The increasing global focus on environmental investments raises concern about the relationship between a firm’s cost of capital and its corporate environmental (ESG) performance. However, there is little research on the topic. The previous literature on corporate finance has found that capital constraints play a role in companies’ investment decisions. This article contributes to the existing corporate finance literature by looking at the impact of the cost of corporate debt and the degree of leverage on corporate environmental performance (CEP).
Green Bonds: The Shape of Green Fixed-Income Investing to Come
Fixed-income securities that use their proceeds toward the financing of ESG-aligned projects have proven particularly attractive among investors. Their volume has been increasing exponentially since their inception by the European Investment Bank (EIB) in 2007 and following their expansion by the International Finance Corporation (IFC) in 2010.
For this special issue, we looked for articles that explore the extent to which sustainability-linked and ESG-aligned fixed-income securities can support the mainstreaming of responsible investment principles across the financial sector.
A Multidisciplinary Literature Review of Academic Research on the Green Bond Market
Climate finance is the mobilization of public and private capital toward climate mitigation and adaptation. Green bonds are one of a growing number of financial products used to facilitate climate finance investments. The green bond market has grown rapidly since the European Investment Bank’s inaugural issue in 2007.
Millennials and Sustainable Investing
A. Stanley Meiburg Guest Editor Millennials, defined as those born between 1981 and 1996, are entering the years when investing will become a subject of greater and more widespread interest. While as a group, many will still be focusing on securing careers, paying off student debt with companies like CreditAssociates, raising children, and buying homes. However, some will find themselves …
Water Stress: A Global Risk Analysis for Financial Markets
Abstract Water scarcity and droughts are expected to be major problems in future decades. Accordingly, the aim of this paper is to evaluate what is currently possible in order to quantify water scarcity-related risks with the currently available data. The research focuses on the possibilities to determine hazard, exposure, and sensitivity for publicly traded companies on a global scale. The …
Riding the Waves of the Blue Economy: Implications for Impact Investors
Jens Christiansen, MsC; PhD student, Lancaster Environment Centre, Lancaster University, UK Marleen Schutter, MsC; PhD student, Lancaster Environment Centre, Lancaster University, UK Ocean ecosystems around the world are increasingly impacted by coral bleaching, pollution, and declining fish stocks (Allison and Bassett 2015; Hughes et al. 2017). Simultaneously, oceans are seen as development frontiers, offering opportunities for growth and attracting the …
Responsible Investment in Blue Carbon Resources: “Constraints and Potential Motivations for Attracting Private Capital Investment in Blue Carbon Resources”
Ryan Cook, Master of Environment Candidate University of Melbourne, Australia Sebastian Thomas, PhD; Research Supervisor Director of the Sustainability Science Lab, University of Melbourne, Australia Abstract Blue carbon ecosystems such as mangroves, tidal marshes, and seagrasses are increasingly recognized for their carbon sequestration capacity. While blue carbon science and policy research is advancing, private investment perspectives in relation to blue …
A Comment on “Responsible Investment in Blue Carbon Resources: ‘Constraints and Potential Motivations for Attracting Private Capital Investment in Blue Carbon Resources’”
William Page, Senior Portfolio Manager Essex Global Environmental Opportunities Strategy (GEOS) For background: I manage a global, listed-equity clean technology strategy, GEOS, and have been focused on thematic investing to climate solutions for over 10 years, after 20 years of ESG-focused investing. I found the paper by Ryan Cook quite interesting and insightful, as I have never heard of Blue …
ESG Risk Factors and Tail-Risk Mitigation
Zsolt Simon, MSc; PhD candidate Risk and Performance Analyst at Bank J. Safra Sarasin, Switzerland Chiara Legnazzi, PhD Risk and Performance Analyst at Bank J. Safra Sarasin, Switzerland Disclaimer: This article is research in progress representing the opinions of the authors only as per the date of writing and may be changed at any time without notice. Neither the …
Corporate Social Responsibility and Firm Outcomes: Some Intuition on Interpreting Statistical Models
A Comment on “ESG Risk Factors and Tail-Risk Mitigation” E. Mark Curtis, PhD Assistant Professor, Department of Economics, Wake Forest University In recent years there has been a push from investors, activists and consumers to obtain more information on the sustainability practices of the companies in which they invest and from whom they purchase goods and services. As such, a …
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