Every bank in this region calls itself sustainable now. But there is no single agreed definition of what that actually means. Who decides what counts as green money? And can anyone actually check? Joining me is Dr. Jelena Janjusevic, Deputy Global Head of Department at Edinburgh Business School, Heriot-Watt University Dubai, and MFTA member. Jelena, welcome back to Wall Street to Mena.
Thank you for having me again.
What actually makes an investment count as sustainable today?
One of the biggest misconceptions is that sustainable investing simply means having an ESG label. It does not. Sustainable investment seeks to generate competitive financial returns while creating measurable environmental or social value. But good intentions alone are not enough. Investors are increasingly expecting evidence that an investment contributes to clearly defined objectives — whether that is a reduction in greenhouse gas emissions, improved energy efficiency, increased renewables, support for affordable housing, or enabling the transition to a low-carbon economy. Sustainable finance is no longer only about compliance. It is about how capital is allocated to create long-term value while managing risks that are increasingly affecting financial performance.
Who actually decides what is green or sustainable — the bank issuing the product, the regulator, or someone else?
No single organisation decides. The credibility comes from the entire ecosystem. Banks and asset managers design sustainable investment products. Regulators establish disclosure requirements and increasingly define what sustainability claims can be made. International frameworks like sustainability reporting standards and taxonomies provide common guidance. And then there are independent auditors and external reviewers who verify those claims. In simple terms, sustainability is not determined by marketing. It is established through governance, regulation, transparent reporting, and independent verification.
Different countries and institutions use different standards. Does that inconsistency actually matter to investors?
It matters considerably. Think of it this way — if every country used different accounting rules, comparing financial statements would be almost impossible. Sustainable finance faces a similar challenge today. Different taxonomies may classify exactly the same investment differently depending on the jurisdiction, making comparison more difficult, increasing compliance costs, and creating uncertainty that can drive international investors away. Regional flexibility is inevitable because economies have different priorities. But core principles — transparency, materiality, disclosure — must be consistent across markets.
Can an investor actually verify a sustainable label is real, or are they mostly trusting the bank's word?
Investors should never rely on the label alone. Today, many credible sustainable investment products publish detailed sustainability reports, disclose measurable ESG indicators, and obtain independent third-party assurance. Investors should look for a clear objective, transparent reporting, measurable performance indicators, and independently verified evidence of outcomes. The market is becoming more transparent than it was a decade ago. But due diligence remains essential. Trust should come from evidence, not from branding, labelling, or marketing.
What is the real difference between a genuinely sustainable investment and one that is just labelled that way?
The difference is measurable impact. A genuine sustainable investment can clearly explain what environmental or social outcome it is trying to achieve, how success is measured, and what evidence demonstrates that those outcomes have been delivered. Greenwashing, by contrast, relies on broad ESG claims and impressive marketing without changing the underlying investment strategy or providing meaningful evidence. If sustainability disappears once you remove the marketing brochure, it was probably never embedded in the investment strategy in the first place.
Should there be one universal standard everyone follows, or does that not work across different markets?
We definitely need greater global consistency around core principles — what should be disclosed, how sustainability performance should be measured, and how claims can be verified. But a completely identical global standard is probably unrealistic, given that countries have different economic structures, development priorities, and policy objectives. Just as companies operate in different markets but investors benefit from comparable accounting standards, something similar should apply to sustainability.
If you were advising a regulator here today, what is the first gap you would tell them to close?
I would focus on two things: improving disclosure and strengthening verification. Many sustainability claims are still difficult to compare because reporting remains inconsistent and the quality of assurance varies significantly. Investors need trust. If there is uncertainty, investors will pull back. Requiring standardised sustainability disclosures, consistent reporting metrics, and stronger independent assurance — that is what builds investor trust and ultimately drives investment into sustainable finance at scale.
Thank you so much for joining us today, Doctor Jelena.
Thank you for having me again. Bye.
