World Economic Forum Paper
44 Pages Posted: 21 Jul 2011
Date Written: July 21, 2011
What are key pathways for investors, corporations, and other key stakeholders in the investment value chain to accelerate the transition towards sustainable investing?
Sustainable investing is defined as an investment approach that integrates long-term environmental, social, and governance (ESG) criteria into investment and ownership decision-making with the objective of generating superior risk-adjusted financial returns. These extra-financial criteria are used alongside traditional financial criteria such as cash flow and price-to-earnings ratios.
This paper explores both the key barriers to sustainable investing (at investor, corporate, system-wide level) as well as the strategic options to overcome those barriers. Strategic options have been defined in four categories: A. improve information, B. strengthen competencies, C. modify incentives, D. enhance governance.
Keywords: sustainable investing, responsible investing, sustainable value creation, ESG
JEL Classification: G00
Suggested Citation: Suggested Citation
Sikken, Bernd Jan, Accelerating the Transition Towards Sustainable Investing - Strategic Options for Investors, Corporations, and Other Key Stakeholders (July 21, 2011). World Economic Forum Paper. Available at SSRN: https://ssrn.com/abstract=1891834 or http://dx.doi.org/10.2139/ssrn.1891834
By Roger Urwin