Evaluating the Viability of Sustainable Finance in Achieving Profitability and Equitability : A Literature Review
Karlstedt, Oscar Johan (2024)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024122138017
https://urn.fi/URN:NBN:fi:amk-2024122138017
Tiivistelmä
This study evaluates the viability of sustainable finance in achieving profitability and equitability compared to traditional finance. Sustainable finance integrates Environmental, Social and Governance (ESG) criteria into financial services to support sustainable economic growth while addressing environmental and social challenges. The primary aim was to assess whether sustainable finance initiatives have been financially viable and profitable, and to what extent they have achieved equitable outcomes. The research questions guiding this study were: (1) Has sustainable finance been financially viable and profitable compared to traditional finance? (2) To what extent has sustainable finance achieved equitable outcomes? (3) What factors have influenced the profitability and equitability of sustainable finance initiatives?
A thematic literature review was conducted, reviewing approximately 1450 papers for relevancy, and analysing in depth approximately thirty peer reviewed articles, scholarly books, and credible institutional reports published from the year two thousand onwards. The study is grounded in stakeholder theory, sustainable development theory, and social equity theories, providing a knowledge framework for understanding the intersection of profitability and equitability in sustainable finance.
Findings indicate that sustainable finance initiatives can achieve profitability objectives when effectively integrating ESG factors, though results vary based on market context and implementation strategies. Equitability outcomes are also achievable, particularly when initiatives are well-designed, inclusive, and supported by effective legislation. However, challenges such as implementation difficulties, lack of standardization, and regional differences can impede success.
In conclusion, sustainable finance holds promise as a strategy that aligns economic success with social responsibility. Realizing its full potential requires addressing existing challenges, including improving ESG integration, standardizing metrics, and enhancing supportive policies. Limitations of the study include reliance on existing literature, potential publication biases in sources, and focus on English-language sources, which may affect generalizability. Future research should focus on developing standardized ESG finance metrics, exploring long-term impacts, and examining strategies to overcome implementation challenges.
A thematic literature review was conducted, reviewing approximately 1450 papers for relevancy, and analysing in depth approximately thirty peer reviewed articles, scholarly books, and credible institutional reports published from the year two thousand onwards. The study is grounded in stakeholder theory, sustainable development theory, and social equity theories, providing a knowledge framework for understanding the intersection of profitability and equitability in sustainable finance.
Findings indicate that sustainable finance initiatives can achieve profitability objectives when effectively integrating ESG factors, though results vary based on market context and implementation strategies. Equitability outcomes are also achievable, particularly when initiatives are well-designed, inclusive, and supported by effective legislation. However, challenges such as implementation difficulties, lack of standardization, and regional differences can impede success.
In conclusion, sustainable finance holds promise as a strategy that aligns economic success with social responsibility. Realizing its full potential requires addressing existing challenges, including improving ESG integration, standardizing metrics, and enhancing supportive policies. Limitations of the study include reliance on existing literature, potential publication biases in sources, and focus on English-language sources, which may affect generalizability. Future research should focus on developing standardized ESG finance metrics, exploring long-term impacts, and examining strategies to overcome implementation challenges.