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Global systemic risks of climate change, overindebtedness in the aftermath of the 2008/2009 World Financial Crisis and the need for pension reform in the wake of an aging western world population, currently raise attention for intergenerational fairness. Pressing social dilemmas beyond the control of singular nation states call for corporate social activities to back governmental regulation in crisis mitigation. The purpose of this paper is to promote the idea of intergenerational equity in the corporate world.

Theoretical description.

In the given literature on global responsible leadership in the corporate sector and contemporary corporate social responsibility (CSR) models, intergenerational equity appears to have been neglected. While the notion of sustainability has been integrated in CSR models, intergenerational equity has hardly been touched on as for being a more legal case for codifying the triple bottom line.

Advocating for integrating intergenerational equity concerns in CSR models in academia and practice holds untapped advantages of economically influential corporate entities, corporate adaptability and independence from voting cycles.

Integrating a temporal dimension in contemporary CSR helps imbuing a longer-term perspective into the corporate world alongside advancing tax ethics and global governance crises prevention.

Future research avenues comprise of investigating situational factors influencing intergenerational leadership in the international arena in order to advance the idea of corporations tackling the most pressing contemporary challenges of mankind.

Climate control needs have reached momentum. While scientists call for stabilizing climate and regulators structure climate change mitigation and adaptation efforts around the globe, economists are concerned with finding proper and fair financing mechanisms. In an overlapping-generations framework, Sachs (2014) solves the climate change predicament that seems to pit today’s against future generations. Sachs (2014) proposes that the current generation mitigates climate change financed through bonds to remain financially as well-off as without mitigation while improving environmental well-being of future generations through ensured climate stability. This intergenerational tax-and-transfer policy turns climate change mitigation into a Pareto improving strategy. Sachs’ (2014) discrete model is integrated in contemporary growth and resource theories. The following article analyzes how climate bonds can be phased-in, in a model for a socially optimal solution and a laissez-faire economy. Optimal trajectories are derived partially analytically (e.g., by using the Pontryagin maximum principle to define the optimal equilibrium), partially data driven (e.g., by the use of modern big market data), and partially by using novel cutting-edge methods – for example, nonlinear model predictive control (NMPC), which solves complex dynamic optimization problems with different nonlinearities for infinite and finite decision horizons. NMPC will be programed with terminal condition in order to determine appropriate numeric solutions converging to some optimal equilibria. The analysis tests if the climate change debt adjusted growth model stays within the bounds of a sustainable fiscal policy by employing NMPC, which solves complex dynamic systems with different nonlinearities.

The 2008/2009 World Financial Crisis underlined the importance of social responsibility for the sustainable functioning of economic markets. Heralding an age of novel heterodox economic thinking, the call for integrating social facets into mainstream economic models has reached unprecedented momentum. Financial Social Responsibility bridges the finance world with society in socially conscientious investments. Socially Responsible Investment (SRI) integrates corporate social responsibility in investment choices. In the aftermath of the 2008/2009 World Financial Crisis, SRI is an idea whose time has come. Socially conscientious asset allocation styles add to expected yield and volatility of securities social, environmental, and institutional considerations. In screenings, shareholder advocacy, community investing, social venture capital funding and political divestiture, socially conscientious investors hone their interest to align financial profit maximization strategies with social concerns. In a long history of classic finance theory having blacked out moral and ethical considerations of investment decision making, our knowledge of socio-economic motives for SRI is limited. Apart from economic profitability calculus and strategic leadership advantages, this paper sheds light on socio-psychological motives underlying SRI. Altruism, need for innovation and entrepreneurial zest alongside utility derived from social status enhancement prospects and transparency may steer investors’ social conscientiousness. Self-enhancement and social expression of future-oriented SRI options may supplement profit maximization goals. Theoretically introducing potential SRI motives serves as a first step toward an empirical validation of Financial Social Responsibility to improve the interplay of financial markets and the real economy. The pursuit of crisis-robust and sustainable financial markets through strengthened Financial Social Responsibility targets at creating lasting societal value for this generation and the following.