTAINABLE FINANCING

Abstract

The article examines the processes developing in the global economy, reflecting the transition to environmental friendliness (E), social responsibility (S) and high-quality corporate governance (G) and signifying the transformation of the financial market into the format of “sustainable financing”. The purpose of the article is the systematization of ideas about ESG transition and sustainable finance. The article examines the evolution of ESG, reveals the essence of ESG criteria in investment decisions, analyzes the most significant aspects characterizing the impact of ESG transition on the global economy and finance, assesses the readiness of the banking sector to operate in accordance with ESG principles. It has been established that the changing paradigm of the global economy, the foundation of which are the Sustainable Development Goals, the climate agenda and the ESG transition, have formed a new a new megatrend of the financial industry – “sustainable finance” or the new quality finance. The trends of recent years indicate the growth of financial products that meet the requirements of ESG principles, which investors are guided by. The response to the demands of the financial market included: the appearance of non-financial reporting and ESG ratings characterizing the company's work on its environmental, social and management risks; the formation of relevant institutional structures, such as rating agencies, expert analytical platforms, verifiers, etc. It has been concluded that investments in ESG are becoming the leading form of financing to achieve sustainable development goals, but the domestic financial sector is not quite ready to implement the ESG principles.