A SYSTEMATIC LITERATURE AND
COMMENTARY OF THE OBSERVATIONAL
LITERARY WORKS ON SUSTAINABILITY OF
FINANCING OF MARKETING PRODUCTS
Authored by
Dr. Sanket L. Charkha
Asst. Professor & TPO
Savitribai Phule Pune University
charkha.sanket@gmail.com
+91 9767419373
Prof. Mahesh G. Lagad
Asst. Professor
Savitribai Phule Pune University
lagadmahesh123@gmail.com
+91 8796253591
Abstract:
To attain prosperity via more sustainable, fair, and vigorous economic growth, one must not
overlook the role of financial capital, which is one of the most essential drivers of all
economies. The financial system (as the primary source of financial capital) must adapt by
adopting sustainability concepts and practises and incorporating them into all aspects of its
operations processes. The number of subjects relevant to "sustainable finance" continues to rise,
as the paper will show significance, and it is obviously becoming a hot topic on the agendas of
many governments, regulators, and international organisations, commercial enterprises, and
financial institutions, to name a few. The purpose of this article is to give a general overview of
the scholarly literature that covers themes connected to sustainable finance in a conceptual
and/or empirical way. We identify major emerging research trends in sustainable finance and
give a platform for academics to start creating their own research on the issue using a
bibliometric methodology and a dataset of 1724 research materials derived from Scopus
(covering the years 1991-2019).
Key Words: Sustainable Finance, Sustainable Development, Bibliometric Analysis
INTRODUCTION:
William D. Nordhaus and Paul M. Romer were awarded the Nobel Prize in Economic Sciences
in 2018 for combining innovation and climate change with economics growth. The prize was
granted a year later to Michael Kremer, Abhijit Banerjee, and Esther Duflo for "their innovative
strategy to addressing global warming" "Poverty" (a huge issue with several societal
consequences) implications). These contrasts underline the importance of Environmental and
social elements are extremely important and their ties to economic development. During this
time, the three fundamentals will be highlighted cornerstones of long-term viability.
When formulating and executing successful policies that aim economic development,
policymakers should not overlook the consequences on the environment or society. To attain
prosperity in a society through more sustainable, egalitarian, and vigorous economic growth,
one must not overlook the role of financial capital, which is one of the most essential drivers of
all economies. Indeed, according to Scholtens (2006, p. 19), "money is the lubricant of the
economy." As a result, it may have an impact on the firm's sustainability and social
responsibility." As the primary source of financial capital, the financial sector must adapt by
embracing sustainability practises and concepts and incorporating them into all of its internal
operations. In reality, while channelling their funds toward investment possibilities, all active
stakeholders in a particular economy (including financial institutions) must consider
environmental, social, and governance parameters.
The expanding number of studies and activities now focused on environmental quality clearly
demonstrates the importance of the problem at all levels of society (including the financial
dimension). Climate change and sustainability have gotten a lot of press across the world. In
face of contemporary events, topics relating to "sustainable finance" continue to develop in
quantity and importance, obviously becoming a hot topic on the agendas of many governments,
regulators, commercial entities, international organisations, and, not least, financial institutions.
MILESTONES OF THEORY
A review of the scholarly literature on Sustainable Finance (SF) indicates a diverse range of
definitions and interpretations. The term sustainability' is difficult to grasp on its own, as it
encompasses a broad range of concepts related to the mitigation of economic, social, and
environmental issues; according to Nierola et al. (2019), it encompasses "a broad range of
concepts related to reconciling economic, social, and environmental issues, such as with the
bio, green economy, or circular economies."
It is more difficult for practitioners and policymakers to put the notion into reality when it is
difficult to nail it down. A brief literature survey of SF is provided in this part, with the most
essential definitions and interpretations presented and analysed.
Haigh (2012) provides an overview of existing SF definitions, stating that "defining sustainable
and ethical finance but also investment" is "somewhat tricky," and that this is partly due to the
difficulty in defining its polar opposite, i.e. "what unsustainable and otherwise irresponsible
financing but instead investing behaviour might mean."
Jaeggi et al. (2018) suggest a larger and more exact definition of the word SF as a "collective
notion that covers sustainable finance initiatives" in their paper (2018, p. 59). Such solutions
are intended to reduce risks while maximising possibilities that arise from the interaction
between sustainability concerns and finance. SF is "about financial institutions tackling the
risks and possibilities associated to sustainability concerns such as climate change, water
shortages, and other systemic problems," according to the authors (2018, p. 60), which
outperforms long-term investing. Practitioners and academics alike frequently bring up the
latter term (sustainable investment) in debates about SF. According to Busch et al. (2016), this
idea refers to investments that aim to contribute to long-term sustainable development by
including long-term environmental, social, and governance aspects into their investment
decisions.
However according Amaeshi et al. (2007), SF arose at the centre of the corporate social
responsibility movement and was later referred to as'socially responsible investments,' 'green
banking,' (see also Apostoaie, 2018), and'responsible borrowing,' among other words.
Sandberg (2018) describes SF in a normative rather than descriptive manner, in the sense that
the author is less interested because of how the financial system operates now and more
preoccupied with how it should work in the future.
He begins by outlining the advantages and disadvantages of the mainstream financial theory,
which is based on neoclassical economics and laissez-faire politics.
Then he suggests a "two-level sustainable financing model." His main point on SF is that
financial actors should be free to pursue their profit or efficiency goals, but they must be aware
of and act on significant conflicts with society's common interests. Except in circumstances
with substantially mismatched incentives, public policy should promote market self-regulation
in such cases.
When characterizing science fiction, some authors use the term 'risks.' Clarke and Boersma
(2016) remind us that risk-taking behaviour was one of the drivers for the most recent global
financial crisis, and that hazards come in a variety of shapes and sizes.
Risk, according to Beck (1992), is a "systematic manner of coping with dangers and
vulnerabilities created and introduced by modernization itself." In this sense, hazards in our
modern society are not limited to financial threats; they may also arise from outside the
economic system. Civil society organisations have advocated, following Boersma et al. (2014),
that risk should be considered in a social and environmental context in addition to financial
risk. In a 2015 address, the Governor of the Bank of England stated, "Our societies face a
succession of significant environmental and socioeconomic issues."
Climate change will endanger financial resilience and long-term prosperity in the long run,
according to the weight of scientific data and the dynamics of the financial system. While there
is still time to take action, the window of opportunity is closing." Carney et al., 2015. As a
result, it is in financial institutions' best interests to understand how to manage the above-
mentioned risks in both their own and their clients' investment portfolios in order to maintain
future revenue growth and preserve a global system that provides a stable foundation for long-
term productivity expansion (Jaeggi et al., 2018).
If we look at the Web of Science (WoS) web database, Soppe has the most referenced work in
the SF field (2004). The author applies the Brundtland Report's definition of sustainable growth
to finance as a discipline; according to the World Commission on Environment and
Development, "sustainable development is development that meets current needs without
jeopardising future generations' ability to meet their own needs" (1987). Then he applies four
criteria to the new sustainable finance idea and compares them to a traditional and behavioural
approach to finance. "A financial strategy that seeks for triple-bottom-line performance
measurement with human actors who select for optimising multi-dimensional preference
functions," he concludes (Soppe, 2004, p. 221).
Urban and Wójcik (2019) define SF throughout the spirit of the 'Brundtland Report,' that is,
financing that maintains intergenerational justice and defends the basic right of "all human
beings" to "an environment appropriate for their health and well-being."
We also investigated an institutional approach, especially the UNEP Inquiry into the Design of
a Sustainable Financial System. "Sustainable development necessitates changes in the
mobilization and relative value of financial assets, as well as their link to the production,
management, and generation of real wealth," according to the report.
As a result, a sustainable financial system is one that generates, values, and transacts financial
assets in such a manner that actual wealth is shaped to meet the long-term demands of an
inclusive, ecologically sustainable economy." (UN Environment Programme, 2015, p. 13).
Other ideas that might be investigated while studying SF, according to Carè et al. (2018),
include climate finance (Richardson, 2014), green finance (Weber, 2015; Ryszawska, 2016),
carbon finance (Schaefer, 2012; Ryszawska, 2016), environmental finance, or ecologically
sustainable finance (Richardson, 2005).
Carè et al. (2018) argue that in previous research on these themes, the focus has been on the
influence that finance may have on long-term development (identifying a major trend in terms
of environmental sustainabilityof financial practises and products).
According to Jaeggi et al. (2018), the word SF has grown in relevance dramatically over the
previous two decades, to the point that it currently serves as the unifying theme for hundreds of
activities and studies:
United Nations Environment Programme, World Bank Group, Financial Stability Board, and
University of Cambridge are just a few examples of international organisations.
Journal of Sustainable Finance and Investment, Journal of Environmental Investing, Journal of
Cleaner Production, Handbook of Environmental and Sustainable Finance, and other academic
publications cover sustainable finance issues.
The Boston Consulting Group, KPMG, McKinsey, and the World Wide Fund for Nature are
examples of private enterprises and non-governmental organisations.
METHODOLOGY
A bibliometric study was constructed to offer an overview of the scientific production
connected to Sustainable Finance (SF). The phrase was initially used by Pritchard (1969) in a
research where he used mathematical and statistical approaches to books and other forms of
communication. It has strong ties to the recognised and comparable terms 'biometrics,'
'econometrics,' and'scientometrics.' Bibliometrics, in its most basic form, is the application of
quantitative analysis and statistics to publications such as journal articles and the citation counts
that accompany them.
The report employs one of the most prominent bibliographic databases, Scopus, which belongs
to Elsevier (2019) and includes over 69 million transdisciplinary entries, to fulfil the research's
goal. We used a methodology similar to that used by Nierola et al (2019). The authors
conducted a review of the relevant literature on sustainable tourism' as part of their research. In
order to conduct our study, we looked for occurrences of numerous terms linked to sustainable
finance and that originate in the literature cited above (sustainable OR sustainability WITH
finance* OR financing) inside the title and keywords. To find the most relevant literature on
sustainable finance, we merely looked at titles and keywords.
Up till the beginning of 2020, the sample consisted of 2978 document findings. We next
filtered the data by excluding topic areas including medical, nursing, mathematics, arts and
humanities, neuroscience, and others that were not relevant to our study. After removing 20
entries from 2020, the search yielded 1997 results (given that we had data for only one month).
We then proceeded to exclude document kinds that would not be termed "certified knowledge,"
as well as publications that had been critically assessed. Books, doctorate theses, and scientific
congress records are included here by Ramos-Rodrguez and Ruz-Navarro (2004), and we also
examined book chapters, letters, notes, conference evaluations, and reports by extension.
Furthermore, retracted, erratum, in press, and undefined papers were not taken into account.
