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Development of responsible investment within the concept of sustainable finance

Author

Listed:
  • Viktor P. Ivanitsk

    (Ural State University of Economics, Ekaterinburg, Russia)

  • Larisa D. Petrenko

    (Industrial University of Tyumen, Tyumen, Russia)

Abstract

The strengthening of globalisation processes together with the climate change, the slowdown of the world economy, and growing income inequality have a profound impact on the transformation of the global economic and socio-political landscape and make the theme of sustainable development progressively more relevant. The environmental trend within the humancentered trajectory of civilization affects the financial sphere through the introduction of the Environmental, Social, and Governance (ESG) criteria in financial decision-making, creation of appropriate institutions and accumulation of financial resources, as well as transformation of financial systems’ functions. Against a background of these trends, responsible investment, or ESG investing, which takes into account environmental, social and managerial factors when choosing investment strategies, receives a significant boost. The aim of the research is to formulate new approaches to expanding responsible investment in the economy in the context of developing sustainable finance. The methodological basis of the research includes the concepts of sustainable development, finance and investment. The study uses a dialectical method to investigate the dynamics of economic phenomena, their interrelation and interdependence; and a system approach to the object of research implemented through graphic representation, grouping and comparison, analysis and synthesis. The paper summarises the theory and practice of responsible investment, examines the trends in the responsible investment market as well as its peculiarities. The authors prove the need to encourage responsible investment within the sustainable finance framework by removing information and structural restrictions. This will ensure the development of responsible investment tools and gain greater reputational advantages for companies. The authors produce recommendations for organising this process, in particular, to employ international practices and adopt the corresponding government policy.

Suggested Citation

  • Viktor P. Ivanitsk & Larisa D. Petrenko, 2020. "Development of responsible investment within the concept of sustainable finance," Journal of New Economy, Ural State University of Economics, vol. 21(4), pages 63-78, December.
    • Handle: RePEc:url:izvest:v:21:y:2020:i:4:p:63-78
    DOI: 10.29141/2658-5081-2020-21-4-4
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    References listed on IDEAS

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    1. Satyajit Bose & Guo Dong & Anne Simpson, 2019. "The Financial Ecosystem," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-05624-7, September.
    2. Philipp Krueger & Zacharias Sautner & Laura T Starks, 2020. "The Importance of Climate Risks for Institutional Investors," The Review of Financial Studies, Society for Financial Studies, vol. 33(3), pages 1067-1111.
    3. Dan-Costin Nitescu & Maria-Alexandra Cristea, 2020. "Environmental, Social and Governance Risks – New Challenges for the Banking Business Sustainability," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(55), pages 692-692, August.
    4. Rajesh Kumar Bhaskaran & Irene Wei Kiong Ting & Sujit K. Sukumaran & Saraswathy Divakaran Sumod, 2020. "Environmental, social and governance initiatives and wealth creation for firms: An empirical examination," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 710-729, July.
    5. Satyajit Bose & Guo Dong & Anne Simpson, 2019. "The Financial Ecosystem," Palgrave Studies in Impact Finance, in: The Financial Ecosystem, chapter 0, pages 19-46, Palgrave Macmillan.
    6. Thiermann, Ute B. & Sheate, William R., 2020. "Motivating individuals for social transition: The 2-pathway model and experiential strategies for pro-environmental behaviour," Ecological Economics, Elsevier, vol. 174(C).
    7. Satyajit Bose & Guo Dong & Anne Simpson, 2019. "Sustainable Investing and Asset Allocation at Global Scale," Palgrave Studies in Impact Finance, in: The Financial Ecosystem, chapter 0, pages 225-251, Palgrave Macmillan.
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    Citations

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    Cited by:

    1. Larisa D. Petrenko, 2021. "Green Trend in Global Energy Development: Tendencies and Opportunities," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 1-7.
    2. Hasddin & Abd. Azis Muthalib & Edward Ngii & Asrip Putera, 2022. "The Ability of Green Open Spaces in Greenhouse Gas Control to Achieve Green Cities in Kendari City," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 327-331.
    3. Larisa D. Petrenko & Bahodirhon Sh. Safarov, 2022. "Prospects for Nuclear Energy in the Framework of Implementation of the Sustainable Development Concept," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 59-70, October.
    4. Yohanes Boni & Wa Ode Rachmasari Ariani & Hasddin Hasddin, 2023. "Study of Environmental Economic Performance According to Energy Use and CO2 Emissions, Air Quality, and Government Policies to Achieve SDGs in Baubau City," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 452-462, November.

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    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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