Influence of ESG on Finnish Institutional Investors’ Investment Decisions
Zaitseva, Ekaterina (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051612680
https://urn.fi/URN:NBN:fi:amk-2024051612680
Tiivistelmä
This thesis investigates how ESG influences the investment decisions of Finnish institutional investors. The main goal of this study is to analyse the significance of ESG in the investment decision-making process. The research is focused only on Finland.
This thesis is based on a qualitative research method and includes both theoretical overview and empirical research. Literary research is based on the desktop study and provides the reader with a relevant knowledge and background information for a better understanding of the further study. It is followed by empirical research that was conducted via interviewing representatives of Finnish institutional investors and includes recent data gathered from investment professionals. Theoretical and empirical parts are interconnected and support each other in order to answer stated investigative questions.
This thesis explores the importance of ESG criteria, ESG data analysis for investment-related decisions, challenges of ESG integration, and the importance of demonstration of ESG-related investment activities by Finnish institutional investors.
Due to the rising concerns on sustainability issues, the ESG concept is gaining its popularity in many countries. Finland is no exception, and the research has shown that Finnish institutional investors highly value ESG in the investment decision-making process. Especially environmental criteria carries a lot of weight. Being a relatively new concept, ESG undergoes lots of challenges in the process of incorporation into decision-making. The biggest concern related to this concept is the lack of systemised and standardised data. As this research showed, institutional investors in Finland mainly rely on internal analysis of ESG data, but in some cases, they also use data from ESG rating agencies, which acts as a supplement in the investment decision-making process. Finnish institutional investors highly rate transparency and share a lot of information about sustainable and responsible investment activities in order to show the public their commitment to sustainable practices and engage people to follow this “sustainable” path.
To conclude, this thesis underlines the rising importance of ESG in the example of the country of choice – Finland. This research work shows how strongly Finnish institutional investors are committed to responsible and sustainable investing. ESG data, together with financial metrics, helps to better assess the organisation’s activities in a long term.
This thesis is based on a qualitative research method and includes both theoretical overview and empirical research. Literary research is based on the desktop study and provides the reader with a relevant knowledge and background information for a better understanding of the further study. It is followed by empirical research that was conducted via interviewing representatives of Finnish institutional investors and includes recent data gathered from investment professionals. Theoretical and empirical parts are interconnected and support each other in order to answer stated investigative questions.
This thesis explores the importance of ESG criteria, ESG data analysis for investment-related decisions, challenges of ESG integration, and the importance of demonstration of ESG-related investment activities by Finnish institutional investors.
Due to the rising concerns on sustainability issues, the ESG concept is gaining its popularity in many countries. Finland is no exception, and the research has shown that Finnish institutional investors highly value ESG in the investment decision-making process. Especially environmental criteria carries a lot of weight. Being a relatively new concept, ESG undergoes lots of challenges in the process of incorporation into decision-making. The biggest concern related to this concept is the lack of systemised and standardised data. As this research showed, institutional investors in Finland mainly rely on internal analysis of ESG data, but in some cases, they also use data from ESG rating agencies, which acts as a supplement in the investment decision-making process. Finnish institutional investors highly rate transparency and share a lot of information about sustainable and responsible investment activities in order to show the public their commitment to sustainable practices and engage people to follow this “sustainable” path.
To conclude, this thesis underlines the rising importance of ESG in the example of the country of choice – Finland. This research work shows how strongly Finnish institutional investors are committed to responsible and sustainable investing. ESG data, together with financial metrics, helps to better assess the organisation’s activities in a long term.