What would a sustainable capital market mean for us?

With rapid advancements in the economic dealings between nations, large corporations and other entities, there are increasing complexities in the global capital market. The global market is much like a delicate thread of gold—even the slightest structural change can lead to a market crash.

The global capital market can be affected by several factors like stock market changes, the devaluation of a strong currency, or a struggling major economy. A compromised global market can damage economic development in nations across the world.

As business corporations are a major element in the intricate global market network, employees working for these organisations—especially members of the senior management—should be aware of the factors affecting the international capital market. Having an extensive business knowledge allows them to devise strategies for sustainable policies to positively impact the world.

If you aspire to join the financial world as a part of a major business organisation, you need an extensive understanding of capital market development and sustainable investments. Let’s have a look at sustainable markets, their creation, and benefits to the global community.

What exactly is a sustainable capital market?

In simplest terms, a sustainable global market is how the global market would ideally look when fair-trade practices are used globally. This makes for more transparency and diminishes the impacts of past business malpractices. A sustainable market is free of any biases and gives access to any organisation or country. This ideal situation can also be created when individuals and businesses make sensible, ethical capital market investments. This drives trade markets with a goal for holistic economic growth, rather than individual gains.

Creating a sustainable market

A completely sustainable global market is still a distant dream. However, the current global market has proven to behave sustainably for short stretches of time. The three global phenomena that aid the creation of a sustainable international market are free and fair-trade policies, stable governments and economies, and the presence of powerful regulatory bodies.

Free trade forms the basis of any financial stability. A free trade set-up, devoid of unfair practices and biases, gives access to developing economies and guides their economic development. Economic advancement of small and underdeveloped countries, in turn, brings more capital back into the global market and helps maintain stability.

This brings us to the importance of stable governments and economies. Logically, economically developed countries can better contribute to the sustainability of the global market. A country can focus on economic development only if it has a stable political system. History shows that periods of political instability are always followed by economic depressions or stock market crashes. 

There is a need for international regulatory bodies to oversee the many countries and business corporations impacting the global market. This regulation reduces fraud and malpractices that hurt global market stability. Economic forums such as the International Monetary Fund are responsible for ensuring the stability and sustainability of the global market.

So, what are the benefits of a sustainable capital market?

To create a sustainable market, you must first understand why it is important to achieve. The main benefits of a sustainable global market are greater public engagement, expanded corporate operations, new economic development, positive impacts on social and environmental issues, and limiting impacts of economic depression.

On the matter of greater public engagement, companies that employ best practices and encourage fair trade also enjoy the patronage of a larger variety of customers. A sustainable global market enables organisations to meet financial goals without using unfair practices. This can improve brand image among the general public.

A stable global market supports coordination between corporations and national governments. Such a system can reduce the hurdles an organisation might face when expanding operations in foreign countries. A free stable and sustainable global market can develop new economies and strengthen the existing ones.

A stable and free market benefits not only for-profit organisations, but also helps several charitable organisations grow and support humanitarian causes. Issues like infant mortality and child trafficking can be addressed with better resources in a sustainable capital market. These improvements can lead a nation to become a more progressive society,

Another major benefit of a stable global market is the ability to lessen the impacts of economic depression. It can cycle surplus funds from stable economies to the ones battling with economic crises. This way, no single nation must bear the brunt of a financial depression for a prolonged period.

The key reason current markets fail is the misallocation of funds, and poor financial decisions by national governments and international corporations. The global market acts as a house of cards—even a single card toppling at the bottom can bring down the entire structure. A sustainable international market can stabilise this structure and contribute to the progress of our entire planet.

A sustainable global market can become a reality if individuals are armed with excellent financial knowledge and astute business skills. To become part of the revolution and create a free and fair global market, consider earning a degree in finance. The Master in Finance and Investments from London School of Business and Finance is an ideal path to reach this goal, as it offers a specialised curriculum taught by expert faculty. Click here to enrol on your programme, and begin your financial career!