responsible investment
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2021 ◽  
Vol 14 (1) ◽  
pp. 339
Author(s):  
Inese Mavlutova ◽  
Andris Fomins ◽  
Aivars Spilbergs ◽  
Dzintra Atstaja ◽  
Janis Brizga

The latest studies reveal that the COVID-19 pandemic has pushed investors in developed economies to focus more on the value attached to environmental and social responsibilities. Unfortunately, socially responsible investment and compliance with environmental, social and governance criteria are not given enough priority in Latvia at present. The purpose of the study is to investigate how the COVID-19 pandemic has influenced the willingness of Latvians to invest in assets that meet environmental, social and governance (ESG) criteria and factors influencing investors’ choice based on their financial literacy. Different views on sustainable investments, socially responsible investments and the relevance of environmental, social and governance criteria from private investors’ perspectives were analyzed to identify factors influencing investment decisions in favour of sustainable investments. Quantitative analysis was carried out to reveal the regularities between financial literacy, the willingness to invest to meet the ESG criteria and the level of education and income of the Latvian population, as well as their savings/investment experience. Such statistical methods as descriptive statistics and hypothesis testing were applied to perform an analysis of the results. The authors’ findings include the importance of sustainable investing to Latvian society, changes of attitude towards ESG investing in different private investors’ groups under the COVID-19 crisis, and the effects of these changes on the financial well-being of the population and, on the basis of these findings, have come to the conclusion that the willingness to invest in the assets that follow environmental, social and governance criteria depends on the level of education, savings/investment experience and income level.


2021 ◽  
Vol 29 (4) ◽  
pp. 232-240
Author(s):  
Anna Vorontsova ◽  
Alex Plastun ◽  
Hanna Filatova ◽  
Elena Kostenko ◽  
Eldar Dzhobava

Purpose: To substantiate the place and role of the responsible investment in the structure of the stock exchange market. Methods: Structure-functional in order to form an idea of the structure of the stock exchange market, determining the place and role of responsible investment elements in the stock market organization; systematic analysis to identify current trends and patterns in the functioning of the socially responsible investment segment by geographical regions of the world; statistical and graphical methods for quantitative and visual presentation of the results of the stock market sectors analysis, represented by responsible investment elements. Findings: The definition of «responsible investment» and «stock market» has been clarified; a number of subjects, objects and forms of responsible investment, which are elements of the stock market, are singled out and substantiated; the generalization of activities of stock exchanges in the field of responsible investing is carried out; the dynamics of stock market sector indicators, which are represented by elements of responsible investment, are analyzed; key reporting standards used by stock exchanges in disclosing ESG issues are analyzed. Theoretical Implications: A comprehensive assessment of the functioning of socially responsible investment segment as part of the stock market is carried out, the place and role of responsible investing in the stock market structure are substantiated, which creates a basis for the development of effective measures to increase the stock market efficiency of Ukraine and its transformation into an effective and stable source of investment resources. Future Research: The results can be used in the context of further study of the stock market transformation in Ukraine on the basis of a socially responsible trajectory and fractal analysis. Paper Type: Theoretical.   The study was performed within the state budget research «Fractal model of the stock market transformation in Ukraine: socially responsible investment to achieve the Sustainable Development Goals» № 0121U100473.


Author(s):  
V. Martynov

The work is devoted to the direction of digitalization in the innovative economy, the financial aspect. The sixth technological order, the trend "Resources, energy and ecology", commercialization and digitalization of innovations, the finiteness of resources are considered. The issues of the "green" economy, the prerequisites for its creation, the practice of state regulation, the concept of "4R" use of resources, renewable energy sources, distributed energy are consecrated. The article considers electric power storage devices that synchronize the processes of energy production and consumption. The analysis of the increase in carbon-free energy is made. The prospects of the Russian Federation in the "green" sector of the economy, the forecast for the "Strategy for the long-term development of the Russian Federation with low greenhouse gas emissions until 2050", shows the importance of implementing the principles of environmental, social and corporate governance, responsible investment. The tendency of the unification of states on the basis of the "green" economy is shown. The conclusion is made about the action program with practical application.


Author(s):  
E. Altukhova

The modern climate agenda requires tremendous efforts from all market participants, including in terms of improving management mechanisms. It is important to have a working toolkit available that can fulfill the interests of all participants. In this regard, the stock market comes to the fore, which is acquiring special significance today. The emergence of green bonds, as well as other methods of hedging risks using stock market instruments, is becoming an integral part of the ESG agenda. In recent years, the world community has been trying to focus its efforts as much as possible on achieving the principles of sustainable development through the stock market. In these conditions, the existence of well-developed mechanisms for regulating the issue and circulation of financial instruments that contribute to solving climatic and social problems becomes a rather important aspect. The article discusses the features of the use of green and social bonds. The contradictions and systemic shortcomings that hinder the process of introducing «green» financial products have been identified. The experience of Russian and foreign financial institutions in the field of responsible investment has been studied. The author also analyzed the regulatory practice and formulated proposals to ensure the consistency of interests of the participants in the process. The paper gives recommendations in terms of synchronizing work on the formation of ESG-ratings, and also substantiates the importance of the management component in the sustainable development system.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jennifer Brodmann ◽  
Phuvadon Wuthisatian ◽  
Rama K. Malladi

PurposeThe purpose of the paper is to analyze socially responsible investment (SRI) asset performance compared to traditional assets using the MSCI KLD 400 Index. The authors examine the required return that investors expect to maintain their holdings in SRI stock and whether SRI stocks can be used for diversification during financial crises.Design/methodology/approachThe authors examine SRI stocks' liquidity from the MSCI KLD 400 index, encompassing all environmental, social and governance (ESG) factor investments over 25 years, from 1990 until 2019. The authors test whether sorting portfolios based on their excess return, liquidity and volatility can explain the difference in SRI and non-SRI stocks' returns and then examine the global financial crisis' (GFC) impact on excess returns for SRI and non-SRI assets.FindingsThe authors find a significant difference in liquidity and volatility between SRI and non-SRI stocks and that SRI stocks perform better during financial crises. The results suggest a possible general investor preference to invest in non-SRI stocks despite our findings that SRI stocks tend to withstand financial risk better than non-SRI stocks. The authors find that long-term investors may be willing to forego short-term gains to reduce their overall risk exposure during crises.Originality/valueSRI is gaining international popularity as an alternative investment that includes ratings based on ESG factors. Previous studies provide mixed results of whether SRI stocks outperform conventional stocks. In addition, there is limited research examining the liquidity and volatility of SRI assets. The authors compare the differences between SRI and non-SRI stocks in terms of excess return, volatility and liquidity and compare the liquidity of SRI and non-SRI stocks during the financial crisis.


2021 ◽  
Vol 22 (3) ◽  
pp. 1240-1255
Author(s):  
Norsiah Kadir ◽  
Sabri Nayan

The present paper attempts to investigate the significance influence of some selected economic variables on the international demand for medical tourism in Malaysia by utilizing Pooled Mean Group (PMG)/Autoregressive Distributed Lag (ARDL) model based on panel data set of ASEAN-4 countries spanning from 2001 to 2017. Findings of the study indicate that the price of medical tourism, travelling cost, real per capita income, exchange rate and health expenditure are statistically significant in influencing international demand for medical tourism in Malaysia for both long run and short run. Moreover, price of tourism in the substitute destination (Indonesia) and inflation are also statistically significant in determining international demand for medical tourism in Malaysia in the short run. The findings are in line with the economic theory. Therefore, to attract more international medical tourists, Malaysia needs to maintain it price competitiveness relative to other substitute destinations in the region, reduce the transport cost as well as improve the quality of medical services provided. Besides, private operators and market participants should influence necessary changes in medical tourism framework to ensure that services are effective and efficient. Ultimately, market players in medical tourism sector should practice Sustainable Responsible Investment (SRI) with aim to stabilize between medical tourism development and social responsibility.


Author(s):  
Caroline D. Ditlev-Simonsen

AbstractFinance plays a central function in the business world. From being included in small and specialized funds, Environment, Social, and Governance (ESG) and socially responsible investment (SRI) have become part of the mainstream for investors and analysts. In this chapter, I will address what ESG, SRI, environmental and social risk assessment, and ethical investment are about, as well as different investment strategies taking these into account. Further, dilemmas that arise are introduced such as what is a sustainable sector or product and how this differs based on the values of individuals. The move from addressing sustainability issues as a risk reduction activity to a business opportunity is discussed. Finally, the Norwegian Pension Fund, the world’s largest fund, is used as an example to illustrate product-based and conduct-based exclusions in practice.


2021 ◽  
Vol 12 (1) ◽  
pp. 112-123
Author(s):  
Nadia Latiff ◽  
Ferina Marimuthu

Globally, water resource management has emerged as an important research area and is acknowledged as a crucial factor in achieving sustainable development goals. Despite its significance, water-related sustainability disclosures regarding water and water-related risks among companies are alarmingly weak. Many companies are not effectively measuring, managing, and disclosing their water-related risks. Hence, this paper aims to analyze water-related reporting and disclosure requirements of a sample of ten South African mining and non-mining companies with a high water profile, listed on the JSE Socially Responsible Investment Index. The companies’ level of compliance on water disclosure was assessed based on their reporting in the integrated and or annual reports. The findings revealed that sampled five mining companies performed poorly in terms of disclosure across the frameworks of awareness, disclosure, management, and leadership. On the other hand, the selection of five non-mining companies grasped the severe effect of the water crisis on their businesses and performed better in all the framework categories. The average score for the selection of mining companies was 65% compared to the 93% for the non-mining companies. Stakeholders need to focus on water governance processes that require improvement to enable the stakeholders to make better decisions on water management; subsequently, this is an area that needs to be addressed in future research.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yann Ferrat ◽  
Frédéric Daty ◽  
Radu Burlacu

PurposeThe growth of socially responsible assets has been exponential over the last decade, they now account for almost a third of professional investments. As the growth persists, faith and conviction investors reshape the equity markets. To fully comprehend the impact of socially conscious participants on security returns, this paper attempts to provide insights on how responsible investment growth has impacted the returns of sustainable stocks. The examination is split by investment horizon to account for short and long effects.Design/methodology/approachUsing an exclusive dataset of non-financial ratings, provided by MSCI ESG research, the authors examine the cross-sectional returns of US and European sustainability-leading and lagging corporations between 2007 and 2019. Panel models robust to country, firm-year and industry effects were then employed to examine the impact of responsible investment growth on future stock returns.FindingsThe authors find evidence that the impact of responsible investment growth is dual contingent upon the timeframe considered. In the short run, sustainability-leading and lagging firms display similar stock returns. However, the spread in returns is negative over long horizons and increasing over time.Originality/valueThe examination performed in this study highlights the significant effect of responsible investment growth on future stock returns. Overall, the authors’ findings are consistent with the price pressure hypothesis in the short run and the cost of capital alteration over longer horizons.


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