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Accelerating the Transition Towards Sustainable Investing - Strategic Options for Investors, Corporations, and Other Key Stakeholders

World Economic Forum Paper

44 Pages Posted: 21 Jul 2011  

Bernd Jan Sikken

Duisenberg School of Finance; World Economic Forum

Date Written: July 21, 2011

Abstract

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

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

Bernd Jan Sikken (Contact Author)

Duisenberg School of Finance ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

World Economic Forum ( email )

Geneva
Switzerland

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