The future trajectory for environmental finance: planetary boundaries and environmental, social and governance analysis

Abstract

Urgent issues such as climate change have drawn increasing attention from finance scholars. Most research has situated a corporate response within the context of the environmental, social and governance performance. However, other disciplines express concerns around environmental degradation within broader frameworks, such as the Planetary Boundaries framework. We highlight the different conceptualisations of ESG and planetary boundaries and call for further research that links finance research to the Planetary Boundaries framework. We describe how contributions in the Accounting & Finance Special Issue on Environmental Finance advance research in this area and explore implications for future research that responds to the imperatives of remaining within Planetary Boundaries.

No more excuses! Performance of ESG‐integrated portfolios in Australia

“…Unlike the majority of the literature, which focuses on comparing ESG-based investing's performance with conventional investing, Daugaard (2019) points out the synergies between the finance and management literatures and identifies emerging ESG research themes like the human element, climate change, ESG fund flows, ESG-rated fixed income products and the demand from emerging markets. Moreover, Ding et al (2020) emphasise the need to link 'planetary boundaries' framework to ESG research in finance. Planetary boundaries refer to a set of upper values in safe operation of earth systems for humanity (see also Linnenluecke et al, 2015 andAntonini andLarrinaga, 2017).…”

“…Moreover, Ding et al . (2020) emphasise the need to link ‘planetary boundaries’ framework to ESG research in finance. Planetary boundaries refer to a set of upper values in safe operation of earth systems for humanity (see also Linnenluecke et al ., 2015 and Antonini and Larrinaga, 2017).…”

Sixty years of Accounting & Finance: a bibliometric analysis of major research themes and contributions

“…We find an increasing research interest in the concepts of CSR (Al‐Hadi et al ., 2019; Ni and Zhang, 2019) and ESG (e.g., Daugaard, 2020; Ding et al ., 2020), as well as broader debates around the impacts of climate change, climate policy and global environmental change more generally. This shift towards sustainable finance is also visible in other Asia‐Pacific finance (and accounting) journals (e.g., Linnenluecke and Smith, 2019; Andrew and Baker, 2020) as well as in the literature more generally (Diaz‐Rainey and Tulloch, 2018).…”

Environmental legislation and capitalization of corporate environmental expenditure: Evidence from China

“…Previous research in environmental accounting has concentrated on the relationship between corporate environmental performance and firm value [2][3][4][5][6][7]. Similarly, there is substantial empirical evidence that changes in the environmental performance of firms affect the behavior of a wide range of stakeholders, including shareholders, directors, creditors, analysts, and regulators [8][9][10]. However, there is relatively little empirical research on what motivates firms to choose different environmental strategies, such as corporate environmental expenditures.…”