Why should sustainable finance be given priority?: Lessons from pollution and biodiversity degradation
AbstractPurpose – The purpose of this paper is to demonstrate that the relatively new concept of sustainable finance, although very apt and timely, needs to address many major issues for it to be meaningful and if it is to achieve its desired objectives. Design/methodology/approach – The study identifies some of the major issues that need to be clarified and addressed including: defining the kind of sustainability that is envisaged; examining issues relating to the use of high-discount rates and its compatibility with the goals of sustainability; the case of excessive pollution due to adverse selection, moral hazard and lobbying; and specialisation and path dependent systems that are detrimental to future production. Findings – The paper demonstrates why the concept of sustainable finance is timely and why it is necessary to take into account the potential major issues that need to be considered and adequately addressed. Research limitations/implications – The challenges that lie ahead are many, and the sooner they are addressed, the more credible and potent sustainable finance will be. Practical implications – This paper discusses the major issues and examples of pollution and biodiversity degradation that need to be considered with sustainable finance. The paper also shows why economic growth without considering pollution impacts and path dependent systems is detrimental to future production, which violates the concept of sustainable finance. Originality/value – Sustainable finance is a relatively new concept that is fast becoming important as financial investments are increasingly required to prove sustainability credentials. However, despite its increasing popularity many major issues need to be dealt with if this concept is to be truly meaningful and potent in achieving its objectives.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Accounting Research Journal.
Volume (Year): 23 (2010)
Issue (Month): 3 (November)
Pages: 267 - 280
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Web page: http://www.emeraldinsight.com
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Other versions of this item:
- Clevo Wilson, 2010. "Why should sustainable finance be given priority? Lessons from pollution and biodiversity degradation," School of Economics and Finance Discussion Papers and Working Papers Series 260, School of Economics and Finance, Queensland University of Technology.
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hanley, Nick & Shogren, Jason F. & White, Ben, 2001.
"Introduction to Environmental Economics,"
Oxford University Press, number 9780198775959, September.
- Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-65.
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