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The Rise of Environmental Investing: Innovative Financing for a Sustainable Future

Citation

Daugaard, D and Linnenluecke, M, The Rise of Environmental Investing: Innovative Financing for a Sustainable Future, Environmental Finance and Green Banking Contemporary and Emerging Issues, Routledge, S Sosnovskikh and S Alam (ed), United States ISBN 9781032072616 (2023) [Research Book Chapter]


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Abstract

Environmental Investing is key to supporting a sustainable future. The ways Environmental Investing can be carried out are rich and varied. Professional investment managers are particularly sophisticated in their implementation of environmentally aware investing. Examples include norms-based screening, positive screening, sustainability-themed investing and impact investing. The investment structures are also an exciting and evolving dimension. In addition to actively and passively managed environmentally aware mutual funds, the investment vehicles include green bonds and exchange traded funds. These investment activities are supported by environmental and investment ratings agencies. These agencies have developed focused metrics so investors can select those companies likely to have the best environmental performance.

There are significant challenges facing environmental investing. In particular, the heterogeneous nature of this sector of the industry, ongoing concerns over greenwashing, and the problems with ensuring successful environmental impact. Solutions are emerging to address these challenges. The availability of funds and instruments to reflect specific thematic approaches is resolving some of the heterogeneous needs of investors. Investor concerns over greenwashing has motivated the rise of independent ratings agencies. Increasing fund flows into environmental products is also helping to mitigate the problems facing the environmental investing industry. The future for this industry is very exciting. Further analysis and product development will improve the effectiveness and impact of environmental investing and continue to gain wide-spread investor support.

Item Details

Item Type:Research Book Chapter
Keywords:environmental investing, environmental finance, sustainability, responsible investing, ESG issues
Research Division:Economics
Research Group:Applied economics
Research Field:Financial economics
Objective Division:Commercial Services and Tourism
Objective Group:Financial services
Objective Field:Finance services
UTAS Author:Daugaard, D (Associate Professor Dan Daugaard)
ID Code:154221
Year Published:2023
Deposited By:Finance
Deposited On:2022-11-13
Last Modified:2023-01-06
Downloads:0

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