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Special Issue "Sustainable and Responsible Investing"

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (15 January 2022) | Viewed by 8872

Special Issue Editors

Prof. Dr. Leonardo Becchetti
E-Mail Website
Guest Editor
Department of Economics and Finance Faculty of Economics; Tor Vergata University of Rome, Roma, Italy
Interests: corporate social responsibility; ethical and sustainable finance; microfinance; behavioral economics; wellbeing
Special Issues, Collections and Topics in MDPI journals
Prof. Dr. Rocco Ciciretti
E-Mail Website
Guest Editor
Department of Economics and Finance, and CEIS; Tor Vergata University of Rome, Roma, Italy
Interests: analysts’ forecasts; event study; corporate finance; corporate social responsibility; social responsible investment; investment funds; household and banking
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

Socially and environmentally responsible investing is becoming the benchmark in financial markets for several reasons. First, due to the emergence of climate change and global warming, and the lack of a global benevolent planner enforcing a system of emission caps across sovereign countries, corporations are increasingly asked by the public opinion and, consequently, investors to take responsibility for internalizing the environmental externalities of their activities. Second, recent research has identified exposure to ESG (environment, social, governance) risk as an independent risk factor to which financial assets are exposed. Conflicts with stakeholders, civil society, and expectations of future more severe regulation contribute to increase the importance of this risk factor. Within this frame, this Special Issue aims to deal with frontier research paths related to: i) progress in indicators measuring CSR and exposure to ESG factors and their effect on financial variables and performance; ii) the role of media coverage and communication versus expert-based evaluation in ESG risk and CSR measures; iii) the development of the market for green bonds; iv) responsible investing and the circular economy revolution; v) the (voluntary and regulatory) evolution of non-financial reporting and its consequences for CSR and financial asset dynamics.

Prof. Dr. Leonardo Becchetti
Prof. Dr. Rocco Ciciretti
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2000 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • responsible investing
  • green bonds
  • circular economy and finance
  • non-financial reporting
  • ESG risk factor
  • CSR indicators and media coverage

Published Papers (8 papers)

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Research

Article
Mitigating Contagion Risk by ESG Investing
Sustainability 2022, 14(7), 3805; https://doi.org/10.3390/su14073805 - 23 Mar 2022
Viewed by 718
Abstract
We study whether ESG investing may mitigate the risk of contagion among equity mutual funds. More precisely, we measure the impact of fire-sale spillover, propagating throughout the financial system, on funds ranked on ESG aspects. We compare the relative loss of capitalization experienced [...] Read more.
We study whether ESG investing may mitigate the risk of contagion among equity mutual funds. More precisely, we measure the impact of fire-sale spillover, propagating throughout the financial system, on funds ranked on ESG aspects. We compare the relative loss of capitalization experienced by high- and low-ranked funds. Contagion, which is indirect since funds are not exposed to counterparty risk, is modeled using a network structure. In cases of deleveraging from funds, fire-sale spillover propagates throughout the network because of common asset holdings among funds. We find that funds’ vulnerability to contagion decreases when the level of ESG compliance increases. Moreover, the average relative loss is lower for the high-ranked funds than for the low-ranked ones. The small-size funds mainly drive the result. Our findings indicate that contagion is less effective for high-ranked funds. From a macroeconomic perspective, ESG investing represents a new opportunity for diversification that makes the system more resilient to contagion. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
How Does the Sustainable Investment Climate Affect Firm Geographic Diversification in China? Managerial Discretion as a Mediator
Sustainability 2022, 14(5), 2764; https://doi.org/10.3390/su14052764 - 26 Feb 2022
Viewed by 459
Abstract
Although existing research has explored the main effects of the sustainable investment climate, including political and legal environments, on the performance of firms’ geographic diversification, most studies neglect the role of strategic leadership, especially the CEO. The concept of managerial discretion provides a [...] Read more.
Although existing research has explored the main effects of the sustainable investment climate, including political and legal environments, on the performance of firms’ geographic diversification, most studies neglect the role of strategic leadership, especially the CEO. The concept of managerial discretion provides a theoretical lens to fill this void. Using a large database from the Investment Climate Survey conducted by The World Bank, which covers 12,400 firms from 120 cities among China’s 30 provinces, we empirically prove that the investment climate, including governmental, legal, and financial environments, significantly influence the degree of CEO managerial discretion. Moreover, CEO managerial discretion is positively associated with firm geographic diversification and mediates the relationship between the investment climate and firm geographic diversification. Specifically, the greater the CEO managerial discretion, the lower degree of firm investment within the city and the province in which it is headquartered and the higher level of the firm’s internationalization. Implications for firms’ geographic diversification and constructing a sustainable investment climate for emerging markets are finally given. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
Social Capital and Loan Cost: The Role of Interpersonal Trust
Sustainability 2022, 14(3), 1238; https://doi.org/10.3390/su14031238 - 22 Jan 2022
Cited by 2 | Viewed by 427
Abstract
We argue that social dilemmas structured as investment trust games are a dominant feature in social and economic life due to asymmetric information, incomplete contracts and non-overlapping competencies that are typical characteristics of business relationships. We therefore consider that borrowers living in geographical [...] Read more.
We argue that social dilemmas structured as investment trust games are a dominant feature in social and economic life due to asymmetric information, incomplete contracts and non-overlapping competencies that are typical characteristics of business relationships. We therefore consider that borrowers living in geographical areas with higher interpersonal trust are more likely to overcome the coordination failures typical of this kind of social dilemmas, thereby creating higher economic value and reducing the risk of their economic activity. Our empirical findings support this hypothesis, showing that lenders charge significantly lower loan costs on borrowers living in areas characterized by higher interpersonal trust. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
Sustainable Finance and COVID-19: The Reaction of ESG Funds to the 2020 Crisis
Sustainability 2021, 13(23), 13253; https://doi.org/10.3390/su132313253 - 30 Nov 2021
Cited by 2 | Viewed by 1212
Abstract
We investigated the financial performance of a sample of sustainable investment funds in terms of returns, volatility, and contagion risk during the financial crisis caused by the COVID-19 pandemic. In order to conduct a more reliable analysis, we considered a homogenous sample composed [...] Read more.
We investigated the financial performance of a sample of sustainable investment funds in terms of returns, volatility, and contagion risk during the financial crisis caused by the COVID-19 pandemic. In order to conduct a more reliable analysis, we considered a homogenous sample composed of 30 funds declaring the same benchmark (the MSCI Europe index). The Morningstar Sustainability ESG rating was used to determine the level of sustainability of each fund. Both the GARCH models and the event study suggest that funds with a higher ESG rating were able to outperform other funds during the COVID-19 period. These funds had a greater level of resilience and exhibited a lower level of risk contagion during the pandemic. These instruments appear to assume the role of risk protection and should be considered a means of both promoting sustainable growth and minimizing portfolio risk. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
Current State and Development of Green Bonds Market in the Latin America and the Caribbean
Sustainability 2021, 13(19), 10872; https://doi.org/10.3390/su131910872 - 30 Sep 2021
Cited by 3 | Viewed by 1056
Abstract
The green bonds market has had a growth in recent years within its different sectors and regions. Specifically, up to 2020, the Latin America and the Caribbean (LAC) region has issued USD 26 billion. Some authors have studied the factors influencing financing through [...] Read more.
The green bonds market has had a growth in recent years within its different sectors and regions. Specifically, up to 2020, the Latin America and the Caribbean (LAC) region has issued USD 26 billion. Some authors have studied the factors influencing financing through green bonds. However, a research gap is identified in the analysis of the regions that contribute to the issuance of this type of bond, specifically for LAC. This is the first study to examine the variables such as issue amount, number and type of issuers, currency, and maturity data in the region using a dataset of issuing performed between 2014–2020. We find the typical sizes of the issues, the search for a premium in the issue, the perception of complexity, the issuance of guides, and tax incentives as the main factors affecting this market. Finally, the study presents the potential for further research. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
Mapping and Clustering Analysis on Environmental, Social and Governance Field a Bibliometric Analysis Using Scopus
Sustainability 2021, 13(13), 7304; https://doi.org/10.3390/su13137304 - 29 Jun 2021
Cited by 13 | Viewed by 1586
Abstract
Academic interest in ESG has grown significantly in recent years. Nevertheless, bibliometric and visualization research on this topic is still insufficient. This study aims to conduct publication metrics on the literature connected with ESG and attempt to give a research agenda for future [...] Read more.
Academic interest in ESG has grown significantly in recent years. Nevertheless, bibliometric and visualization research on this topic is still insufficient. This study aims to conduct publication metrics on the literature connected with ESG and attempt to give a research agenda for future research. In this study, we used data from the Scopus database. Various bibliometric techniques, such as bibliographic coupling and co-occurrence analysis, were combined with assorted themes to present an overview. To the best of our knowledge, there is no study that analyses the bibliographic data on ESG fields; this study is a unique contribution to the literature. This study also provides an overview of the trends and trajectories with a visual and schematic frame for the research of this topic. This may help researchers understand the current trends and future research directions, and enable future authors to conduct their studies more effectively. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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Article
Companies’ Sustainable Growth, Accounting Quality, and Investments Performances. The Case of the Romanian Capital Market
Sustainability 2020, 12(22), 9748; https://doi.org/10.3390/su12229748 - 23 Nov 2020
Viewed by 960
Abstract
The paper analyzes the influence of sustainable growth (SGR) as a reflection of the manner of strategic business organization, particularly in the quality of reported financial information (magnitude of discretionary accruals—DAC) as an expression of the ethical attitude adopted [...] Read more.
The paper analyzes the influence of sustainable growth (SGR) as a reflection of the manner of strategic business organization, particularly in the quality of reported financial information (magnitude of discretionary accruals—DAC) as an expression of the ethical attitude adopted by companies in the entity–investor relationship, on the investors’ decisions, substantiated in the performance level of the shares held. Using models consecrated in the literature, the results reflect a significant influence, both in the case of separate testing of the two factors (SGR and DAC), and in the case of the conjugated action thereof, on investment performance. The relations were also tested by introducing certain control variables into the analysis, such as: the intangible ratio, quick ratio, company size, as well as the SGR sensitivity function of the level of information quality. In the case of financial information quality, specific indicators from the two consecrated value relevance testing models by Ohlson (1995) and Easton and Harris (1991) were used as control variables. The obtained results are robust, preserving the sense and intensity of the influences. However, in the case of testing for the influence of information quality on share price, it was noticed an insignificant relation, associated with the situation in which, to execute some speculative transactions, investors particularly interpreted conjunctural factors. The study contributes to the development of the specialty literature by highlighting the role of internal growth and information quality as determinant factors in the investors’ analyses, while also offering a potentially practical tool for assessing the opportunity of making placements in the capital of companies. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
Article
Sensitivity Analysis as a Tool in Environmental Policy for Sustainability: The Case of Waste Recycling Projects in the Republic of Serbia
Sustainability 2020, 12(19), 7995; https://doi.org/10.3390/su12197995 - 27 Sep 2020
Cited by 5 | Viewed by 1497
Abstract
Modern consumer society uses an increasing number of products to meet its needs, which become waste after use, thus posing a serious problem that threatens sustainable development. Investment in waste recycling, due to a high level of non-financial benefits, is considered sustainable, especially [...] Read more.
Modern consumer society uses an increasing number of products to meet its needs, which become waste after use, thus posing a serious problem that threatens sustainable development. Investment in waste recycling, due to a high level of non-financial benefits, is considered sustainable, especially in the End-of-life Vehicles (ELV) and Waste Electrical and Electronic Equipment (WEEE) recycling areas. The research objective of this paper is to test the sensitivity of the model for sustainable management of recycling projects by applying a cost-benefit analysis (CBA) to investment projects of car and refrigerator recycling in the Republic of Serbia. By testing the key risk factors of the above investment projects within the sensitivity analysis, the main aim is to determine the critical value of these variables in terms of the financial and social acceptability of these investment alternatives. The results obtained indicate that state subsidies have the greatest influence on defining the model of sustainable investment, especially in the field of e-waste recycling. The impact of other factors, the price of secondary raw materials and the social cost of CO2 emissions, is significantly smaller, but should certainly be taken into account when defining the optimal model of sustainable investment. Full article
(This article belongs to the Special Issue Sustainable and Responsible Investing)
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