Sustainable Investment

O’Sullivan, Niamh

Abstract

Sustainable investment, more widely currently known as “responsible investment”, refers to the integration of sustainability issues— otherwise known as environmental, social and governance (ESG) issues in the investment community— into core investment practice. Institutional investors, which include asset owners and asset managers, are, like commercial banks, catalyzed to consider ESG issues from a risk management perspective. This is because investments in companies that demonstrate negative environmental and social performance— and are considered poorly governed companies as a result (hence “ES and G”)— are deemed to pose significant “material” (financial) risk to investors. Likewise, institutional investors are recognised as having tremendous leverage, and a corporate responsibility, to influence improved investee company ESG behaviour and performance in order to minimize or avoid these risks to them, as well as to the broader society, economy and environment. By integrating ESG factors into their investment decision-making processes, institutional investors are seeking to improve their risk-adjusted returns and to optimize the value of their investment portfolios for the long term.

Citation

O’Sullivan, N. (2024). Sustainable Investment. In L. Matthews, L. Bianchi, & C. Ingram (Eds.), Concise Encyclopedia of Corporate Social Responsibility (207-214). Edward Elgar Publishing. https://doi.org/10.4337/9781800880344.ch39

• Online Publication Date: Jan 28, 2024
• Publication Date: Jan 28, 2024
• Deposit Date: Oct 16, 2024
• Publisher: Edward Elgar Publishing
• Peer Reviewed: Peer Reviewed
• Pages: 207-214
• Book Title: Concise Encyclopedia of Corporate Social Responsibility
• Chapter Number: 39
• ISBN: 9781800880337
• DOI: https://doi.org/10.4337/9781800880344.ch39
• Keywords: Corporate Social Responsibility; Sustainable Investment; Responsible Investment; Environmental; Social and Governance; Risk Management; ESG Engagement; Materiality; Accountability
• Public URL: https://nottingham-repository.worktribe.com/output/40582728
• Publisher URL: https://www.elgaronline.com/display/book/9781800880344/ch39.xml