Sustainable Finance, ESG, and Innovation in Promoting Sustainable Economic Growth
DOI:
https://doi.org/10.54518/fid.1.1.2023.1192Keywords:
Environmental, Social, and Governance (ESG), Innovation, Sustainability, Sustainable Economic Growth, Sustainable FinanceAbstract
This study aims to examine the relationship between sustainable finance, Environmental, Social, and Governance (ESG), innovation, and sustainable economic growth through a Systematic Literature Review (SLR) approach. The review was conducted on various scientific literature published over the past five years and indexed in Google Scholar. The results indicate that sustainable finance has evolved into a strategic instrument that integrates economic, social, and environmental aspects into investment and business decision-making processes. The implementation of ESG has been shown to contribute to improved governance, risk management, organizational reputation, and the creation of long-term value. Furthermore, sustainable innovation plays a crucial role in enhancing the effectiveness of ESG implementation by developing more efficient and environmentally friendly solutions. Nevertheless, this study also identified several key challenges, such as differences in ESG measurement standards, limitations in sustainability performance evaluation, and the risk of greenwashing, which can undermine the credibility of sustainability practices. Overall, sustainable finance, ESG, and innovation are mutually reinforcing elements in achieving sustainable economic growth and creating long-term value for various stakeholders.
References
Awan, U., Kraslawski, A., & Huiskonen, J. (2017). Understanding the relationship between stakeholder pressure and sustainability performance in manufacturing firms in Pakistan. Procedia Manufacturing, 11, 768-777.
Berg, F., Kölbel, J. F., & Rigobon, R. (2022). Aggregate confusion: The divergence of ESG ratings. Review of finance, 26(6), 1315-1344.
Christensen, D. M., Serafeim, G., & Sikochi, A. (2022). Why is corporate virtue in the eye of the beholder? The case of ESG ratings. The Accounting Review, 97(1), 147-175.
Damanpour, F., Sanchez‐Henriquez, F., & Chiu, H. H. (2018). Internal and external sources and the adoption of innovations in organizations. British Journal of Management, 29(4), 712-730.
Eccles, R. G., Lee, L. E., & Stroehle, J. C. (2020). The social origins of ESG: An analysis of Innovest and KLD. Organization & environment, 33(4), 575-596.
Edmans, A., & Kacperczyk, M. (2022). Sustainable finance. Review of Finance, 26(6), 1309-1313.
Flammer, C. (2021). Corporate green bonds. Journal of financial economics, 142(2), 499-516.
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: aggregated evidence from more than 2000 empirical studies. Journal of sustainable finance & investment, 5(4), 210-233.
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of corporate finance, 66, 101889.
Le, T. T. (2022). How do corporate social responsibility and green innovation transform corporate green strategy into sustainable firm performance?. Journal of Cleaner Production, 362, 132228.
OECD. (2021). OECD green growth indicators 2021. OECD Publishing. https://doi.org/10.1787/1f9c71c4-en
Schoenmaker, D., & Schramade, W. (2018). Principles of sustainable finance. Oxford University Press.
United Nations. (2020). The sustainable development goals report 2020. United Nations. https://unstats.un.org/sdgs/report/2020/
Velte, P. (2022). Archival research on integrated reporting: a systematic review of main drivers and the impact of integrated reporting on firm value. Journal of Management and Governance, 26(3), 997-1061.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Muhammad Zaky Afkar Al Hazmi
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
