Sustainable development and financial markets: old paths and new avenues
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(Published version)
Date
2016
Authors
Busch, T.
Bauer, R.
Orlitzky, M.
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Journal article
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Business and Society, 2016; 55(3):303-329
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Abstract
This article explores the role of financial markets for sustainable development.More specifically, the authors ask to what extent financial markets fosterand facilitate more sustainable business practices. The authors highlight thattheir current role is rather modest and conclude that, on the old paths,a paradoxical situation exists. On one hand, financial market participantsincreasingly integrate environmental, social, and governance (ESG) criteriainto their investment decisions, whereas on the other hand, in terms oforganizational reality, there seems to be no real shift toward more sustainablebusiness practices. The authors identify two main challenges within the fieldof sustainable investments that are relevant for entering new avenues thatmay help overcome this situation. First, a reorientation toward a long-termparadigm for sustainable investments is important. Second, ESG data mustbecome more trustworthy. From a theoretical point of view, the authorsfinally highlight the potential market consequences when ESG investmentcriteria are used.
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Copyright 2015 The Authors
Access Condition Notes: postprint is available open access