Financing The Transition and Redefining What Green Investment Means

Finance plays a critical enabling role in the transition to a low-carbon economy. Daniel Meneghin, Head of ESG at Lunar Bank, highlights how capital markets must shift their focus from traditionally financed industries to those driving the green transition. However, identifying companies that support decarbonisation is not always straightforward, particularly when many organisations contributing to the transition are not yet fully aligned with green taxonomies.

Meneghin also emphasises the need for better reporting, scientific understanding, and investor education to evaluate transition plans effectively. While climate disclosures are becoming more standardised, investors still face challenges in assessing whether proposed decarbonisation pathways are technically achievable. Ultimately, sustainable finance requires long-term thinking, as transitioning industries may not immediately compete with established sectors in terms of short-term profitability.