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Finance, Sustainability and Negative Externalities. An Overview of the European Context


  • Magdalena Ziolo

    () (Faculty of Economics and Management, University of Szczecin–Poland, 71 101 Szczecin, Poland)

  • Beata Zofia Filipiak

    () (Faculty of Economics and Management, University of Szczecin–Poland, 71 101 Szczecin, Poland)

  • Iwona Bąk

    () (Faculty of Economics, West Pomeranian University of Technology Szczecin, 71-270 Szczecin, Poland)

  • Katarzyna Cheba

    () (Faculty of Economics, West Pomeranian University of Technology Szczecin, 71-270 Szczecin, Poland)

  • Diana Mihaela Tîrca

    () (Faculty of Economics, “Constantin Brâncusi” University of Târgu-Jiu, 210185 Targu-Jiu, Romania)

  • Isabel Novo-Corti

    () (Economic Development and Social Sustainability Research Group (EDaSS), Department of Economics—Universidade da Coruña—Spain, Campus de Elviña, s/n, 15071 A Coruña, Spain)


The goal of the paper is to examine the relation between finance and sustainability, with a special emphasis on the impact of negative externalities. Sustainable development as a concept aims to mitigate negative externalities. Conventional finance offers no room for the environment and society. Therefore, three-dimensional sustainable finance has appeared. This paper is the first original attempt to examine the relationship between: financial, economic, environmental and social development indicators from the sustainability perspective, with a special focus on externalities. To study the disparities between the European Union (EU) countries belonging to the OECD in the field of sustainable development and sustainable finance, the multi-criteria taxonomy was used. The basis of the analyses was the indicators transformed according to the relative taxonomy method. The database, based on Eurostat, contains indicators describing pillars of sustainable development such as: economic (12 indicators), social (28), environmental (7) and sustainable finance (16). The study analyses the sample of 23 countries in 2007, 2013 and 2016. The results confirm a positive relationship among the analysed indicators. On the basis of 62 statistical features selected according to the statistical methods, 7 groups of countries were obtained in 2007 and 2013 and 8 groups in 2016. In the case of Scandinavian countries, one can observe a permanent separation of economic growth from its negative impact on the natural environment. Such dependencies are no longer so obvious in the case of other EU countries belonging to the Organization for Economic Cooperation and Development (OECD). Therefore, attention should be paid to the most economically developed countries in Western Europe, i.e., Belgium, Germany, Luxembourg, the Netherlands and the United Kingdom, whose high rankings in the case of economic, social and very often also financial results correspond to much worse results in the case of environmental development.

Suggested Citation

  • Magdalena Ziolo & Beata Zofia Filipiak & Iwona Bąk & Katarzyna Cheba & Diana Mihaela Tîrca & Isabel Novo-Corti, 2019. "Finance, Sustainability and Negative Externalities. An Overview of the European Context," Sustainability, MDPI, Open Access Journal, vol. 11(15), pages 1-35, August.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:15:p:4249-:d:255221

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    Cited by:

    1. Alessandro Rizzello & Abdellah Kabli, 2020. "Sustainable Financial Partnerships for the SDGs: The Case of Social Impact Bonds," Sustainability, MDPI, Open Access Journal, vol. 12(13), pages 1-22, July.
    2. Iwona Bak & Katarzyna Cheba & Irena Lacka, 2020. "Sustainable Development and Innovations- How They Work Together?," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 93-113.

    More about this item


    sustainable finance; sustainable development; negative externalities; environmental economics; sustainability; taxonomy;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products


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