Olaf Weber

This paper examines the influence of population density, economic growth, and regulatory quality on the environmental performance of five SAARC countries from 2000 to 2020. To this end, fixed and random effects models are used. Quantitative data on socio-economic and environmental characteristics reveals notable differences across countries. The results show a significant positive and negative impact of the covariates economic growth and population density, respectively, on environmental performance. While the estimated coefficient of the regulatory quality variable was positive, it was statistically insignificant. The results also suggest a significant inter-country dependency and a significant change in environmental performance across countries over time. Based on the results, several strategic approaches are proposed at both individual and multi-country settings. Furthermore, we emphasize the roles of the government, international and regional agencies, private sector, and civil society organizations. Finally, possible extensions of the present paper are discussed.

Research on sustainable finance has experienced significant growth in recent years, but the exploration from a comprehensive perspective is still in its nascent stages. As of July 2023, our research revealed that this area remains relatively underexplored in the existing body of knowledge, leading to a notable lack of comprehensive research analyzing the current state-of-the-art in the social finance arena. To address this gap, our study takes a pioneering approach by utilizing scientometrics and network analysis techniques, specifically employing VOSviewer and Bibliometrix in conjunction with Web of Science and Scopus databases. By merging data from both sources and removing duplicate entries, we established a consolidated database of 401 relevant studies. Through our analysis, we have identified prominent authors, sources, and the most influential studies in the social finance arena. Additionally, we examined the coupling of studies and authors to ascertain their significance in this emerging domain. The results have unveiled several prominent further research, including mainly social banking, Islamic finance, social innovation, the impact of the COVID-19 pandemic, impact investing, social impact bonds, and Sustainable Development Goals. By shedding light on the current landscape, our findings comprehensively understand the field’s progress and potential directions. This insight is valuable for market participants, researchers, policymakers, and decision-makers seeking to navigate and contribute to the evolving landscape of sustainable finance with a social focus. Furthermore, our innovative use of scientometrics and network analysis sets a precedent for future research exploring the complex interplay between finance, development, and sustainability.

This study examines the relationship between environmental, social, and corporate governance (ESG) and firm performance, with a focus on the impact of Buddhism. Our findings suggest the following: (1) The local Buddhism environment weakens the positive relationship between ESG and firm performance, indicating that ESG practices motivated by internal altruism may not contribute to firm performance. (2) The moderating effect of Buddhism is more pronounced in firms with stronger alignment or monitoring, in which ESG practices are more likely to be motivated by the desire for profitability, i.e., privately owned firms and those with higher institutional ownership and media attention. (3) The attenuating effect of Buddhism’s moderating role is observed in two categories of firms: those with heightened exposure to ESG-related risks and those operating in recent eras with a greater focus on ESG, which are more likely to benefit from ESG practices with greater external utility.

Extant literature reveals limited examination of risk management strategies and tools to support decision-making for sustainable water management in the private sector in Ontario, Canada. Moreover, a gap persists in understanding how water risks are prioritized and managed in the private sector. Addressing these gaps, this transdisciplinary study applied a novel normative-analytical risk governance theoretical framework to water security risks, which combines analytical risk estimation with normative priorities and insights of practitioners, to examine contextually-attuned water risk management strategies and develop a decision-support tool. Using mixed methods, the study first employed a survey to elicit practitioner priorities for seven water risk indicators and investigated water risk management approaches. Then, interviews were conducted to obtain in-depth understanding about the priorities, strategies, opportunities, and role of trust in water risk management. The study found that a combination of regulatory, voluntary, and multi-stakeholder participatory approaches is needed, contingent on the severity of water risks, sector, location, and context. Moreover, the criteria of flexibility, efficiency, strategic incentives, and economic and regulatory signals, are essential. Finally, using secondary data analysis, the study integrated interdisciplinary risk data with practitioner priorities to develop a first-of-a-kind decision-support tool for water risk management in Ontario, ‘WATR-DST’. WATR-DST is an automated tool that applies the study’s findings and assists multi-sector water-related decisions, practices, and investments by providing contextually-attuned risk information in a user-friendly format. Based on the user inputs (location, sector, and source type), it displays the severity of seven water risks, qualitative themes under public and media attention, and recommends water risk management strategies. Thus, the study contributes to knowledge in sustainability management, risk analysis, and environmental management by demonstrating the novel application of the normative-analytical framework for water risk management in the private sector. WATR-DST is a key contribution envisioned to improve multi-sector water-related decisions in Ontario.

As primary users of a socially, economically, and environmentally significant yet increasingly stressed resource like water, the corporate and financial sectors have an important role in sustainable water management. However, extant literature reveals a gap in the empirical assessment of water risk perception and its influence on water risk evaluation and decision-making in the corporate and financial sectors. Our explanatory sequential mixed methods study examined the relationship between water risk perception and risk evaluation (risk ratings), addressing these gaps. We employed a cross-sectional survey (N = 25) followed by semi-structured interviews (N = 22), with a purposive expert sample of analysts, practitioners, and decision-makers in the corporate and financial sector in Ontario, Canada. Our study finds multi-dimensional risk perception factors, including knowledge, professional experience, perceived controllability, values, trust, location, and gender, that influence water risk ratings and vary with the type of risk. Moreover, the in-depth follow-up interviews reveal multiple drivers of different risk ratings, such as proximity bias, sector differences, trust in various institutions, as well as the influence of tacit knowledge, exposure, the role of regulations, media, and financial materiality. Our study empirically concludes that the water risk perception of analysts, practitioners, and decision-makers in the corporate and financial sectors is highly nuanced and impacts the evaluation of different water risks, and should be systematically integrated into risk assessment and decision-making frameworks. Our study advances knowledge in the fields of risk analysis and sustainable water management and contributes by empirically examining and explaining the complex and underexplored relationship between water risk perception factors and evaluation using novel interdisciplinary Risk Theory and mixed methods approaches. Finally, the study’s findings can help integrate sector and location-specific preferences and priorities with analytical data to design contextually-attuned decision support tools for sustainable water management strategies, policies, and practices.

Textile waste is a new waste category, and there is a lack of research on the quantity and quality of textiles in the municipal waste stream. Textile quality analysis (i.e., the condition of the item and its fibre content) is particularly time-consuming and requires specific textile and grading knowledge; however, it is essential in determining possibilities for reuse and recycling. Likewise, there is a lack of methods for conducting textile waste assessments. This study presents a novel procedure for assessing textile waste, starting with a definition of textile waste from the perspective of the circular economy and waste management. The assessment procedure uses textile collectors for categorizing and grading textiles, and categorizes textiles into six categories and 44 sub-categories. The researchers analyzed 1767.6 kg of textile waste or 10,716 items, collected from Ontario municipalities over three periods from 2019 to 2020. Textiles made up 4.4% of the residential waste stream. Based on 2018 data on Canadian waste generation, we estimate that Canada-wide, this would result in 462,704 tonnes of textile waste, or 12 kg of textile waste per person. We found that 65% of this waste could be reused, and 21% recycled. Diverting this waste would result in large environmental benefits and economic savings. Currently, managing this waste is expensive and represents a missed opportunity to utilize materials that could have either been reused or recycled. We conclude that there are opportunities for increasing the circularity of textiles through various waste diversion programs in Ontario.

A common topic of debate in academic scholarship on impact, ethical, and responsible investing is definitional clarity around the motivations and applications of each form of investment strategy. We ask, how does the subfield of impact investing differentiate itself from more established ethical and responsible investing – and do these differences necessitate yet another field of study? Adopting a combination of bibliometric and content analyses, we identify four distinct features of impact investing – positive impact targeting, novelty of governance structures, long time horizons, and the importance of philanthropy.

After a short overview about the history of sustainable banking, the chapter discusses the business case of sustainability and the sustainability case of business in the banking sector. Based on this distinction, we introduce sustainable banking products and services, such as green mortgages and green and sustainability linked bonds. The chapter then provides an overview about the literature on the connection between sustainability performance and corporate financial performance (CFP). Finally, the chapter provides some closing remarks about the evolution of the concept of sustainable banking from the origins to the future challenges.

The private capital asset class has grown to over $10 trillion in assets under management and has significant
potential to contribute to environmental, social, and governance (ESG) goals. However, there is a dearth of
academic research about ESG with regards to private capital investing. This literature review adopted a
mixed-methods approach, combining a quantitative (bibliometric) analysis with a qualitative review of the
articles. It was found that less than 1% of the literature, written in English, between 1960−2020 on private equity
and venture capital addresses topics related to sustainability. It was also observed that the 46 papers which
address sustainability topics can be categorized into 13 themes, including certifications and standards, impact
investing, and corporate social responsibility. Investment in private securities grew at twice the rate as public
securities during the end of this time-period and interest in sustainability integration in private capital investing
is growing. Incentives for private equity and venture firms to engage with sustainable investments are being
driven by institutional investors, such as pension funds and insurance companies. The focus of sustainability
research has typically been on public markets, hindering the potential of private capital investment to influence
sustainable policy and practices. The objective of this paper is to provide evidence of the dearth of academic
literature on the topic of private capital markets and sustainable investment, while identifying current themes in
the existing literature so that future work may address gaps in research.

Artificial intelligence (AI) for sustainable finance has been increasingly employed over the past several years to address the sustainable development goals (SDGs). Two major approaches have emerged: institutional and societal AI for sustainable finance. Broadly described, institutional AI for sustainable finance is used for activities such as environmental, social and governance (ESG) investing, while societal AI for sustainable finance is used to support underbanked and unbanked individuals through financial inclusion initiatives. Despite the growing reliance on such digital tools, particularly during the coronavirus disease 2019 (COVID-19) pandemic, governance mechanisms and regulatory frameworks remain fragmented and underutilized or inhibit progress toward the 17 UN SDGs. While major proposals and reports were released by standard-setting and regulatory bodies leading up to 2020, the COVID-19 pandemic indeed caused major setbacks to adoption and implementation, which in turn have also resulted in inconclusive data and lessons learned. As the global community begins to navigate out of the pandemic, policy makers, through multilateral and cross-sector agreements, are looking to renew governance mechanisms that mitigate new and pre-existing risks while cultivating sustainability and facilitating innovation.

This study aimed to examine the effect of Chinese carbon regulatory policy on the debt financing costs of carbon-intensive corporations. We use a large sample covering the years between 2005 and 2018. The results of the difference-in-differences approach show that creditors increased debt financing costs for carbon-intensive corporations considerably due to the low-carbon policy, hence decreasing these corporations’ profitability and value. Additional analyses show that the dynamic policy effect gradually increased from 2010 on and weakened later in 2015 owing to China’s economic slowdown and the local stock market crash. The impacts of low-carbon policies on corporate debt financing costs are more pronounced for state-owned corporations and those with low analyst followings. Our findings provide corporations and governments with crucial insights into mitigating climate transition risk.

The Province of Ontario in Canada illustrates contemporary water security issues, where despite perception of water abundance, water challenges arise locally. Water risks stem from biophysical dimensions of groundwater depletion, low surface water flows, and degraded quality, and, contextual dimensions of regulatory uncertainty, public concerns and perception. While academic, policy, and practitioner interest is growing, literature reveals major gaps in comprehensive assessment of multidimensional water risks at the subwatershed scale. Addressing these gaps, the study developed a locally attuned and interdisciplinary water risk assessment framework. Using secondary mixed data analysis, the study integrated quantitative and qualitative data for water quantity and quality risks, regulatory trends, water user conflicts for 38 subwatersheds in Ontario. The framework identifies subwatersheds and sectors at high, moderate, and low risk along with media and public concern themes. The study finds high and moderate risk potential in at least 50% of studied subwatersheds for all water risk indicators and challenges the myth of water abundance in Great Lakes watershed of Ontario. The study advances knowledge in water risk assessment by applying social-ecological perspectives, interdisciplinary approaches of Risk Theory, and mixed methods to provide a comprehensive evaluation of water security and demonstrates integration of social science perspectives in the field of sociohydrology. Our framework assesses interdisciplinary water risks to inform multisector sustainable water management decisions. While spatially scoped to populous subwatersheds of Ontario, this framework can be methodologically generalized to other geographical regions by using local data.

Textile waste is a new waste category, and there is a lack of research on the quantity and quality of textiles in the municipal waste stream. Textile quality analysis (i.e., the condition of the item and its fibre content) is particularly time-consuming and requires specific textile and grading knowledge; however, it is essential in determining possibilities for reuse and recycling. Likewise, there is a lack of methods for conducting textile waste assessments. This study presents a novel procedure for assessing textile waste, starting with a definition of textile waste from the perspective of the circular economy and waste management. The assessment procedure uses textile collectors for categorizing and grading textiles, and categorizes textiles into six categories and 44 sub-categories. The researchers analyzed 1767.6 kg of textile waste or 10,716 items, collected from Ontario municipalities over three periods from 2019 to 2020. Textiles made up 4.4% of the residential waste stream. Based on 2018 data on Canadian waste generation, we estimate that Canada-wide, this would result in 462,704 tonnes of textile waste, or 12 kg of textile waste per person. We found that 65% of this waste could be reused, and 21% recycled. Diverting this waste would result in large environmental benefits and economic savings. Currently, managing this waste is expensive and represents a missed opportunity to utilize materials that could have either been reused or recycled. We conclude that there are opportunities for increasing the circularity of textiles through various waste diversion programs in Ontario.

This study describes and analyses the research hotspots and evolution trends in climate finance research. Seven literature clusters that elucidate how different perspectives constitute the research landscape in climate finance and two main research hotspots that form the climate finance domain are identified. The empirical results also show that the research priorities of climate finance are still less “finance-based”. In the future, finance scholars should pay more attention to the financial dimension of climate finance. Finally, the research gaps within the existing climate finance literature are identified, and 35 research questions for future research are proposed.

Canada as an oil and gas producing nation will play a definitive role in the transition to a carbon-constrained world. Yet, Canadian climate policy continues to prop the ailing oil and gas industry with supply-side policies that enables the continued expansion of fossil fuel production. This study examines the role of financial actors as high-leverage intervention points that may be used to limit the production and expansion of Canada’s fossil fuel industry. Using a combination of network modelling, sensitivity analysis, and a novel scoring tool, we find that equity ownership in Canada’s largest fossil fuel firms is increasingly concentrated among a small subset of predominantly foreign and corporate equity owners. Moreover, the high debt load of fixed assets make Canadian fossil fuel firms particularly sensitive to shareholder intervention. The findings suggest that prominent shareholders are unlikely to use their voice to curtail carbon emissions in Canada’s fossil fuel industry, unless mandated to do so. Thus, the study concludes with important policy insights, to drive effective decision making and change.

Climate risks and climate risk-related policies on carbon threaten the ability of economies to thrive and will impact the credit risk of many sectors, primarily high-emitting sectors. Higher credit risks will also affect lenders if their credit portfolios are exposed to climate change risks. The introduction of carbon pricing policies will exacerbate this threat in resource-based economies such as Canada. While some research exists on climate exposure and risks to lending portfolios, there is a knowledge gap on how carbon pricing impacts individual commercial credit risk. Consequently, this study analyzes the effect of different carbon pricing scenarios on Altman’s z-score. Using the Canadian TSX 260 data between 2010 and 2020 as a sample, this paper applied the costs of different carbon prices using the Canadian Government’s carbon price regime of $0 to $170 to analyze Altman’s z-score variables until 2030. The results suggest that carbon price will significantly impact the credit risk of companies in high-emitting industries, such as the energy sector. We conclude that climate policy exposure in the form of carbon costs will have a real impact on credit risk and that lenders must consider carbon emissions as part of their credit risk assessment.

As climate change becomes firmly acknowledged as a financial risk, shareholders must consider corporate GHG performance to inform responsible investment decisions. To mitigate future climate risks, prospective benchmarks based on corporate climate mitigation targets are increasingly demanded by shareholders. However, existing benchmarks often lack sufficient sectoral coverage or fail to appropriately harmonize target metrics, scope, and corresponding timeframes. A harmonization process was developed which allows the calculation of sector-level prospective GHG benchmarks in terms of absolute or intensity GHG metrics. This process was applied to harmonize scope 1 and 2 emission targets of 1697 companies reporting in 2018 CDP questionnaires across 13 sectors using 2017 as the common reference year. Results indicate the importance of using a sectoral approach and applying a common reference year to avoid considering reductions occurring before the target was launched due to company choice of target reference year. In 2030, the lowest and highest median reduction rates values are −9% and −36% for fossil fuels and power generation sectors respectively. The findings obtained strongly suggest targeted percentage of reductions should not be the only metric considered when comparing corporate climate mitigation targets amongst peers. Target progress when the target was announced and at a common reference year was found to be an important metric to assess potential greenwashing or poor ambition. In 14% of cases, targets were already achieved when company launched them.

Investors have a central role to play in sustainability transitions, due to their inordinate influence on the governance of the fossil fuel extraction industry. Using network analysis, this paper links fossil fuel firms to equity owners, by distinguishing ownership characteristics of top shareholders and establishing a ranked list of the most prevalent shareholders based on emissions potential and network centrality. Our study reveals that among the most prevalent owners, are government signatories of the Paris accord and prominent American investment managers. We conclude that a concentrated number of investors have the potential to influence the strategic direction and governance of these firms and should consequently be held accountable for financing the economic activities that contribute to climate instability. This paper directly contributes to the fragmented body of academic research on financial systems and sustainability transitions.

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.

Multinational financial corporations are key to sustainability by implementing practices disclosed through sustainability reports. This is where research has been focused, leaving a gap concerning their sustainability foci on developing countries. This article studies the largest financial corporations from developed and emerging countries identifying the SDGs on which they focus in developing countries, the evolution of their contributions and differences in the SDGs, and where their focus is in the developing world. The largest multinational financial corporations were selected, their sustainability reports assessed, and mixed methods conducted finding that the foci of those from developed countries vary across SDGs, countries of origin, impacted developing countries, and since the launch of the SDGs. Findings highlight the SDGs on which financial corporations focus, with those from developed countries implementing more practices than those from emerging economies, and that the contributions of multinational financial corporations have not affected the progress of the SDGs.

Housing plays an essential role in sustainable governance due to its socio-economic and environmental connection. However, the relationship between governance policies, market behavior, and socio-economic outcomes varies geographically and demographically. Therefore, segregated policies developed and implemented may fail to achieve their desired objectives because of the sensitivity of housing policies for their connection to human wellbeing. The effectiveness of housing policies in geographically connected regions is one of the areas that has received little attention in the Canadian context. The study follows a multi-step empirical method using a multiple linear regression model and a difference-in-difference approach to assessing the geographical variation of speculation and property taxes on housing markets. The study confirms that speculation taxes are not an effective tool in curbing house prices. Similarly, considering the role of property taxes in providing public services, delinking property taxes from a potential contributor to house prices would provide a better lens to develop local housing policies. Furthermore, the study also confirms that the housing market can be better assessed at a local scale, considering geographical influence in conjunction with investment trends.

This study examines whether the green bond policies of major Chinese financial regulators’ have a direct and positive impact on the green bond market. Using Chinese green bond issuances from 2012 to 2019, we analyze green bond issuer response to top-down regulatory policies post 2014. Using a difference-in-difference model, we find a direct positive influence of green bond regulatory policies on issuance amounts. Additional analysis shows that specific issuer characteristics like ownership type (government-owned), industry type (green industry), and sector type (financial issuer) have a stronger positive reaction to policy announcements and led to the issuance of more green bonds. Our results highlight the supporting role of financial regulators in advancing the green finance agenda in China.

A person’s fashion interest describes how familiar a person is with fashion. There are major differences among consumers in terms of fashion interest that can be used as a segmentation criterion for markets. Understanding the drivers of clothing consumption can be used to develop strategies to address consumption habits, including overconsumption. Consequently, many studies have developed questionnaires and interview guidelines to define fashion interest or other fashion-related attitudes and behaviors. However, there is a gap in research about validating fashion scales. This study validates a fashion interest scale by comparing a random sample with a control group of fashion students, demonstrating differentiation between groups. We used principal component analysis (PCA) to explore the scale’s homogeneity and t-tests and analysis of variance (ANOVA) to validate the scale. The results suggest that the scale is homogeneous and has high validity. We conclude that the scale can be used as a tool to segment markets to gain faster and higher quality data and as a benchmark for other studies.

It is discussed intensively whether divestment decease sales in the fossil fuel industry or whether investors divest from the fossil fuel industry because of stranded assets. Furthermore, it is unclear what the consequences of these activities are for the fossil fuel industry. Therefore, the study explores the direction of causality between cash flow factors, such as production factors and sources of financing and sales of the fossil fuel industry using lagged regression models and applying the Granger causality test. Our sample consists of fossil fuel companies from the Carbon Underground 200 list. Because R-squared values for both lagged financial factors and lagged sales were similar, we suggest a “bi-directional causality” between the financial flow factors and sales. We conclude that divestment (because of ethical concerns) can cause lower sales and that lower sales can cause divestment because of fear of the risk of stranded assets. Because a third factor usually causes bi-directional causations, we conclude that the need for the fossil fuel industry to reduce greenhouse gas emissions is the third factor that influences both the ethical and financial motivation of divestment. Consequently, the study contributes to theoretical approaches to divestment.

This study analyses how equity funds react to institutional pressure related to green finance. Based on the analysis of 378 open-end equity funds in China from 2010 to 2019, we examined the environmental performance of fund holdings to measure their level of green investment. In our analyses, we distinguished between funds with positive and negative screening strategies. Our results indicate that the funds’ green investments are gradually increasing. Furthermore, we found that green investment strategies help to increase the funds’ excess return. The positive connection to financial returns, however, is only valid for funds with negative screening strategies. Finally, we found that fund investors react negatively to funds using positive screening to identify green investments. The study contributes to theoretical and practical knowledge about factors influencing equity funds’ green and financial performance.

Amidst the global COVID-19 pandemic, the term resilience has gained significant momentum in global news and management studies. Although scholars from different domains have investigated resilience, there is a need to provide clarity on its definitions and assessment (Anderson, 2015). This paper provides a conceptual review on resilience and explores business resilience as a framework to guide sustainability strategy by mitigating social and environmental risks. The study contributes to the literature on resilience and tabulates the key definitions of business resilience covered in a sample of 80 peer-reviewed articles and books (Hillmann & Guenther, 2021; McKnight & Linnenluecke, 2017). We challenge the existing literature on adaptive capacity models that are short in anticipating unprecedented operational disruptions. To build business resilience we argue for the adoption of the Sustainable Development Goals (SDGs). Given their strategic outlook until 2030, the SDGs offer a framework for corporate sustainability that helps decision-makers within organizations identify social and environmental risks and establish business strategies that build resilience and meet the expectations of a firm’s diverse stakeholders.

Construction consumes more than 3 billion tons of raw materials globally each year. Adopting circular economy principles can help reduce waste and save more than $100 billion per year by improving construction productivity. This study’s overarching objective was to investigate the state of adoption of circular economy principles in the construction sector. A multiple case study approach was used, and adoption opportunities were investigated in a global scan of 81 companies implementing circular economy principles in the construction industry. A knowledge framework with 33 attributes was developed to classify the companies, and their initiatives were analyzed in terms of overall focus, lifecycle operations, and business operations. These companies were categorized into seven identified business types, and their adoption of nine major circular business models was evaluated. Opportunity gaps and areas for improvement were identified, and steps for accelerating the shift towards a circular economy in construction were suggested. Furthermore, specific opportunities and prospects were discussed for implementing a circular economy in the United States, Canada, and the European construction industries. Notably, this study fills a gap in the literature by providing empirical evidence of the state of adoption of circular economy principles in the construction sector. Presented findings can help both academics and industry practitioners understand the current state of adoption of circular economy principles by construction companies and accelerate steps towards circularity in construction. Furthermore, the present study highlights the current differences between circular economy in theory and practice.

Sustainability risks represent a significant concern for the banking industry. Consequently,
financial regulators created financial sector sustainability guidelines and regulations.
However, the effect of these policies on banks’ financial stability is unclear. Hence, this study
analyzes 149 banks in 17 countries in Latin America to explore the impact of financial sector
sustainability guidelines and regulations on the banking industry. We use the Z-Score to
measure the financial stability of banks in countries with and without financial sector
sustainability guidelines and regulations. Based on panel regression, our results suggest
significant differences between banks in countries with and without financial sector
sustainability guidelines and regulations. We conclude that sustainable finance regulations
promote financial stability as well as sustainable banking practices

(1) Background: Green finance standards have proliferated with much need for harmonization to accelerate global green financial flows. However, little is known on the nature of green finance standards that accelerates differentiation, rather than harmonization. Therefore, we embark to answer the question what the nature of green finance standards is and specifically how green finance standards have evolved in major economic systems driven by different actors and leading to differences and commonalities over time and environmental focus area. (2) Methods: To analyze the question, we build a model based on institutional and standards theory and apply text analysis and statistical methods to analyze 84 green finance standards issued from 1998 to 2020. (3) Results: we find clear evidence that green finance standards evolve depending on economic governance types (e.g., market-based, government-based and in weak institutional environments), environmental focus areas (e.g., pollution, climate, biodiversity) and depend on actors in government, intermediaries and developing financial institutions. We also show that this development has been dynamic over the last few decades. We further test and confirm three models of green finance standards: output-based, input-based and process standards that have evolved. With the findings, we aim to provide a better foundation for both research and policy in future green finance standard research, development and harmonization.

Practitioners and academics have been using different terms to describe investments in the sustainability context. The latest inflationary term is impact investments—investments that focus on real-world changes in terms of solving social challenges and/or mitigating ecological degradation. At the core of this definition is an emphasis on transformational changes. However, the term impact investment is often used interchangeably for any investment that incorporates environmental, social, and governance (ESG) aspects. In the latter instance, achieving transformational change is not the main purpose of such investments, which therefore carries the risk of impact washing (akin to “green washing”). To offer (re-)orientation from an academic perspective, we derive a new typology of sustainable investments. This typology delivers a precise definition of what impact investments are and what they should cover. As one central contribution, we propose distinguishing between impact-aligned investments and impact-generating investments. Based on these insights, we hope to lay the foundation for future research and debates in the field of impact investing by practitioners, policymakers, and academics alike.

Regional and spatial studies, such as urban planning, energy planning, and sustainable development, address the complexity of the inter-disciplinary relationship between subsystems and their components. Such studies require multidisciplinary concepts, varied lenses, and differentiating approaches and models to address the conflict between contextual sensitivity and universal applicability. This paper reviews the debate on the research approaches adopted in regional studies and initiated by researcher Ann Markusen, followed by a review of contemporary literature on the concept of fuzziness in the qualitative research. Markusen evaluated the conceptual fuzziness, empirical evidence, and policy dimensions of regional studies. The argument was based on three fundamental aspects of regional and urban development studies; strong contestation of phenomena, empirical evidence to support the concept, and collective action to deal with the problems under investigation. A conceptual fuzziness and the methodological weaknesses in the qualitative research, highlighted by Markusen almost two decades ago, persist in interdisciplinary qualitative research. In this study, we have dissected the concept of fuzziness to distinguish between Inherited fuzziness derived from the configurational complexity of a case and bequeathed fuzziness that could be transferred ahead due to a researcher’s methodological and perceptual weaknesses. Despite efforts made to address the relevance, reliability, validity, and replicability of the qualitative research, the field is still facing challenges from conceptual bias, methodological and operational constraints, empirical weakness, and prejudiced interpretation.

The sustainable development goals (SDGs) introduced by the United Nations in 2015 are a framework for a sustainable world. Corporations also use the SDGs as a guideline for corporate sustainability. Based on corporate sustainability theory and legitimacy theory, the paper analyzes whether and how firms communicate about the SDGs on social media to increase their legitimacy or because they are linked to the firms’ core business. The study analyzed more than 24,000 SDG-related tweets from Standard and Poor 500 companies. The results show that firms post tweets about the SDGs that are related to their core businesses and impacts. Hence, the SDGs are communicated in a way that addresses strategic corporate sustainability and social responsibility. These results contribute to the research by clarifying the role of the SDGs in regard to corporate strategy and legitimacy.

This study addresses the connection between financialization of real-estate, individual investment objectives, and urban sustainability. It uses a survey approach to explore the relationship between the financialization of urban development and its influence on urban sustainability in a developing country. We found that the respondents prefer to invest in real-estate to achieve a return on investment, rather than to build a house to live in. This behavior increases urban sprawl resulting in a slower occupancy growth rate and causes a delay in the provision of basic amenities, hence affecting urban sustainability. We conclude that it is necessary to create a balance between urban land development requirements for housing needs, investment requirements for revenue generation, and individual savings requirements. The study contributes to the literature on financialization by adding the view of individual private investors to the research that mainly addresses institutional investors.

The purpose of this study is to analyze the connection between the sustainability performance and financial performance of Bangladeshi banks to explore the impact of the Bangladesh Environmental Risk Management Guideline. We analyzed all 56 scheduled commercial banks that are currently operating in Bangladesh under the guidelines of the Central Bank of Bangladesh. Data for the sample has been collected from publicly available reports such as annual, sustainability, and corporate social responsibility (CSR) reports, disclosed sustainability and financial information on the banks’ websites, including all bank branches, and data published from the Central Bank. Data has been analyzed using panel regression. Our results indicate that higher sustainability performance creates a higher financial performance, and that bigger banks perform better with regard to sustainability than smaller banks. The analysis did not find, however, that higher financial performance influences the sustainability performance of the banks positively. Consequently, this research contributes to the research on legitimacy-driven behavior of Bangladeshi banks. This behavior rather leads to a reactive adoption of sustainability activities instead of proactive behavior.

Although climate finance tools like green bonds have been gaining popularity in academia, the research has been limited to examining the financial viability and performance of this market. We explore a different research avenue related to institutional dynamics that are driving this market at the country level and shaping its adaptive capacity to climate change. Our paper introduces a new conceptual framework by linking institutional isomorphism with adaptive capacity dimensions in the green bond market. Using a mixed methods exploratory approach, we apply our institutional pressure-adaptive capacity framework to India’s green bond market. Our results show that different social actors, ranging from formal institutions like regulators and investors to informal ones like advocacy groups, can play a key role in shaping the legitimacy of this market. By highlighting ‘invisible’ social norms such as awareness about climate finance, changing regulatory priorities and the institutional strength of social actors, we contribute to the literature on this topic. We also introduce the concept of a high priority social actor and conclude that varying degrees of institutional pressure from such actors will ultimately decide the growth and legitimacy of this integral climate finance market at the country level as well as influence its adaptive capacity response to climate change.

Water management is an important issue for the food and beverage sector. Global media reports about conflicts between industries and stakeholders about water resources that hurt the food and beverage industry. This study addresses the gap in the knowledge about the connection between water management performance and the financial performance of companies in the food and beverage industry that exists because of a lack of empirical studies in the field of corporate water management and financial performance. Using structural equation modeling to analyze secondary corporate social performance data from KLD-MSCI, secondary financial data from Compustat, and primary water management data, the results suggest that corporate social performance has a positive impact on water management performance and that water management performance influences the financial performance of the firms in the sample positively. We conclude that an inside-out approach of corporate social responsibility addressing material issues, such as water in the food and beverage industry, helps to increase the financial performance in this industry. Academically, we contribute to the knowledge about the connection between water management and financial performance in the food and beverage industry. Furthermore, our results can be used by policymakers to implement standardized water indicators for the food and beverage industry. Finally, businesses can use the results of the study to improve their water-related environmental performance.

Given growing anthropogenic pressures on water resources and uncertain climatic conditions, sustainable water management using effective demand management strategies will be crucial to tread the path towards sustainable development. This paper makes a contribution to the interdisciplinary realm of water management by designing a flexible tool that overcomes the weaknesses of current extraction charges and reliance on general taxes to finance water management initiatives. These dynamic water extraction charges are envisioned to be important policy instruments to increase water security in Ontario. To ensure sustainable use of provincial water resources, the province of Ontario not only extended the moratorium imposed in 2016 on new groundwater extraction permits for water bottling until 1st January 2020, but is also reviewing its water taking policies. While the moratorium and the extraction charge hike of $500/Million liters is focused on water bottlers, the need for more long-term comprehensive policy approaches to sustainable management is apparent. Economic theory suggests that pricing a resource by reflecting its economic value and scarcity can incentivize optimal consumption. While economic instruments like extraction charges exist in Ontario, a methodological calculation linking the level of these charges to the actual costs and hydrological water risks is largely lacking. Addressing this gap, this paper designs a calculator that operationalizes the conceptual pricing framework for Ontario to transparently arrive at water extraction charges. The public cost data for water resource management initiatives is considered along with extreme water contamination events as contingency environmental costs. Using data from Statistics Canada for annual volume of water withdrawn, the base provincial water extraction charge for all permit liable sectors is calculated to be $23.08/Million liters. Moreover, price multipliers reflecting the sub-watershed scale water quantity risks (identified in sub-watershed source protection assessment reports) along with sector and source specific risks were embedded in the calculator.

The Anthropocene era is characterized by a pronounced negative impact of human and social activities on natural ecosystems. To the extent finance, economics and management underlie human social activities, we need to reassess these fields and their role in achieving global sustainability. This article briefly presents the scientific evidence on accelerating impacts of human activities on nature, which have resulted in breach of planetary boundaries and onset of global climate change. It offers some potential leverage points for change toward sustainability stewardship by highlighting the important role of finance and economics in addressing climate change. We examine the role of financial stakeholders in addressing planetary boundaries and offer a modified stakeholder theory, from which we propose future directions for finance in the Anthropocene.

Several prominent institutional investors concerned about climate change have announced their intention or have divested from fossil fuel shares, to limit their exposure to the industry. The act of fossil fuel divestment may directly depress share prices or stigmatize the industry’s reputation, resulting in lower share value. While there has been considerable research conducted on the performance of the fossil fuel industry, there is not yet any empirical evidence that divestment announcements influence share prices. Adopting an event study methodology, this study measures abnormal deviations in stock prices of the top 200 global oil, gas, and coal companies by proven reserves, on days of prominent divestment announcements. Events are analyzed independently and in aggregate. The results make several notable contributions. While many events experienced short-term negative abnormal returns around the event day, the effects of events were more pronounced over longer event windows following the New York Climate March, suggesting a shift in investor perception. The results also find that divestment announcements related to campaigns, pledges, and endorsements all have a significant effect over the short-term event window. Finally, the results control for the general underperformance of the industry over the estimation window, attesting that the price change is caused by divestment announcements. Several robustness tests using alternate expected returns models and statistical tests were conducted to ensure the accuracy of the result. Overall, this study finds that divestment announcements decrease the share price of the fossil fuel companies, and thus, we conclude that ‘divestors’ can influence the share price of their target companies. Theoretically, the result adds new knowledge regarding the efficacy of the efficient market hypothesis in relation to divestment.

Given growing anthropogenic pressures on water resources and uncertain climatic conditions, sustainable water management using effective demand management strategies will be crucial to tread the path towards sustainable development. This paper makes a contribution to the interdisciplinary realm of water management by designing a flexible tool that overcomes the weaknesses of current extraction charges and reliance on general taxes to finance water management initiatives. These dynamic water extraction charges are envisioned to be important policy instruments to increase water security in Ontario. To ensure sustainable use of provincial water resources, the province of Ontario not only extended the moratorium imposed in 2016 on new groundwater extraction permits for water bottling until 1st January 2020, but is also reviewing its water taking policies. While the moratorium and the extraction charge hike of $500/Million liters is focused on water bottlers, the need for more long-term comprehensive policy approaches to sustainable management is apparent. Economic theory suggests that pricing a resource by reflecting its economic value and scarcity can incentivize optimal consumption. While economic instruments like extraction charges exist in Ontario, a methodological calculation linking the level of these charges to the actual costs and hydrological water risks is largely lacking. Addressing this gap, this paper designs a calculator that operationalizes the conceptual pricing framework for Ontario to transparently arrive at water extraction charges. The public cost data for water resource management initiatives is considered along with extreme water contamination events as contingency environmental costs. Using data from Statistics Canada for annual volume of water withdrawn, the base provincial water extraction charge for all permit liable sectors is calculated to be $23.08/Million liters. Moreover, price multipliers reflecting the sub-watershed scale water quantity risks (identified in sub-watershed source protection assessment reports) along with sector and source specific risks were embedded in the calculator.

Small- and medium-sized enterprises (SMEs) can play a crucial role in advancing environmental and social well-being. Yet various—often conflicting—explanations have been offered to clarify why SMEs pursue sustainability. Some arguments foreground possibilities of profit maximization, whereas others emphasize individual values and convictions. Research supporting such contradicting explanations is often biased towards large enterprises or small, innovative frontrunners. In this article, we examine the underlying drivers of social and environmental interventions of SMEs by exploring empirical data from a survey of over 1,600 Canadian SMEs and complementary in-depth interviews. We argue that sustainability actions of SMEs can be understood by viewing these firms as social actors—organizations that are shaped by individual values, internal and external interpersonal relationships, and are embedded in a social environment. This conceptualization directs attention to the full range of factors that shape sustainability engagement of SMEs and highlights frequently overlooked forms of sustainability-oriented actions.

Fossil fuel divestment is discussed controversially with regard to its financial consequences and its effect on decarbonizing the economy. Theory and empirical studies suggest arguments for both financial underperformance and outperformance of divestment. Therefore, our first research objective is to understand the financial effect of divestment. The second objective is to analyze the influence of divestment strategies on the carbon intensity of portfolios. Empirically, our analysis is based on the Canadian stock index TSX 260 for the time between 2011 and 2015. The results of the study suggest higher risk-adjusted returns and lower carbon intensity of the divestment strategies compared with the benchmark. We conclude that divestment is not only an ethical investment approach but also that it is able to address financial risks caused by climate change and, at the same time, is able to reduce the carbon exposure of investment portfolios.

This study explores China’s green credit policy from a credit risk perspective. Green finance has been growing rapidly in China since the government issued its Green Credit Policy. The objective of this study is to explore whether green loans are less risky than non-green loans. Based on a five-year dataset of 24 Chinese banks, we used panel regression techniques, including two-stage least square regression analysis and random-effect panel regression to examine whether a higher green credit ratio reduces a bank’s non-performing loan ratio (NPL ratio). The results suggest that allocating more green loans to the total loan portfolio does reduce a bank’s NPL ratio. We conclude that institutional pressure by the Chinese Green Credit Policy has a positive effect on both the environmental and the financial performance of banks. The study contributes to the literature on the correlation between green lending and credit risks, as well as to the literature on the impact of institutional pressure on environmental and financial risks.

The food and beverage industry is one of the most water intensive industries. Therefore, an effective and efficient water management, based on eco-system related indicators, is crucial. This study analyzes the connection between indicators that address sustainable water management as a subgroup of ecosystem management and the general corporate social performance of firms. The study explores which water eco-system indicators are used in the food and beverage industry to assess corporate water risk management. Secondly, we analyzed the relationship between corporate water risk management and overall corporate social performance. Based on an analysis of 61 firms in the food and beverage sector, our results suggest that the most used indicators were Operations’ Dependency on Freshwater, Change in Water Supply, Use of Water in the Facilities, Collaboration with Communities, and Water Risks for Agricultural Inputs. Indicators addressing an insideout perspective, such as Impacts on Communities were less often used. Furthermore, we found that the firms’ general corporate social performance, measured by MSCI KLD-ESG indicators, is a good predictor for their use of water indicators. We conclude that the firms in the sample follow an outside-in approach for their water management activities and that water management is a significant part of corporate social responsibility activities in the sector because the business performance of food and beverage firms is interwoven with their water management activities.

Divestment from the fossil fuel industry is campaigned as a means to address carbon-induced anthropogenic climate change, much like the anti-Apartheid divestment movement that was campaigned as a mean to address the country’s human rights violations. However, there is a gap in current literature that objectively compares the similarities and differences between the two campaigns. Discrepancies may arise from an evolving understanding of what constitutes a socially responsible investment or the underlying strategy and intended outcomes of the campaigns themselves. Through a comparative content analysis this paper identifies differences and similarities of both campaigns.

This paper examines whether gold is a hedge or a diversifier for socially
responsible and conventional investment in Korea. To answer this question, daily
returns between January 2006 and December 2015 were analyzed. This time span
included the implementation of the Korean Green New Deal. The autoregressive
distributed lag method was used to analyze the daily returns for socially responsible
investment, conventional investment, and gold. The results suggest that gold is a strong
diversifier, but a weak hedge, for socially responsible investment and conventional
investment in Korea. For the sub-period, including the 2008 financial crisis, no
evidence of gold being a safe haven was found. Furthermore, the study found that neither
negative nor positive shocks have a significant impact on the volatility of the Dow Jones
Socially Responsible Investment Index Korea. However, positive shocks contribute to
volatility in the first sub-period between 2006 and 2010, and negative shocks contribute
to volatility in the second sub-period between 2001 and end of 2015.

Purpose
This paper analyzes the connection between the sustainability performance of Chinese banks and their financial indicators to explore whether sustainability regulations can be implemented without decreasing the financial performance of the banking sector.

Design/methodology/approach
The study examined reports and websites of Chinese banks, categorized different corporate sustainability aspects and conducted panel regression and Granger causality to analyze cause and effect variables.

Findings
The environmental and social performance of Chinese banks increased significantly between 2009 and 2013. Furthermore, a bi-directional causality between financial performance and sustainability performance of Chinese banks has been found. Based on institutional theory, this interaction may be influenced by the Chinese Green Credit Policy.

Research limitations/implications
The findings suggest that corporate sustainability performance and financial performance are not a trade-off but correlate positively. Further research is needed to analyze the effect of financial regulations, such as the Chinese Green Credit Policy.

Practical implications
According to the good management theory by Waddock and Graves (1997) that claims a positive impact of corporate social performance on financial performance, Chinese banks can invest in corporate sustainability to increase their financial success and re-invest parts of the additional returns – also called slack resources – in sustainability activities.

Social implications
Chinese banks are able to influence the economy to become greener and less polluting without sacrificing financial returns.

Originality/value
This is the first study to explore the sustainability performance of Chinese banks, including their products and services.

This study analyses the reporting of Equator Principles Financial Institutions (EPFI). The Equator Principles are a voluntary code of conduct, providing guidelines for assessing, managing, and reporting environmental and social impacts in project finance. The objective of the study is: 1) to understand, whether EPFIs follow the Equator Principles reporting guidelines; 2) to assess the quality of the mandatory reports of the EPFIs; 3) to analyse causes for differences in reporting. Because the Equator Principles are a voluntary code of conduct, or a so-called soft law, the research has been based on institutional theory. Our results suggest that though EPFIs follow the reporting guidelines, only about 5% disclose all the information required by the guidelines and consequently achieve the highest score with respect to their reporting quality. Furthermore, differences in reporting quality are mainly caused by the size of the EPFIs. The larger the EPFI with respect to its total assets the higher is the reporting quality. We conclude that further mechanisms, such as standardisation and assurance, are needed to guarantee transparent reporting of environmental and social project risks.

Building on longitudinal data from 73 Chinese manufacturing firms during 2009–2012,
we assess whether and how firms gain higher efficiency in achieving their sustainability goals by
adopting management practice standards (ISO 9001, ISO 14001, and/or OHSAS 18001). We propose
four pathways for firms to gain sustainability efficiency in their certification journey: participation,
qualitative integration, quantitative expansion, and temporal accumulation. Our results confirm that
firms certifying management standards gain higher efficiency in pursuing their sustainability goals
than firms without these standards. We also find some support for increased efficiency effect in firms
with diverse management systems over firms with only a single certificate in 2011. Finally, our results
highlight the experiential and temporal accumulation effect of such efficiency gains, that is, firms with
prior certification experience or having a longer certification history demonstrate higher efficiency
gains in pursuing their sustainability goals.

We analyzed the performance of an emerging market SRI index, the MSCI
SRI Emerging Market Index, with regard to its financial performance compared to
conventional indexes between June 2011 and December 2014 based on daily returns.
Our analysis suggests that the SRI index is ranked higher in terms of mean return than
most of the conventional emerging market portfolios. Generally, we found relative
stability in the performance and persistence for the SRI index whereby its performance
is indifferent from the market benchmark and no persistence can be found.
Furthermore, the results suggest that negative shocks have greater impact on the
volatility of the index than positive shocks. In general, it can be concluded that the
emerging markets SRI index has lower sensitivity to market return during bearish
condition.

The prominence of phosphorus (P) is represented by three major aspects: first and most important, P is essential for all life on Earth; second, no other element or substance can act as a substitute for P; and third, P is considered a non-renewable resource and thus finite. In regard to global food security and P as one of the three major macronutrients, the world faces an extensive challenge to utilize this finite and unsubstitutable commodity in the most effective as well as the most efficient way. Efficiency in general has increasingly become of major importance over the last several decades, especially within competitive commodities. Practically all PR used for chemical fertilizers originates from exploitable deposits that are concentrated in a rather small number of countries and mined vastly by only a limited number of global enterprises. Whereas these enterprises differ in factors such as size, vertical and horizontal integration, legal form, or type of ownership, their overall goal as corporations remains the same-the optimization of their operations. Consequently, firms can strive to (a) minimize their inputs at constant output levels; (b) maximize their outputs at constant input levels; or (c) increase their efficiency ratio by adjusting inputs and outputs at the same time. In contrast to the oil industry, the PR market is demand driven, which means that not everything that could be produced is immediately consumed. This study attempts to measure, compare, and analyze the technical efficiency performance of the major global corporations involved in PR mining by using the BCC (Banker, Charnes, and Cooper) and CCR (Charnes, Cooper, and Rhodes) models of data envelopment analysis. The analysis includes total technical efficiency as well as the disaggregated pure technical and scale efficiency and a breakdown of the factors accounting for inefficiency. The 24 firms included in the analysis account for 67.3% of the global phosphate rock ore capacity and 61.4% of phosphate rock concentrate capacity. Based on the BCC and CCR modeling a higher percentage (36% vs. 20% – Model 1; 36% vs. 10% – Model 2) of publicly quoted companies (such as PotashCorp) are classified as efficient compared to state-owned companies (such as OCP). However, the frequencies of efficiency performance do not differ in such a way that a Fisher Exact Test would suggest statistical significance for these data. This indicates that general assumptions regarding the different strategies of state-owned and publicly quoted firms are not necessarily valid.

Does the integration of environmental, social and sustainability criteria in commercial credit risk assessment processes create a benefit for lenders and does it improve the prognostic validity of the credit risk prediction? Some analyses have reported that a correlation exists between commercial borrowers’ sustainability performance and credit risks. We analyzed the role that criteria pertaining to sustainability and environmental orientation play in the commercial credit risk management process in Bangladeshi banks. Our results suggest that sustainability criteria improve the prognostic validity of the credit rating process. We conclude that the sustainability a firm demonstrates influences its creditworthiness as part of its financial performance. Consequently, lenders will benefit from implementing credit risk assessment models that integrate sustainability risks. By taking sustainability issues into account, banks will be able to avoid credit defaults on the one hand and to channel commercial loans to sustainability leaders on the other hand.

This study analyses the performance of the financial sector with respect to corporate social responsibility and sustainability. Because this sector has a strong influence economically and on sustainable development, both risk management issues and stakeholder pressure drive the financial sector into a more sustainable direction. In contrast to polluting sectors, the financial sector does not affect the environment and society by direct emissions or the use of resources like other industries. To compare the financial sector with other sectors regarding their sustainability performance, we analyzed the performance in the fields of sustainability reporting, business ethics and product responsibility, labor issues, environmental performance, community issues, and corporate governance. The study is based on more than 1800 firms including 400 organizations from the financial sector. We link CSR to sustainability and define it as corporate self-regulation in order to manage sustainability risks and opportunities. The results suggest that financial sector performance is relatively low regarding corporate social responsibility (CSR) in general. Weaknesses of the financial sector with regard to CSR are reporting, business ethics and product responsibility, and labor issues. Strengths of the financial sector regarding CSR can be located with respect to community relations. Further research is needed with respect to the factors influencing CSR performance. It is still not clear what influences regulations, stakeholder pressure or potential financial benefits have on sustainability performance in the financial sector. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.

What is the current state of environmental, social and governance (ESG) reporting and what is the relation between ESG reporting and the financial performance of Chinese companies? This study analyses corporate ESG disclosure in China between 2005 and 2012 by analysing the members of the main indexes of the biggest Chinese stock exchanges. After discussing theories that explain the ESG performance of firms such as institutional theory, accountability and stakeholder theory we present uni- and multivariate statistical analyses of ESG reporting and its relation to environmental and financial performance. Our results suggest that ownership status and membership of certain stock exchanges influence the frequency of ESG disclosure. In turn, ESG reporting influences both environmental and financial performance. We conclude that the main driver for ESG disclosure is accountability and that Chinese corporations are catching up with respect to the frequency of ESG reporting as well as with respect to the quality. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment

Does microfinance support the empowerment of female borrowers? Results of studies analyzing microfinance and empowerment delivered mixed results. In order to explore whether microfinance influences empowerment, the paper compares women in higher loan cycles of a Pakistani microfinance institution with those in the first loan cycle regarding their empowerment. Using a survey and multivariate statistical methods, such as propensity score matching, the study found that women in higher loan cycles were on a higher level of empowerment. We conclude that microfinance has an impact on the empowerment of female borrowers.

Over the past few decades, the financial sector has sought to positively contributing to sustainable development through innovative products and services. However, in its business-as-usual the financial sector continues to contribute to military interventions, environmental degradation, growing disparity of incomes, de-coupling of finance and real economy, and global economic crises. This article presents a framework of how to appraise the positive and negative contributions of the financial sector to sustainable development, from a systems perspective. On this base, the article proposes an approach for designing effective finance interventions to complex sustainability problems. Based on similar experiences from studies on water governance and technology development, the approach proposes a participatory procedure, first, to identify the role of the financial sector in complex sustainability problem constellations and, second, to develop intervention strategies for financial intermediaries interested in shifting their role and mitigating the identified problems. We discuss challenges of establishing causal links within the problem constellation, which is a prerequisite for successful intervention design, as well as in the cause–effect structure of the interventions themselves. The article concludes with outlining future research needs.

What indicators can be used to measure the impact of microfinance? Microcredit and its umbrella term microfinance significantly increased their popularity over the last years. Though some negative issues especially with respect to overindebtedness and high interest rates are discussed as well, microfinance is seen as an effective and innovative measure for alleviating poverty. But what is the outcome of microfinance? Does it really alleviate poverty? Does it outplay other measures of development aid? Which impact is most important (Hermes, Lensink, 2007b)?

2This paper describes concepts and studies that intend to measure the impact of microfinance. We will describe and exemplarily use methods of outreach measurement on the basis of mixmarket.org data. Outreach measurement is used in many studies on the impact of microfinance. In addition to this we will describe social cost-benefit analysis and we will introduce and discuss the social return on investment (SROI) concept as an alternative concept for measuring the impact of microfinance. The concepts will be applied to an imaginary microfinance institution, MicroImpact, to test whether and how they are applicable and what advantages and drawback of the concepts are. Let us start with a short description of microfinance and microcredit and its intended impacts. We will use the term microfinance for a group of products and services such as micro-loans, microcredit, or microsavings. Microcredit is used as a synonym for micro-loans.

With $16.2 billion of assets the Vancouver City Savings Credit Union (Vancity) has the largest asset base of any member of the Global Alliance on Banking and Values, a global association of ethical banks, and also has the largest asset base of Canada’s credit unions. This article analyses the social financing Vancity conducts and the disclosure of the social impact of the products and services they offer. The results suggest that they are on the path to realizing a 100% social finance portfolio but that they have not arrived there yet. In particular, their personal retail products and services still offer room for improvement. Furthermore, their reporting lacks an indicator based on comparative figures that would allow stakeholders to compare the impact of Vancity’s products and services  with those of other financial institutions.

How do Canadian banks integrate environmental risks into corporate lending and where are they located compared with their global peers? In this paper we report a mixed method analysis of the integration of environmental risks into the credit management. The qualitative and quantitative analyses suggest that all analyzed Canadian commercial banks, credit unions and Export Development Canada manage environmental risks in credit management to avoid financial risks. Some of the institutions even connect environmental and sustainability issues with their general business strategies. Compared with other countries, Canadian banks are best in class, as all six Canadian commercial banks, comprising over 90 percent of Canadian assets, systematically examine environmental risks for credits, loans and mortgages. We conclude that Canadian banks are proactive regarding environmental examinations of loans and that there is a need for a more accountancy related reporting on environmental risk management in financial institutions. Further research is needed to be able to calculate costs and benefits of integrating environmental and sustainability issues into the credit risk management. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.

The role of the extractive sector with regard to sustainable development is discussed controversially. On the one hand, it is argued that the sector’s adverse sustainability impacts outweigh its social and economic benefits and therefore the concept of socially responsible investment (SRI) is not applicable to the extractive sector. On the other hand, it is argued that the products from the extractive industries are essential for the world’s economy, that the sector contributes to poverty reduction and to economic development, and creates revenues for governments. Based on this discussion, we analysed whether there is a relation between sustainability performance and financial performance in the extractive industry sector, whether Canadian companies from the extractive sector perform differently than companies from other regions, and how a sustainability assessment can be integrated into project finance. Our results suggest that Canadian companies from the extractive sector perform well with respect to their financial return, but that they do not outperform their global peers regarding sustainability. Furthermore, we did not find a strong correlation between sustainability performance and financial performance. Thus, we conclude that socially responsible investors have to pick those companies that perform well regarding both sustainability and financial returns.

This paper explores social finance as a strategy for generating social innovations and, at the same time, financial returns. It explores why risk assessment for social finance is so challenging and suggests three sources of difficulty: setting boundaries, integrating heterogeneous values, and responding with sufficient speed and flexibility to support innovation. It suggests links between the seemingly distinct challenges of social finance being able to maximize its impact at different stages of the innovation process in a complex socio-ecological system, whilst also acting as a reframing agent in terms of the understanding of the system itself at other stages. Finally, this paper develops a new concept ‘developmental impact investing’ as a modified version of a portfolio strategy that uses a range of projects both to manage risk and to generate new knowledge about the complex systems in which the social finance attempts to create impact and innovation.