Sustainable finance refers to the integration of environmental, social, and governance (or ESG) considerations in processes of financial decision-making. It includes a number of strategies and financial instruments, such as green bonds, screening, impact investing, socially responsible investing, and so on. Over the past few decades, sustainable finance has evolved from a strategy employed by ethical investors (such as religious institutions) to screen “bad” companies (arms, alcohol, and tobacco manufacturers; casinos; etc.) from their portfolios to an increasingly central part of banks’ and other financial institutions’ risk management strategies. Over the next few years, scholars and practitioners expect sustainable finance to evolve even further, becoming a strategy for investors to actively pursue new opportunities that traditional financial analyses fail to reveal or accurately value. In that sense, sustainable finance has evolved alongside corporate sustainability, shifting from a values-based focus on social responsibility to a more explicitly financial focus on long-term, strategic growth. For the purposes of this essay, sustainable finance refers to a number of trends, including impact investing, socially responsible investing, financing for sustainable development, and so on. Early analyses of sustainable finance were focused on establishing correlation between the integration of social and environmental concerns in investment decisions and the performance of those investments. More recent analyses have started trying to understand the causal relationships between impacts and investments, and between social-environmental performance and financial performance. The role of financial institutions like mutual funds and insurance companies in mitigating climate change and promoting sustainable development has become an important topic for practitioners and policymakers, as well as for academics interested in sustainable development, corporate sustainability, and a range of other issues. However, sustainable finance has remained more or less marginal within mainstream academic finance, owing in part to the idea that it does not offer anything theoretically new to study. And yet, as a number of scholars have shown, sustainable finance offers a novel lens through which to study emergent forms of risk and their interaction with each other, as well as more classic theoretical problems such as governance, performativity, and valuation. Because this is an emerging and rapidly evolving field, many of the works cited are relatively recent. A growing contingent of critical scholars, especially in economic geography and political ecology, has also formed around the notion of natural capital and the valorization/financialization of nature it engenders.
There are a number of edited volumes and some books that attempt to chart the emerging landscape of sustainable finance. Lehner 2016 offers a comprehensive overview of social and sustainable finance, while Paranque and Pérez 2016 provides a more critical take. Jeucken 2010 and Krosinsky and Purdom 2016 focus more on the practitioner perspective while remaining engaged with academic debates. Stewart, et al. 2009 was an early treatment of the relationship between finance and sustainable development.
Jeucken, Marcel. 2010. Sustainable finance and banking: The financial sector and the future of the planet. Boca Raton, FL: Routledge.
Accessible text written by a prominent practitioner with a lot of experience in responsible investing with both pension funds and private banks. The book presents a discussion of sustainability from the perspective of multiple kinds of organizations, as well as a number of case studies.
Krosinsky, Cary, and Sophie Purdom, eds. 2016. Sustainable investing: Revolutions in theory and practice. London: Taylor & Francis.
A concise introduction to current trends in sustainable investing, with short, mostly jargon-free essays by academics, practitioners, and a few undergraduate students on topics ranging from climate-smart landscapes to infrastructure to emissions reductions to investment strategies.
Lehner, Othmar M. 2016. Routledge handbook of social and sustainable finance. London: Routledge.
An indispensable volume that charts the landscape of sustainable finance from multiple disciplinary and theoretical perspectives, and a necessary resource for researchers.
Paranque, Bernard, and Roland Pérez, eds. 2016. Finance reconsidered: New perspectives for a responsible and sustainable finance. Bingley, UK: Emerald Group.
A theoretically focused collection of essays by leading (critical) scholars of socially responsible investing and sustainable finance. It deals especially with academic finance and its (in)ability to critically assess sustainability and responsibility. The volume attempts to reimagine finance as a “commons.”
Stewart, Richard B., Benedict Kingsbury, and Bryce Rudyk, eds. 2009. Climate finance: Regulatory and funding strategies for climate change and global development. New York: New York Univ. Press.
A collection of essays with a focus on the role of financial institutions (and the regulation of those institutions) in sustainable development. This was an early treatment of the subject by leading scholars.
- Acid Deposition
- Agricultural Land Abandonment
- Agrochemical Pollutants
- Agroforestry Systems
- Agroforestry: The North American Perspective
- Applied Fluvial Ecohydraulic
- Arid Environments
- Arsenic Contamination in South and Southeast Asia
- Beavers as Agents of Landscape Change
- Berry, Wendell
- Burroughs, John
- Bush Encroachment
- Carbon Dynamics
- Carson, Rachel
- Case Studies in Groundwater Contaminant Fate and Transport
- Citizen Science
- Climate Change and Conflict in Northern Africa
- Common Pool Resources
- Contaminant Dispersal in the Environment
- Coral Reefs and Coral Bleaching
- Deforestation in Brazilian Amazonia
- Desert Dust in the Atmosphere
- Determinism, Environmental
- Ecological Integrity
- Economic Valuation Methods for Non-market Goods or Service...
- Economics, Environmental
- Economics of International Environmental Agreements
- Economics of Water Management
- Effects of Land Use
- Endocrine Disruptors
- Endocrinology, Environmental
- Engineering, Environmental
- Environmental Assessment
- Environmental Flows
- Environmental Health
- Environmental Law
- Environmental Sociology
- Ethics, Animal
- Ethics, Environmental
- European Union and Environmental Policy, The
- Extreme Weather and Climate
- Feedback Dynamics
- Fisheries, Economics of
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- Forest Transition
- Geodiversity and Geoconservation
- Geology, Environmental
- Global Phosphorus Dynamics
- Hazardous Waste
- Henry David Thoreau
- Historical Changes in European Rivers
- Historical Land Uses and Their Changes in the European Alp...
- Historical Range of Variability
- History, Environmental
- Human Impact on Historical Fluvial Sediment Dynamics in Eu...
- Humid Tropical Environments
- Hydraulic Fracturing
- India and the Environment
- Industrial Contamination, Case Studies in
- Integrated Assessment Models (IAMs) for Climate Change
- International Land Grabbing
- Karst Caves
- Key Figures: North American Environmental Scientist Activi...
- Lakes: A Guide to the Scientific Literature
- Land Use, Land Cover and Land Management Change
- Landscape Architecture and Environmental Planning
- Large Wood in Rivers
- Legacy Effects
- Lidar in Environmental Science, Use of
- Management, Australia's Environment
- Marine Mining
- Marine Protected Areas
- Mediterranean Environments
- Mountain Environments
- Muir, John
- Multiple Stable States and Regime Shifts
- Natural Fluvial Ecohydraulics
- Nitrogen Cycle, Human Manipulation of the Global
- Non-Renewable Resource Depletion and Use
- Olmsted, Frederick Law
- Periglacial Environments
- Physics, Environmental
- Psychology, Environmental
- Remote Sensing
- Riparian Zone
- River Pollution
- Rivers and Their Cultural Values: Assessing Cultural Water...
- Rivers, Effects of Dams on
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- Sea Level Rise
- Secondary Forests in Tropical Environments
- Security, Energy
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- Sediment Budgets and Sediment Delivery Ratios in River Sys...
- Sediment Regime and River Morphodynamics
- Semiarid Environments
- Soil Salinization
- Soils as an Environmental System
- Spatial Statistics
- Stream Mitigation Banking
- Sustainable Finance
- Sustainable Forestry, Economics of
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- The Key Role of Energy in Economic Growth
- Thresholds and Tipping Points
- Treaties, Environmental
- Tropical Southeast Asia
- Use of GIS in Environmental Science
- Water Availability
- Water Quality in Freshwater Bodies
- Water Quality Metrics
- Water Resources and Climate Change
- Water, Virtual
- White, Gilbert Fowler
- Wildfire as a Catalyst
- Zone, Critical