Sustainable Finance and Financial Sector Social Accountability
Sustainable finance, that is, the integration of environmental and social considerations into banking, investment and insurance activities, is recognised as an integral part of our movement towards a more sustainable society. The basic premise of sustainable finance being that as the finance sector has an enormous influence on economic activity, it can leverage this to have an equal, mutually reinforcing influence on environmental protection and social stewardship; through the entities in which it lends to and invests in. In addition, financiers are seen to have a societal duty to be responsible and accountable for the (indirect) environmental and social impacts of their lending and investment activities. Furthermore, it is seen to be in their own best interest to do so, as these environmental and social impacts can pose significant financial risks to them.
The sustainable finance and financial sector social accountability research theme, investigates the drivers, process, and (societal) outcomes of sustainable finance activities, such as environmental and social credit risk management; responsible investment; and public transparency and reporting associated with these activities. Current emphasis is placed on responsible investment – i.e. the integration of environmental, social and governance (ESG) issues into mainstream investment – activities, and in particular, responsible investment engagement processes. Engagement relates to direct dialogue between institutional investors and their investee companies on environmental, social and governance issues; with the aim of improving the ESG performance of investee companies to ensure positive risk-adjusted returns for investors; enhanced efficacy, management and ability to secure and maintain investment for investee companies; and decreased negative impacts on the environment and society.
Commissioned projects
The sustainable finance research theme hub is currently collaborating with the Ethos Centre for Responsible Business, Cass Business School, on a research project on ESG engagement commissioned by the UN-backed Principles for Responsible Investment (PRI). The aim of the project is to conduct unique, in-depth qualitative research into the perceived value ESG engagement creates for both investors and investee companies. 2018. The first results of this project are available in a report launched by the PRI in May 2018; which also was highly commended in the Savvy Investor 2018 Awards' "Best ESG Paper 2018" category.
For more details on this project and report
Research theme leader/convenor
Dr Niamh O'Sullivan, Assistant Professor Sustainable Business/CSR
Partners