Investors spend money and resources trying to reduce the environmental, social, and governance risks in companies they own. If unattended, these risks may cause reputational damage not only to the portfolio firm, but also to its owner. In this paper, we study five Swedish national pension funds and the influence strategies used in shareholder engagement. Knowledge about influence strategies is important because successful shareholder engagements can lead to more sustainable corporate behaviour and a lower risk to the investor. Our findings show that, besides traditional power and legitimacy dependencies which have been reported as influential in deciding stakeholder salience, we present five additional factors in determining influence strategies in shareholder engagement. We provide a conceptual model showing how these factors interlink with choices of influence strategies, offering a practical use of this study. Stakeholder theory has been used as our theoretical frame of reference, based on existing influence strategy literature taken from the stakeholder–firm perspective.
This article sets out how the capital markets relate to sustainable development issues and makes some modest proposals for how to improve our capital markets. It argues that capital markets' influence over corporate sustainable development originates via two principal routes: (i) financial influence - the buying and selling of equity shares and debt on the capital market influences the cost of capital for listed companies; and, (ii) investor advocacy influence - shareholders are the principals of the business and can exercise their rights of share ownership over their agents, the company directors, by sending explicit signals regarding the management of the company. Capital markets generally do not need to understand nor reward sustainable behaviour. This is either because the markets are inefficient and do not reward good behaviour, or because market failures means that investors do not need to worry about the very long term costs as they are outside of their investment time horizons. In order to change this, we should focus on the incentives of all key players within the capital supply chain such that they are all sanctioned and incentivized partly on their sustainability performance. The market also needs much better market information on the sustainability performance of companies. Better training of market participants on the materiality of sustainability issues as well as how they can be factored into valuation analysis would also help. However, before capital markets can be genuinely sustainable we need capital market policy makers to have greater regard for future generations when setting policy. This will require greater government intervention, particularly around the regulation of investor delivery of responsible ownership.
The landscape of shareholder resolutions within an economy provides insight into the various perspectives as to what constitutes appropriate corporate forms and functions. This landscape arises from a community of practice and amounts to a public corporate governance exchange. Analysis of all shareholder resolutions filed with Canadian corporations from 2000 to 2009 reveals that Canada’s distinctly multi-jurisdictional model of corporate governance and preponderance of block-holdings serve to significantly limit the corporate governance exchange. Compounding such limitations is the tendency of large Canadian institutional shareholders to refrain from engaging in the public corporate governance exchange thereby shrouding the behaviour of some of the most potentially influential flows of finance. Interestingly, Canadian shareholders engage in issues across 25 distinct themes relating to corporate environmental, social, and/or governance performance while favouring the latter. Perhaps most consequentially, however, the public Canadian corporate governance exchange is distinctly multi-jurisdictional thereby indicating potential regional divergence.
Recently, much attention has been paid to the fundamental meaning of water resources, with regard to the efficient operation of the business community and the viability of the financial market by a range of financial stakeholders such as the banking sector, insurance companies and investors. The main concern of these actors is to avoid significant financial losses associated with water problems namely, the deterioration of water quality, water overuse, supply chain risks and climate change effects. This article proposes a framework to assess business risks that are associated with water resource problems. The proposed framework is based on ideas from current benchmarking and scoring accounting systems which drew data from published corporate environmental reports. By identifying the relationship between environmental and financial issues, it would enable actors of financial markets to make better investment decisions. It was applied to a number of Greek businesses certified by the Environmental Management and Audit Schemes certification system.
The article presents an overview of the assumptions and unintended consequences of the widespread adoption of modern portfolio theory (MPT) in the context of the growth of large institutional investors. We examine the many so-called risk management practices and financial products that have been built on MPT since its inception in the 1950’s. We argue that the very success due to its initial insights had the unintended consequence, given its widespread adoption, of contributing to the undermining the foundation of the financial system in a variety of ways. This study has relevance for both the on-going analyses of the recent financial crisis, as well as for various existing and proposed financial reforms.
This article examines whether socially responsible investing (SRI) may be legally permissible if it fulfills the will of the beneficiaries in a fiduciary relationship, and considers potential legal reforms to give better effect to the interests of beneficiaries. It thus examines a relatively neglected aspect of fiduciary finance, which so far has focused on whether SRI is ‘financially material’ to investment performance. It argues that by re-framing fiduciary finance as an active relationship rather than merely the mechanical application of legal duties, we may allow trustees to invest socially pursuant to the wishes of beneficiaries. However, this article also suggests that considerable legal and practical obstacles confront this path to SRI. They include the trustees’ duty to treat different beneficiaries even-handedly and the traditionally passive role that trust law has cast beneficiaries. Reliance on widely held social customs and evaluation of third parties’ interests as a proxy for the will of beneficiaries, and the role of statutory reforms mandating consultation with and representation of beneficiaries on the governing boards of trustees, are also considered in this article. It concludes by suggesting some potential legal reforms to strengthen reliance on the will of beneficiaries as a means of SRI.
This article argues that CalPERS' new principles-based approach to investing in emerging markets stands at the midpoint between its previous alpha-generation policy of complete country-level divestment and its beta enhancement associated with universal investing in its domestic and developed markets. Although CalPERS' previous policy addressed macro-level standards at a country level by negatively screening out companies in restricted countries, it precluded CalPERS' normal practice of corporate engagement to raise environmental, social and governance (ESG) standards at the company level in these markets. We argue that the new policy brings CalPERS' emerging market portfolio more closely in line with its policies of engagement. We describe this policy as `enhanced alpha generation'. We use CalPERS' emerging market portfolio holdings data and cross-reference these company holdings with KLD data to contract extra-financial merits of the new policy. We further examine the share prices of these firms against standard industry benchmarks to determine the policy's material impact on CalPERS' portfolio. We conduct interviews with CalPERS' investment managers - both internal and external - to determine how the new emerging market investment principles are incorporated in investment processes. This allows us to identify two approaches to the implementation of the Principles: a `hard-fast' screening approach, and a `value tradeoff' approach. One of which entailed significant opportunity costs. These findings, when assessed in the context of various trends in the investment environment, and issues brought fourth in our interviews - with related investment practitioners, CalPERS' trustees, and leading ESG experts at KLD and Verité - sheds light on the future state of ESG investing in emerging markets.
This article assesses the fiduciary law context governing socially responsible investing (SRI) in retail funds in order to understand the scope for promoting sustainable development. Most scholarship on this subject has focused on institutional investors such as pension plans, yet the legal, institutional and market context of retail funds has some distinct characteristics. The article argues that although the retail sector offers the most generous legal space for SRI of any financial sector, SRI practice is far from mainstream owing to a range of organizational and economic impediments coupled with the drawbacks of a relatively permissive legal milieu. This article highlights that the obsessive focus on the supposed fiduciary law barrier to SRI can overlook other institutional obstacles to its practice, as well as to stress that it is insufficient merely to have a legally enabling framework if we wish SRI to make a more fundamental contribution to sustainability. Furthermore, any analysis of the fiduciary responsibility of retail funds is incomplete without taking into account the impact of other legal standards and duties in this sector such as from contract law and financial regulation.
Using over 18 thousand cases from 3,541 companies drawn from 30 developed countries over the period 2002 to 2010 we analyse the impact of strategic shareholdings on different elements of corporate social responsibility (CSR). We find that total strategic shareholdings adversely affect the environmental and social scores but not that for governance. However, this effect is largely driven by entrenched and undiversified holdings such as family and corporate cross-holdings whereas diversified institutional investments typically have an insignificant impact. This negative influence of undiversified holdings is strongest on CSR that benefits society in general, rather than CSR that impacts on the company itself or its business contacts. These external benefits include business ethics, climate change, environmental management and human rights.
It is perceived that the microfinance institutions (MFIs) served millions of poor people by providing them easy access to loans with better repayment rates. The purpose of this study is to conduct a cross-country comparison among three Asian developing countries (Bangladesh, Pakistan, and India) and two developed economies (UK and USA) to evaluate the effectiveness of their MFIs in serving low-income people. The microfinance data for six years from 2006 to 2011 are collected from authentic sources. The findings of the study reveal that Bangladesh and India are comparatively ahead of other nations in serving poor people by providing them microcredits.
This exploratory study investigates how banks, engaged in sustainable lending, monitor the performance of small and medium entrepreneur (SME) borrowers to be environmentally and socially responsible throughout the life of the loan. We focus on domestic banks that have adopted sustainable lending in their commercial lending activities to SMEs. A phenomenological inquiry into the lived experiences of four bankers based in Europe and one banker in North America revealed the lack of formal performance measurement systems to monitor compliance with sustainability requirements. We identify that banks resorted to the use of storytelling to report on the performance of their sustainable lending activities. The study concludes with two recommendations for banks. First, banks could avail of the services of external consultants who specialize in the measurement of sustainability activities. Second, banks could develop internal expertise through training and hiring of personnel with experience in measuring environmental and social impacts.
What follows is an account of the concepts of information and noise as they apply to an analysis of high-frequency trading according to ‘heterodox economics’. The text proposes a framework according to which finance can best be understood as a complex technical system tightly coupled to other social, economic systems. To be more precise, the paper attempts to show how finance is not just any complex system but it can be understood as an ecology of evolving socio-technical systems, sub-systems such as investment banks, hedge funds, high-frequency trading traders, retail investors, pensions funds, etc. All of these are the technical building blocks of our financial markets. Moreover, we attempt to show how concepts from other disciplines, such as entropy, information and noise, can be useful in opening up the world of finance from its traditional economic milieu. Although the following text is confined to the discursive realm of humanities/social sciences, it echoes the analytical approaches of econophysics and experimental economics and particularly the ongoing research around ‘computational evolutionary economics’ [Mirowski, P. 2007. “Markets Come to Bits: Evolution, Computation and Markomata in Economic Science.” Journal of Economic Behavior & Organization 63: 209–242; Mirowski, P. 2010. “Inherent Vice: Minsky, Markomata, and the Tendency of Markets to Undermine Themselves.” Journal of Institutional Economics 6: 415–443]. This becomes particularly relevant in the context of the so-called robot phase transition from human-dominated trading to the more automatic electronic trading. The current microstructure of automatic market-making can be understood as an ‘ecological niche’ developed by ultra-fast trading algorithms which ‘feed’ on the asymmetries and disparities of the wider ‘financial ecology’. They do this by dissipating noise and adding to the complexity of market microstructure a behaviour that can push the whole ecology to critical thresholds, sometimes referred to as flash crashes. This whole process can ultimately be described by Philip Mirowski's notion of ‘inherent vice’, as well as by Sir Robert May's concept of instability ‘which develops in ecosystems upon increasing bio-diversity’ [Caccioli, F., M. Marsili, and P. Vivo. 2007. “Eroding Market Stability by Proliferation of Financial Instruments.” The European Physical Journal B – Condensed Matter and Complex Systems 71: 467–479 ; Haldane, A., and R. May. 2011. “Systemic Risk in Banking Ecosystems.” Nature 469: 351–355].
Financial investment performance of stock portfolios is driven by many factors of influence like portfolio diversification, quality of funds management or gravitational effects of market phases. It is, therefore, quite possible that relationships between sustainability and financial performance elude measurability because they may be overshadowed and dominated by other, more powerful or temporarily more influential factors. Using a new quantitative model for portfolio optimisation that simultaneously controls for both financial and sustainability related effects, we investigate whether and how different levels of sustainability in stock portfolios influence investment return when other factors with known influence on investment performance are neutralised. The model is applied to the German Stock Market Index Deutscher Aktienindex (DAX) for the period of 2003–2012 with regard to varying market phases. The findings show a distinct yet nonlinear relationship between sustainability and investment performance that is especially strong in phases of crisis. These results may indicate a business case for socially responsible investment (SRI) that has not yet been fully capitalised with the existing SRI instruments.
The political aspects of social responsibility (SR) have been much debated in academia, but so far there has been little attention paid to how the political usage of SR discourse shapes everyday practices in organisations. The first purpose of this essay is to develop a framework based on post-foundational political thought and institutionalist approaches to SR in order to explain how the usage of SR discourse shapes activities in organisations. The second purpose is to demonstrate the application of this framework in order to analyse the politics of SR in institutional investment. This paper first studies what kind of theoretical foci are provided by influential reviews in SR and socially responsible investment (SRI) literature. It is then demonstrated, by means of a sample case study focused on Finnish pension insurance companies, how SR discourse can politically shape institutional investment practices. The findings suggest that SR discourse can politically shape investment practice by means of factors that would typically be excluded from explanation if studied on basis of the literature reviewed.
Environmental, social, and corporate governance (ESG) scores are frequently involved in investment-related decision-making, e.g. for red-flagging or to manage risks. The increasing interest in ESG data raises the question about their validity from various sources. Therefore, we explore the consistency and convergent validity of the well recognized ESG data providers. Exploratory factor analysis of S&P Global 1200 index demonstrates considerable uncertainty across extracted latent factors. Further factor analyses show that the consistency and convergent validity across ESG data significantly depend on the industry type and the country of domicile. These findings are supported by confirmatory factor analyses. Thus, the stakeholders are encouraged to incorporate the company sector and domicile aspects into their decisions. Otherwise, naive use of primary ESG scores may provide a misleading clue.
Covid-19 recovery efforts via public and private finance should not support assets and companies that are incompatible with the Paris Agreement. Yet even before the current crisis, there was a lack of agreement about what investor portfolio or bank loan book alignment with climate change outcomes actually means, and what assets are (in)compatible with different carbon budgets and global warming thresholds. We need to clarify this urgently and embed it within decision-making frameworks. Assessing (in)compatibility with a warming threshold should take account of carbon lock-in. We also need to develop appropriate confidence levels for measuring (in)compatibility. The state of (in)compatibility changes under different circumstances and targets for alignment should be set in a way that explicitly acknowledges these uncertainties. A portfolio with a lower confidence level would be less desirable than one with the same level of alignment and a higher level of confidence.
Although the sukuk market has maintained remarkable growth momentum over the recent years, the optimism has been significantly moderated by the abrupt shock due to the pervasive COVID-19 pandemic. However, sukuk can be used as an effective financing option by governments to overcome a fiscal deficit and to support those adversely affected by the pandemic. Sukuk Prihatin (SP), the first-ever digital sukuk issued by the Government of Malaysia, has launched to engage citizens to contribute to the country's recovery efforts in the wake of COVID-19. Therefore, this study aims to probe the motivation that influences retail investors’ inclination to invest in such innovative sukuk. Based on an integrated model of planned behavior (TPB) and social cognitive theories (SCT) and data gathered from 279 retail investors, this research found that attitude towards SP investment (SPI), social norms, perceived control regarding SPI, sukuk features and digitization are significant determinants of investors’ willingness to invest in SP. It also revealed that tax incentives-moderated interactions of social norms, perceived control and sukuk features on SPI intention are significant.
While Transition Finance is increasingly entering the sustainable finance discourse, particularly among practitioners, it is often poorly defined, and there is currently no agreed definition in the literature. I propose a definition for Transition Finance and outline some of the potential benefits associated with the use of this definition. I also argue that Covid-19 related stimulus and bailouts, with the attendant increase in government backed financing facilities for counterparties, could ensure Transition Finance is embedded into the design of these financing facilities. Doing so would accelerate the wider adoption and mainstreaming of Transition Finance.
The new global pandemic of COVID-19 has created severe financial challenges globally, forcing several countries in Africa to suspend projects that support the economic development goals. Looking at this pandemic as an exogenous shock to the existing institutions of different countries, it provides a golden opportunity to examine how countries in Africa can emerge strongly out of this financial strain and sustain infrastructure financing through alternative financial means. Through multi-method approaches comprising evidence from World Bank PPI Database and OECD global pension statistical support, desk-based and documentary research, the study reviews the existing literature and industry practices in relation to pension funds’ investment in infrastructure both in developed and developing economies, focusing attention strictly on the barriers, opportunities and solutions to improving the slow growth in Africa. Recommendations include expert analyses contextualised within the thematic framing of guarantee and risk absorbing approaches; availability of investable infrastructure aligning with investors’ benchmarks; suitable infrastructure investment vehicle and flexible exit strategy.
The COVID-19 induced the central bankers to search the most efficient stimulus measures. As a solution, they made an unprecedented step. They lifted down the reserve requirement (RR) to zero. This was done in the United States [FRS. 2020. “Federal Reserve Actions to Support the Flow of Credit to Households and Businesses.” Accessed February 10, 2021. Board of the Governors of the Federal Reserve System] and Morocco [BKAM. 2020. “Monetary Policy Report No. 55.” Accessed from Central Bank of Morocco Website]. The existing monetary theory literature suggests that the broad money supply should go to infinity as a result. Then we may expect the rapid economic recovery. However, this may not come true. The novelty of this paper is the development of the money multiplier theory. We explain why a step to set the RR at zero may boost (though slight) the cash-intensive economy (like Morocco) and may not deliver any benefit to a mostly cashless one (like the US, Canada, or the EU).
This research investigates the short- and long-term effect of COVID-19 pandemic period and the largest Islamic stock market development (SMD) in term of size and market activity (turnover) on financial crises (FCs) indicator and identifies the Granger–causality relationship exist between them. We apply an autoregressive distributed lag technique analysis method in estimating short- and long-run models of this relationship, using 34 monthly observations, from 2018M1 to 2020M10 Islamic stock market of Kingdom of Saudi Arabia (KSA). The short-term result implies that the FC indicator had significant positively affected by the COVID-19 pandemic. However, the long-run model result shows that market size indicator leads to a major FC, while market trade value indicator has negative impact on FC indicator in KSA Tadawul market. In addition, the results show that the only market capital indicator Granger–causes FCs. We concluded that the Saudi policymakers should make new regulations to avoid the negative effect of FC, in order for the growth of its stock market size and trade, for the stability of financial economic in Saudi Arabia. They should add more support to stock market trading to eliminate the potential threat of FC. We believe this is the first empirical study that investigates the short- and long-term effect of SMD, in terms of size and activity development on the FCs volatility in largest Islamic stock exchange market without ignoring the potential effect of COVID-19 pandemic. Also, this research is novel in terms of studying a market that was previously closed to outsiders and has implemented various financial sector reforms in recent years.
Apart from the government, other institutions are needed to make active contributions to the people’s economy since the Covid-19 pandemic has made it more difficult. In Indonesia, there are large community organizations with considerable assets, such as LAZISMU. During the pandemic, Indonesians felt the active participation of Muhammadiyah and all of its charitable efforts. Therefore, this study aims to describe the contribution of LAZISMU in dealing with the impact of the pandemic. The data analyzed showed that the contribution of LAZISMU was in order to deal with the impact of the pandemic in various forms, by providing scholarships, distributing basic necessities, helping orphanages and distributing masks. This was carried out in accordance with the procedures of Lazismu and health protocol rules during the pandemic.
Tourism is one of the sectors most affected by the non-arrival of our compatriots from the diaspora due to COVID-19. The tourism sector is experiencing a rapid and sharp decline in demand and an increase in job losses throughout our country in Kosovo, putting many businesses at risk. The pandemic (COVID-19) is, first of all, a crisis that is affecting the lives of citizens and has caused a global economic crisis, also in our country in Kosovo. COVID-19 has very tangible impacts on the tourism sector, which is vital for many people, and businesses. The data show that the tourism sector has had a decline in revenues compared to the same period last year, precisely due to the cessation of activities. According to the data, the most affected sector is tourism and therefore the government should use incentive level policies and provide financial support for this sector. The economy and the activity of the tourism sector has been further deteriorated by the non-arrival of our compatriots from the diaspora, due to the Pandemic, thus causing great losses in the tourism industry.
With the advent of the COVID-19 pandemic, the world has experienced economic and social fragility, which calls for alternative approaches to navigate towards sustainable outcomes. While recent studies show that responsible investments (RI) are resilient during the economic downturn caused by crises such as COVID-19, there has been little exploration into exchange-traded funds (ETFs). Using ANOVA and multivariate regression models, we analyze the differences and relationship between the financial returns of ETFs and their Eco-fund ratings during the COVID-19 pandemic-related financial market crash. Our results indicate that higher levels of the sustainability performance of ETFs do not safeguard investments from financial losses during a severe market downturn. These results contribute to the research by exposing weaknesses of current sustainability scores and rating methods to provide an initial analysis of RI during the COVID-19 pandemic
We study the impact of sustainability on the financial performance of exchange-traded funds (ETFs) in the period of COVID-19. Using a sample of 244 Australian ETFs rated by Morningstar in April 2020, we conducted the portfolio analysis and cross-sectional regression analysis, and the results show that ETF portfolios with lower carbon risk and fossil fuel exposure tend to outperform. However, ETF portfolios with higher social risk tend to deliver a better performance. We also find that ETF portfolios with high environmental risk, governance risk, carbon risk and fossil fuel exposure are more likely to experience high volatility in stock returns. The findings will serve as an important point of reference for investors, businesses and wider stakeholders. The sustainable investing is proving to be resilient during the COVID-19 and a closer look at ESG risks is a lens through which business leaders can build better and more resilient enterprises.
The financial sector is essential to the stability of markets in times of crisis and during the pandemic, banks are called to contribute to society by easing access to credit or keeping rates low. This article explores Canadian banks’ responses to the pandemic assessing their products, services and stakeholders. Using crisis management and stakeholder theories, 3161 news articles about the five biggest Canadian banks and the pandemic were assessed as a proxy for banks’ responses to the pandemic using sentiment analysis, text mining, and statistical methodologies. Results show that banks were negatively impacted by the pandemic and that their stakeholders were approached differently highlighting the community over clients and employees. This study contributes to the need to adapt crisis management strategies and theories to unexpected crises, as others may come, and it sheds some light on stakeholder management measurement processes, which speak to how effective stakeholder management is.
Today, digital transformation as a worldwide phenomenon has taken a great deal in corporate strategies. The implementation of strict confinement has resulted in a quite cancelation of transactions and movements. Digital transformation, synonym to accessibility, rapidity and reliability has been widely triggered during the COVID-19 pandemic. In essence, this research explores the effect of digital transformation on the pandemic outcome through identifying how digitization embraces opportunity and innovative strategy. A research model was proposed and empirically tested with partial least squares path-modeling approach, based on the methodological survey completed with Tunisian banks’ CEO and operational service managing. The results have demonstrated the necessity of digitization as strategic planning to be deployed in both the short and long terms. It is considered a vector of innovation and sustainable development. It helps identify the essential aspects of business processes and how they should be employed to survive and thrive during crises.
This paper examines the effect of market investor types (institutional and non-institutional) on total market trade value in Saudi Arabia during the COVID-19 pandemic, including a three-month period of total containment. The research was conducted using a time series analysis method with an AutoRegressive Distributed Lag (ARDL), using weekly data collected from 7 January 2020 to 24 September 2020. The short-run result shows that both investor types net traded values and ownership holding values negatively impacts the development of Tadawul activity. Furthermore, the development of Tadawul activity showed a negative performance for the total containment period of three months. However, the long-run estimated model shows that, for both investor types, only net traded value has a positive significant impact on market activity development, whereas non-institutional ownership holding value development has a significant negative impact. Our results suggest fear is a mediator for the effect of COVID-19 on stock markets.
The epidemic of COVID-19, the disease triggered by the SARS-CoV-2 virus, has had major economic, political and social effects worldwide, leading to concern about the disease, especially in the franchise service industry. The purpose of this paper is to review literature on three factors: entrepreneurial orientation, market orientation, franchisor support and figure out the relationship of these three factors on franchisee performance. Based on the literature, entrepreneurial orientation, market orientation, franchisor resource has positive and significant impact to franchisee performance. Further, franchisor support holds very important role on moderating relationship between entrepreneurial orientation, market orientation and franchisee performance in this pandemic Covid-19. This paper highlight the concepts to clarify the distinctions between them and suggests the propositions between franchisee entrepreneurial orientation, market orientation, and franchisor supports to franchisee performance. Study on franchisee performance is necessary as franchisees are also employees, customers, stakeholders of the franchisors, contribute to the success of franchise system.
Airbnb is an accommodation service on smart apps. Airbnb was established in 2008 in the United States. In Vietnam, Airbnb appeared in 2015 with about one thousand listings. By the beginning of 2020, this number had reached about 80 thousand in the wake of the Covid-19 Pandemic. In Hanoi, the number of bookings increased from 94% in mid-January fell to 3% in mid-April. In Ho Chi Minh City, on the rise of about 105% in mid-January 2020 to 9, 6% in April. In Da Nang city, the business was the worst, rising to 143.3% in January 2020, falling to 1%, and by the end of August 2020, the rate of reservation guests will only be 3.6%. Airbnb's dire business performance is an indicator of Vietnam's tourism business, the real estate business, and many accompanying people's employment problems.
Long before the term ‘impact investment’ was coined, Historical Homes of South Africa Limited was established in 1966. This company bought memorable historical buildings that could otherwise have been demolished, restored them, and rented them out at commercial rates. By preserving cultural heritage, they encourage tourism and hence economic growth. As an impact-first impact investor Historical Homes of South Africa not only generates positive, measurable social impacts, but also financial returns. The most important factors that have helped the company obtain and maintain legitimacy over five decades are having clearly defined social impact objectives, and achieving these objectives in an effective and efficient manner. This case study contributes to the literature on cultural heritage preservation and the limited body of knowledge on legitimising the impact investment industry. Impact-first impact investors should focus on consequential, linkage, socio-political and pragmatic legitimacy considerations when interacting with social actors, notably investors and advocacy groups.
With the rise in concern for the environment, Green Banking has received a lot of attention in recent times. This study aims to identify different dimensions of researches on Green Banking. Furthermore, an attempt is made to study the growth and geographical spread of researches on Green Banking. Relevant research outlets and keywords are analyzed in order to understand the trends in Green Banking research. The study identified 6 different dimensions namely Conceptual aspect, Legal aspect, Model aspect, Stakeholder aspect, Green Performance of Banks and Financial aspect. Results highlight that Green Banking is yet to be properly explored as only 178 articles were found in different portals. Academic interests in Green Banking have been on a rise since 2011 and have attained maximum attention in the year 2015. The Average Growth Rate of research articles published on Green Banking is 25.44%. Asia has the highest number of countries participating in research on Green Banking and has the highest number of research articles on Green Banking. Theoretical studies on Green Banking are comparatively more than the Empirical ones. Analyzing research outlets revealed that mainstream Finance journals are yet to be more active in publishing articles on Green Banking. Keyword analysis identified three key interests of researchers which are Green Banking, Sustainable Development, and Environment. Lastly scope for future research on Green Banking is identified and stated. This study provides useful insights into the nature and trend of research on Green Banking and can act as a reference point for researchers, policymakers, investors, and regulators.
Sustainable finance has received increasing attention over the last years. Nonetheless, the meaning of the term remains ambiguous. This article approaches this ambiguity by understanding sustainable finance as a contested concept, whose meaning has been subject to varying interpretations. To map these interpretations, the article offers an inductive analysis of the network of actors that concern themselves with sustainable finance. Actors’ competing interpretations of sustainable finance can be conceptualised as frames. Using network analysis and interviews I identify five frames that are present in three periods between 1998 and 2018. Distinct communities advance a Socially Responsible Investment frame, a risks and opportunities frame, a climate finance frame, a critical frame and an integrated frame. Describing the emergence of these frames, their position in the network and their relations to each other can add to our understanding of sustainable finance as it complements existing authoritative classifications and histories of the topic.
The search for a relation between environmental, social, and governance (ESG) criteria and corporate financial performance (CFP) can be traced back to the beginning of the 1970s. Scholars and investors have published more than 2000 empirical studies and several review studies on this relation since then. The largest previous review study analyzes just a fraction of existing primary studies, making findings difficult to generalize. Thus, knowledge on the financial effects of ESG criteria remains fragmented. To overcome this shortcoming, this study extracts all provided primary and secondary data of previous academic review studies. Through doing this, the study combines the findings of about 2200 individual studies. Hence, this study is by far the most exhaustive overview of academic research on this topic and allows for generalizable statements. The results show that the business case for ESG investing is empirically very well founded. Roughly 90% of studies find a nonnegative ESG–CFP relation. More importantly, the large majority of studies reports positive findings. We highlight that the positive ESG impact on CFP appears stable over time. Promising results are obtained when differentiating for portfolio and nonportfolio studies, regions, and young asset classes for ESG investing such as emerging markets, corporate bonds, and green real estate.
This study is aimed to investigate the effect of economic variables on stuck return in Amman Financial markets and reflect to the research variables. Macroeconomics factors play an important role in the performance of the stock. Investors have an intention that fluctuation and forecast are easier if the research of market variables will be identified. For the case study, the Amman Stock Exchange has been taken in the following report. The research will focus on the effect of the interest rate, inflation, and bank interest rate on the floatation of stock. All the variable plays their important role in the movement of stock. Therefore, consequently, the change will be visible in different ways of the market. For this report, a study has been made of the data from the year 2005–2018. Multiple regression models and descriptive statics tools had been used through SPSS for clarification of concepts. The methodology of the research and interpretation of the results are discussed in the following report which helps in driving conclusions. Also, the return of stock was tending to be more fluctuating with the change in every variable. The variable of macroeconomics that was taken for research was GDP, inflation, bank interest rates of deposits. it was also concluded that GDP is directly and has a strong relation with returns of stock. As for inflation, the inverse relationship had been observed.
This research aims at studying the empowerment of Saudi women in the tourism sector according to the Kingdom's 2030 vision, as well as discussing the constituents and constraints of their empowerment in the tourism sector. The researchers reached a number of important results; such as the fact that the representation of Saudi women in the tourism sector is still significantly low compared to men. Recently, however, the level of empowering the Saudi women in the tourism sector has been increased by more than 90%. The city of Makkah topped the cities of the Kingdom of Saudi Arabia in terms of the excellence of women working in the tourism sector, with a high level of women empowerment. A statistically significant difference was found in the components of empowering Saudi women in the tourism sector according to the Kingdom's 2030 vision, according to the age and the educational level.
Current study expects to distinguish the significance and targets of e-management in the tourism industry areas, notwithstanding its role regarding the improvement in tourism industry administrations that accomplish consumer loyalty, its function in improving the management cycles in the tourism industry establishments, and its significance in accomplishing great arranging in these foundations, A survey was applied to 98 people working in the tourism industry, the most significant of which is that the tourism industry organizations in KSA have total autonomy towards finishing e-administrations for customers, and that e-services in tourism industry in addition to raising the relational abilities and capacities of the organizations and all laborers inside and outside the area, and that advanced innovation helps the administrators of the tourism industry areas in getting to know the projects and work plans of all divisions in the area, which empowers them to get ready sensible designs to actualize these projects.
This conceptual research aims to study the core components ofIndia’s first proposed Social Stock Exchange (SSE), its structureand regulations, including types of eligible social enterprises,investors and financial instruments, disclosures, and reportingrequirements along with the global SSE to carry out an informedand nuanced comparison. The research relies primarily onsecondary and descriptive in the study. The study results showthat India, the world’s most populous democracy, is about tolaunch a SSE in 2021 which will serve as a mediator betweensocial enterprises that need funding and investors who are willingto invest their money and by designing and providing robustsolutions which transform the habit of charity into a culture ofsocial investment. Exchange focuses more on the development ofthe ecosystem, emphasizing policy and regulatory advocacywhere Social ends and profit motives do not contradict eachother. This implies profit generation for social purposes is a keysustainability feature. SSE should be a means for the markets toserve the society not for society to serve the markets.
(PDF) India’s Social Stock Exchange (ISSE) – A 360° Analysis - Today’s commitment for tomorrow’s action. Available from: https://www.researchgate.net/publication/359908672_India's_Social_Stock_Exchange_ISSE_-_A_360_Analysis_-_Today's_commitment_for_tomorrow's_action [accessed Jun 07 2022].
A just transition transaction (JTT) in South Africa aims to address complex challenges of financing a transition away from coal, and social justice. Accelerated decarbonisation of electricity is essential for mitigation globally and in SA. However, the national utility Eskom, a state-owned enterprise, is in crisis with major operational, structural and financial problems, including legacy debt of €25bn. How and to what extent can a just transition transaction catalyse deep, structural change that is required in SA’s electricity system and promote social justice? What can we learn from the case study of a JTT about transition finance? The architecture of the JTT includes a blended finance vehicle, combining international concessionary and domestic commercial finance. Finance enables transition if it respects certain principles, promotes ambitious decarbonisation and assures compliance. A tough problem is whether such finance is provided at activity – or entity-level. We explore options for watertight remedies to ensure compliance with ambitious climate change action, though these merit further research. The innovation proposed to fund social justice is that concessional value provides significant and predictable flow of funds into a Just Transition Fund. The JTT partially addresses Eskom’s financial challenges, and thereby the strain on the country’s fiscus against a background of increasing public debt. Significant mitigation on the scale of 1–1.5 Gt CO2-eq over thirty years is achievable. The transaction may be of wider interest: Emerging economies with high coal dependence and socio-economic risk during energy transition might translate lessons from South Africa’s JTT for their own contexts.
The study examined the extent to which borrower–lender relationships affect the rationing behavior of commercial banks in Ghana. A cross-sectional panel data comprising 14 commercial banks were used for the study. Using the classical linear regression model our results showed that borrowers who have long-term relationships with the banks received more credit at reduced interest rates. It was also observed that years of experience in business, gender, age, sector of business, value of assets, profits and loan maturity period were the significant factors influencing the rationing behavior of the commercial banks. The overall results are quiet revealing, and points to the fact that the long-term borrower–lender relationships lead to some level of trust and confidence between the borrower and the lender that comes with its accrued benefits.
This article examines the international regulatory framework for large-scale agricultural land investments (‘LSALIs’). Population growth, natural resource scarcity, and the financial and food price crises have made financial actors revise their long-held hesitation towards direct investment in farmland. Although these investments could inject much-needed capital into rural areas, LSALIs have been connected with grievous human rights violations and environmental degradation. This article finds that the instruments designed to promote socially and environmentally responsible LSALIs have increasing levels of legitimacy but lack accountability mechanisms. As a result, the emerging regulatory framework for LSALIs does not create the balance required between protecting investors from host state interference and ensuring socially and environmentally responsible agricultural investments.
Sovereign Wealth Funds (SWFs) are often used to provide long term macro-economic stability and to accrue and safeguard financial assets for future generations. These state-owned investment funds are usually created using balance of payment surpluses – often from resource exports or the sale of public assets. Given that SWFs are among a few widely-used financial mechanisms created for the benefit of future generations, they can play an important role in helping to achieve the Sustainable Development Goals (SDGs). This paper will argue that a re-direction of economic rents earned from natural resources, along with rigorous and careful ecosystem services accounting can serve to broaden the scope and holistically enhance the value of SWFs. The paper concludes that accounting for environmental assets and the economic benefits derived from such resources can serve as the basis for the establishment of SWFs, promote inter-generational wealth transfer and help stabilise economies impacted by climate change.
This study examined the outcomes of interaction between organizational characteristics and robustness of management accounting practice on corporate sustainability from the standpoint of the Global Management Accounting Principles (GMAP). The GMAP framework, developed and endorsed by The American Institute of Certified Public Accountants (AICPA) and The Chartered Institute of Management Accountants (CIMA) in 2014, reflects the paradigm shift in the roles of management accountants in recent times from traditional management accountants to strategic partners aware of business imperatives. Using a structured-questionnaire, the views of senior accounting/finance officers from 131 firms based in Nigeria were gathered and analyzed using descriptive and inferential statistical tools (One-way MANCOVA, OLS regression and moderated regression analysis). It was observed that although management accounting activities were generally performed frequently, certain activities requiring review and modification of already prepared cost and revenue estimates appear to be performed less-frequently. Further, organizational characteristics such as size, organization lifecycle, presence of specialist skills, affiliation to foreign entity and ownership structure significantly affect the robustness of management accounting practice. Whilst detecting that robust management accounting practice elevates corporate sustainability, organizational characteristics such as size, organization lifecycle and presence of specialist skills may determine the extent to which such benefit is realized. Seeing that the presence of specialist skills was the strongest moderator of the relationship between management accounting practice and corporate sustainability, the study advocates for the existence of a standalone management accounting unit/department to improve the realization of the benefits embedded in implementing contemporary management accounting practice.
This study investigated the influence of stakeholders on management accounting practice (MAP). The research objectives were to: appraise level of influence exerted by stakeholders on management accounting activities; assess practice areas in management accounting affected by stakeholder’s influence; and determine the stakeholder groups that wield the highest influence on MAP. Data collection was aided by a structured questionnaire administered on Senior Finance Officers tasked with strategic and financial oversight roles from 131 firms across major sectors of the Nigerian economy. Descriptive statistics, one sample t-test, Analysis of Variance (ANOVA), Multivariate Analysis of Variance (MANOVA), and Multiple-discriminant analysis were used for analysis. Results suggest that the overall level of influence wielded by stakeholders on management accounting activities is moderate. MAP of companies appears not to be strongly driven by strategy-related variables such as competitors and customers, but by coercive institutional factors. Organisations that want to survive happenings in the contemporary business environment are implored to entrench customer- and competitor- consideration in their management accounting activities. Considering that modern management accounting techniques focused on competitors’ activities, customers’ tastes and market sentiments are externally-orientated, organisations may have to set up functions that will take up the responsibilities of continuous environmental scanning, intelligence gathering, and market research.
The study investigates the factors that influence creative appliances in Jordanian hotels, as well as sustainable practices and their financial impact. This study aims to assist hotel management in understanding the reasons for creative accounting and assessing the impact it has on the integrity of hotel financial statements. 345 chartered accountants were included in the research sample (auditors). Jordanian hotels use good creative accounts; in other words, the hotel's financial accounts are approved by auditors because data and financial statements are manipulated in accordance with accounting rules and standards. This article discusses each creative accounting technique that can be used in hotels, to demonstrate the potential of each creative accounting method in hotels, and to evaluate the impact of each creative accounting method on the quality of the financial statements. The researchers hoped that this study would shed some light on Jordan's hotel industry.
The purpose of this paper is to address the expectations of enhancing the quality and compatibility of accounting education in Jordan with labor market requirements. To accomplish this goal, a questionnaire was circulated to a group of (100) employees. The researchers used the questionnaire to assess the views of the survey group, having studied the scholarly literature on the topic of the study, whether it was given in sources or in scientific journals and theses. This research is an exploratory, empirical study which uses the methodology of data collection and interpretation to draw conclusions. The findings indicate that the content of the study plans is firmly and statistically substantially related to labor market requirements. Either after the expertise and specialization of the teacher. The research leads to debates on accounting education issues in particular accreditation challenges and a clear regulation of the academic interaction with the practice.
In order to further develop the theoretical basis of environmental management accounting (EMA), a contingency perspective is used in this paper to explain the initial implementation and design of EMA in firms, based on internalities as well as externalities. Nine variables have been identified to impact EMA either via push or pull mechanisms. A integrative model of these pull and push factors is the outcome of two large-scale triangulated case studies that were conducted within the global companies Borealis Group and Puma SE based on exemplary cases. Interviews with sustainability representatives and a discourse analysis of related press and media releases are included for triangulation. All the collected data were coded into nine a-priori variables, previously identified in a meta-analysis of existing literature. The following factors have a push influence on EMA: location, interdependence, availability of resources, ownership and control as well as uncertainty. In contrast, only three variables pull EMA into an organisation: the size, history and the organisation's strategy.