This guide examines how social and environmental pressures, including climate change, biodiversity loss, inequality and modern slavery, are reshaping financial markets. It is designed for students and professionals seeking to start or transition into sustainable finance. The guide clarifies how sustainable finance differs from traditional finance, outlines required skills and mindset shifts, and maps practical career pathways within a complex, interdisciplinary ecosystem.

Sustainable finance: Approaches and the ecosystem

The guide explains sustainable finance as a spectrum of approaches, drawing on RIAA’s Responsible Investment Spectrum. It ranges from ESG integration, which embeds environmental, social and governance factors into valuation, risk management and portfolio construction, to sustainable investing focused on themes such as renewable energy, infrastructure and circular economy solutions, and impact investing, which intentionally targets measurable positive outcomes alongside financial returns.

Beyond investment approaches, the ecosystem includes stewardship and active ownership, sustainability-linked finance, transition finance, climate and nature risk assessment (TCFD, ISSB, TNFD), carbon and biodiversity markets, fintech, policy, advisory, governance, research and communications roles. The guide highlights the breadth of sectors involved, including superannuation, asset management, banking, development finance and regulation.

Why sustainable finance matters now

Sustainability considerations increasingly influence company valuation, credit decisions and system-level risk assessment. The Australian Sustainable Finance Capability Framework emphasises transition planning and systems thinking as core capabilities. Climate and nature risks are framed as material financial risks, reinforced by Australia’s move towards mandatory climate-related financial disclosures from 2025.

The guide cites research indicating that 83% of Australians expect ethical investment of their money and notes that responsible investment funds have outperformed traditional funds over multiple time horizons. These trends are reshaping capital allocation, disclosure expectations and workforce skill requirements.

Barriers to the growth of sustainable finance

The guide identifies knowledge and skills gaps, short-termism, politicisation of ESG and data limitations as significant barriers. TCFD findings highlight insufficient investee data as a major reporting challenge, while inconsistent climate disclosures complicate risk assessment and comparison. Structural constraints, including limited bankable projects and fragmented coordination across finance and policy, further slow capital mobilisation and career development.

How to enter, or transition into sustainable finance

Transitioning requires foundational knowledge of ESG frameworks, climate and nature risks and regulation, alongside technical skills in ESG data analysis, modelling and impact measurement. Transferable skills such as communication, stakeholder engagement and problem-solving remain highly relevant. The guide encourages leveraging internal opportunities, cross-functional collaboration and strategic networking to build credibility.

It also emphasises assessing organisational fit by examining science-based targets, governance structures and transition plans, and maintaining continuous learning in a rapidly evolving regulatory environment.

Case studies

A case study of Cassandra Austen demonstrates how transferable financial modelling skills supported development of a woodland carbon project under the Woodland Carbon Code. Aware Super (A$160 billion AUM) illustrates large-scale ESG integration across asset classes, active ownership and impact investments in affordable housing and renewables, demonstrating alignment between fiduciary duty and sustainable outcomes.

Conclusion

Sustainable finance is becoming central to capital allocation and risk management. While barriers remain, regulatory momentum and investor expectations are accelerating integration. Professionals who combine traditional finance expertise with ESG capabilities can contribute to a more resilient and inclusive financial system.