Sarah Louise Carroux, Timo Busch and Falko Paetzold
This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.
Abstract
Purpose
This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.
Design/methodology/approach
Data was collected from members of a global impact investor network, using an online questionnaire, a portfolio-data collection tool and semi-structured interviews.
Findings
Wealthy private impact investors are largely similar in terms of their general characteristics and investment behavior, but they diverge in their interest in specific Sustainable Development Goals (SDGs). They tend to be strongly values-driven and to adopt an investment time horizon of 7+ years for their impact investments, which they expect to yield financial returns that are no different from those of traditional investments. Interestingly, these investors perceive the well-established sustainable investing strategies of exclusion, environmental, social and governance (ESG) integration and best-in-class as not having high impact-generating potential.
Practical implications
Suggestions are provided about how wealthy private investors could use the findings to improve their impact investment decisions. Advice is offered to investment professionals on how to optimize impact investment products and services for this economically and societally highly relevant target group.
Originality/value
To the best of the authors’ knowledge, this is the first scientific study to investigate the general characteristics and investment behavior of HNWIs who pursue impact investing. HNWIs have great relevance for financial markets yet they are out of reach for most researchers. As a result, they are poorly understood, and apparently also often misunderstood, which has substantial economic and social implications that this paper helps mitigate.
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Edeltraud Guenther, Timo Busch, Jan Endrikat, Thomas Guenther and Marc Orlitzky
The purpose of this literature review is to reorient empirical research on the causal links between corporate ecological sustainability (CES) and corporate financial performance…
Abstract
The purpose of this literature review is to reorient empirical research on the causal links between corporate ecological sustainability (CES) and corporate financial performance (CFP). Toward this end, we summarize the findings of four meta-analyses (conducted between 2012 and 2016), which indicate that there is, on average, a small positive association between CES and CFP. In addition, these empirical associations seem to be contingent on the firm’s strategic approach with regard to ecological sustainability (e.g., proactive vs reactive approach) and on the operationalization of both constructs. We conclude that future research may benefit from an even more explicit, analytic shift to the circumstances under which it pays for firms to go green. The main research limitations we point out are model misspecifications, endogeneity, and problems in the measurement of both CES and CFP.
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Falko Paetzold, Timo Busch and Marc Chesney
Investment advisors play a significant role in financial markets, yet the determinants of their behavior have not been explored in detail. The purpose of this paper is to explore…
Abstract
Purpose
Investment advisors play a significant role in financial markets, yet the determinants of their behavior have not been explored in detail. The purpose of this paper is to explore the determinants of how actively advisors communicate about sustainable investing with their clients, and differences in the preferences of advisors compared to investors.
Design/methodology/approach
Based on a survey with 296 retail and private banking investment advisors, this study employs an ordinary least squares regression model to explore the determinants of advisors activity in communicating about sustainable investing (SI) with their clients, differences in the aspects that matter to advisors and investors, and the role of the complexity of sustainability.
Findings
Advisors activity in communicating about SI relates to their expectation of SI regarding financial return, real-world impact, and the fuzziness and trustworthiness of SI. Advisors appear not to be influenced by expected risk and their personal values, which runs against prior research findings and the interest of investors.
Research limitations/implications
Future research should assess cultural differences and explore asymmetries between advisors and investors in regard to the role of volatility, values, impact measurement, and complexity.
Practical implications
Investment advisors underweighting aspects related to risk and self-transcendent values relative to their clients might limit the suitability of clients ' portfolios, skew capital allocation, and depress the role of SI in financial markets. Generalized to salespeople this behavior might depress the market success of products related to sustainability at large.
Social implications
The findings and their generalization indicate that salespeople might systematically deviate from their clients’ interests in regard to social responsibility. Advisors and salespeople in their mediating role might be an important barrier to sustainable development.
Originality/value
This is the first quantitative study that explores the decision-making by investment advisors in the context of SI, and as such answers to specific calls in literature to explore the micro-foundations of decision making in regard to SI and social responsibility, and on the relationship between private investors and investment advisors. This study is based on unique and original empirical data on advisors that work with retail and wealthy private investors.
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Mehwish Bhatti, Saba Shaikh and Nazish Baladi
The main objective of this chapter is to figure out various challenges emerging, or transition economies face in fostering sustainable finance. In this regard, extensive review of…
Abstract
The main objective of this chapter is to figure out various challenges emerging, or transition economies face in fostering sustainable finance. In this regard, extensive review of the extant and relevant literature is conducted with specification of time range, online database, and keywords. The findings suggest the various financing barriers experienced by emerging and transition economies in implementing the sustainable development goals (SDGs). Furthermore, this chapter triggers further debate on green financing initiatives that can help in dealing with the challenges of sustainable finance. It is found that green financing initiatives offer significant solutions in emerging and transition economies. In addition, this chapter provides policy implications to academia, practitioners, financial institutions, and government agencies to promote sustainable finance.
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This study aims to highlight the key aspects of sustainable finance using bibliometric analysis of the relevant literature extracted from two separate databases, Scopus and…
Abstract
Purpose
This study aims to highlight the key aspects of sustainable finance using bibliometric analysis of the relevant literature extracted from two separate databases, Scopus and Dimensions.ai. The present study contributes towards the achievement of sustainable development by providing directions to align financial decision-making with different sustainability aspects.
Design/methodology/approach
The author conducted bibliometric analysis for 1,220 articles from Scopus and 1,437 publications from Dimensions.ai. The most frequently occurring terms in sustainable finance research are explored and visualised using the VOSviewer.
Findings
Bibliometric findings revealed a dynamic evolution of research focus over time. The social component dominated from 2012 to 2016, however a shift to environmental and climate change considerations is noticed from 2016 to 2020. Recent studies (2020–2022) exhibited heightened attention to green finance and renewable energy. Overlay visualisations highlighted similar trends in both databases, indicating a contemporary emphasis on green finance.
Research limitations/implications
This study enriches theoretical discourse by mapping the trajectory of sustainable finance research, contributing to a deeper understanding of its evolution.
Practical implications
Insights from this study guide researchers and practitioners in identifying trends, that can help the integration of green finance principles into corporate strategies.
Social implications
Findings also raise awareness among stakeholders, and help facilitate socially responsible corporate cultures and informed policymaking.
Originality/value
The originality of this study lies in its comprehensive bibliometric analysis of sustainable finance research in management studies, drawing data from two major databases and spanning over three decades.
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Matthew Phillip Johnson, Jakob Strobel and Gregory Trencher
To achieve net-zero by mid-century consistent with the Paris Agreement, companies must urgently formulate and implement decarbonization actions. While previous research has…
Abstract
Purpose
To achieve net-zero by mid-century consistent with the Paris Agreement, companies must urgently formulate and implement decarbonization actions. While previous research has categorized numerous carbon management and carbon accounting actions, these domains have often been studied in isolation. We classify carbon management actions into four categories (inaction, ineffective, supportive and effective) and connect them to carbon accounting actions in a subsequent step, revealing four archetypical patterns of corporate decarbonization responses. The primary aim of this empirical study is to comprehensively assess how companies implement carbon management and carbon accounting actions in parallel and build an understanding of the various factors affecting each other, and how these domains affect carbon performance altogether.
Design/methodology/approach
This study adopted a maximum diverse sampling approach to assess carbon management actions in 22 international companies and link them to carbon accounting actions. Data sources included interviews with sustainability managers, field notes from a joint meeting and sustainability reports. The heterogeneous sample aimed for maximum diversity, covering various sectors and headquarters locations, yet all companies have communicated a commitment to reducing carbon emissions. A qualitative content analysis was used to find connections between carbon management actions and carbon accounting actions, resulting in four archetypical patterns.
Findings
The study identifies a range of carbon management actions, from inaction to effective action, and corresponding carbon accounting actions for monitoring, disclosure, and internal information use. Effective carbon management actions correlate with comprehensive carbon accounting actions, while ineffective management shows limited use of these actions. Based on these findings, we examine links between carbon management and carbon accounting and identify four archetypical patterns of corporate decarbonization responses.
Originality/value
This study examines the interconnectedness of carbon management and carbon accounting, identifying archetypical patterns that explain their effectiveness in reducing corporate carbon emissions. It provides a framework for analyzing companies’ carbon management and highlights the essential role of carbon accounting in monitoring, disclosing and internal data use. Said framework and conclusions can guide future research and management.
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Umesh Kumar Bamel, Santosh Rangnekar, Peter Stokes and Renu Rastogi
Research on organizational climate has shown a significant upward trend in the recent past. The purpose of the present study is to propose a conceptual model that empirically…
Abstract
Purpose
Research on organizational climate has shown a significant upward trend in the recent past. The purpose of the present study is to propose a conceptual model that empirically examines the relationship of dimensions of organizational climate with managerial effectiveness in Indian organizations.
Design/methodology/approach
A data set of 245 managers/executives was collected from Indian organizations through a survey instrument. The collected responses were subsequently tested by using structural equation modeling (SEM). Further, the hypothesized model was tested by employing five stages of hierarchical multiple regressions.
Findings
The findings suggest that organizational climate dimensions, i.e. organizational process, altruistic behaviour, role clarity and communication, results‐rewards orientation and certain aspects of interpersonal relationships play a significant role in increasing managerial effectiveness.
Research limitations/implications
The results indicate ways in which organizations might develop supportive climates in order to reinforce effectiveness of the organizational members.
Originality/value
The role of organizational climate in employee effectiveness is currently under‐researched in the Indian context. The present study is an earnest effort in this direction to analyse the link between organizational climate and managerial effectiveness.