Sustainable finance and investment: Review and research agenda

Abstract

Sustainable finance and investment (SFI) is key to fostering sustainable global development. Research in this field has focused on specific topics, such as the financial performance of sustainable investments and companies committed to sustainability. The SFI literature is excessively fragmented, rendering it difficult to identify what constitutes the field and what differentiates it from traditional finance and investment. Based on a systematic literature review of 166 articles, we map and integrate the main elements of the SFI field and identify the most relevant avenues for further research. In this process, we provide a definition of SFI; identify the main players in the field; and describe their profiles, strategies, and outcomes. We also propose a framework for understanding the SFI field and a research agenda. This agenda organizes the main SFI research questions and suggests suitable approaches to address them. We conclude that SFI players have worked together to promote positive social and environmental impacts through their financial and investment activities. However, the under‐theorization of the SFI concept, the traditional short‐term nature of financial logic, and the lack of evidence on the SFI impacts on society and the environment are the greatest challenges facing the field.

Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research

“…In this regard, this study significantly extends Cunha et al’s ( 2021 ) review on sustainable finance to uncover the insights that they were not able to provide due to the inherent limitation of their manual and qualitative review of only a small corpus of the literature. Specifically, this study sheds light on the performance analysis and science mapping of the entire corpus of sustainable finance research using a bibliometric analysis, wherein the former unpacks the publication trend, the top articles and contributing journals, authors, institutions, and countries, and the methodological choices and research contexts, whereas the latter reveals the major themes and topics underpinning the intellectual structure of the field.…”

“…For example, using systematic reviews, researchers have consolidated the extant literature pertaining to climate finance (Giglio et al, 2020 ), ESG (Daugaard, 2020 ; Widyawati, 2020 ), green finance (Malhotra & Thakur, 2020 ; Zhang, et al, 2019 ), impact investing (Clarkin & Cangioni, 2016 ), and socially responsible investing (Camilleri, 2020 ; Fabregat-Aibar et al, 2019 ; Rahman, et al, 2020 ; Revelli & Viviani, 2015 ; Viviers & Eccles, 2012 ), and using bibliometric analysis, researchers such as Bui et al ( 2020 ) have revealed insights on sustainable corporate finance albeit from a small corpus of 227 articles. Apart from Cunha et al ( 2021 ), which is the only and most recent review of sustainable finance prior to the present review, no other review has attempted to review the field as a whole. Yet, as mentioned previously, the review by Cunha et al ( 2021 ) remains limited to a small corpus of 166 articles, and thus, providing a snapshot rather than a state-of-the-art overview of sustainable finance research, wherein the absence and need of the latter to provide a comprehensive stock take of the field motivates the present review, whose methodology will be disclosed in the next section.…”

“…Specifically, this study sheds light on the performance analysis and science mapping of the entire corpus of sustainable finance research using a bibliometric analysis, wherein the former unpacks the publication trend, the top articles and contributing journals, authors, institutions, and countries, and the methodological choices and research contexts, whereas the latter reveals the major themes and topics underpinning the intellectual structure of the field. In doing so, this study will contribute enriching insights that answer six research questions (RQs) that are typically reveal through bibliometric reviews (Donthu et al, 2021b , 2021c ; Kumar et al, 2021a , 2021b , 2021c ; Rao et al, 2021 ), and thus, provide a more accurate representation of the state of sustainable finance research as a whole as opposed to the piecemeal representation that emerges from a sample of the field, as in the case of Cunha et al ( 2021 ): RQ1. What is the publication trend for sustainable finance research?…”

“…Considering the broad nature of sustainable finance and its importance for achieving the sustainability agenda, many studies have been undertaken to enhance the understanding and practice of sustainable finance. The recent review of sustainable finance by Cunha et al ( 2021 ) exemplifies this observation, as the authors found that the extant literature on sustainable finance to be “excessively fragmented”, which makes it difficult to “identify what constitutes the field and what differentiates it from traditional finance”. However, their review, which shed light on the critical features of sustainable finance, the global initiatives for the promotion of sustainable finance, and the strategies and outcomes of the main players in sustainable finance, considered 166 articles only, though the field is in fact very much larger, as we demonstrate through the present review consisting of 936 articles.…”

“…However, their review, which shed light on the critical features of sustainable finance, the global initiatives for the promotion of sustainable finance, and the strategies and outcomes of the main players in sustainable finance, considered 166 articles only, though the field is in fact very much larger, as we demonstrate through the present review consisting of 936 articles. Noteworthily, no review, to date, has attempted to analyze the burgeoning field of sustainable finance without making excessive concessions, wherein overly stringent criteria are imposed to trim the corpus for review to a manageable size for review, as witness in the review by Cunha et al ( 2021 ).…”