Green Investing: Changing Paradigms and Future Directions (Palgrave Studies in Impact Finance)

This book provides a unique picture of green finance by highlighting, under both theoretical and practical lenses, current changing paradigms and future directions in this field. The book is founded upon four major aspects that characterize current debates in green finance: products and services, financial innovation, green washing and transparency, and external pressures. The book is particularly useful to understand the current perimeter of the field; identify the potentials and challenges of the sector; explore current changing paradigms and its potentials to act as drivers for mainstreaming green finance; and conceptualize future directions of the field, with particular focus on its role in the post-COVID recovery plans. The book therefore is not only useful for deriving theoretical or practical implications for researchers and policy makers, but also to capture the evolving complexity of the field at the eve of extraordinary and green-driven changes in financial industry and in policy programs. The book also opens up interesting questions on theoretical advances in financial theory derived from these innovations and accelerated by the pandemic. It will be of interest to scholars and students from different academic disciplines such as economics, finance, political science, and entrepreneurship, as well as practitioners interested in green finance and in the financing of environmentally impactful organizations and projects. Alessandro Rizzello received his PhD from the University Magna Graecia of Catanzaro with a dissertation that focused on social impact investing and social impact bonds in the healthcare sector. His research interests are sustainable finance, green finance, social impact investing, social impact bond and crowdfunding of sustainable ventures. His working experience includes the position of head of the Budgetary and Financial Office in the Italian public administration. He received his degree in Economics from LUISS Guido Carli University, Rome Foreword Acknowledgments Contents List of Figures List of Tables 1 Introduction 1.1 Green Investing: Setting the Scene 1.2 The Research Aims 1.3 Methodological Notes 1.4 Outline of Chapters 1.5 Research Innovation and Audience References 2 What’s in a Name? Mapping the Galaxy of Green Finance 2.1 Introduction 2.2 Definition and Key Features 2.3 The Theoretical Boundaries of Green Finance Green Finance and Its Alter Ego The Green Galaxy of Green Finance 2.4 The Green Finance Ecosystem The Demand Side The Supply Side The Forms of Green Capital and Related Instruments 2.5 The Green Finance Standards and Frameworks 2.6 The Green Finance Market: Size and Segments 2.7 Conclusions References 3 The Green Financing Framework Combining Innovation and Resilience: A Growing Toolbox of Green Finance Instruments 3.1 Introduction 3.2 The Green Financing Framework 3.3 The Main Green Finance Delivery Instruments: An Overview 3.4 The Emerging Green Finance Markets and Instruments Green Crowdfunding Impact Bonds Sustainability-Linked Bonds 3.5 Case Studies of Emerging and Innovative Green Financing Tools 3.6 Conclusion References 4 Green Finance and SDGs: Emerging Trends in the Design of Green Investment Portfolios 4.1 Introduction 4.2 Sustainable Development Goals: Green Targets and Financial Needs 4.3 A Framework of Green Investment Approaches 4.4 ESG Investing: The Green Investing Giant with Feet of Clay 4.5 The Role of ESG Ratings and Indices in the Investment Value Chain 4.6 The Rise of SDG-Aligned Investment Strategies and Their Relevance for Green Finance 4.7 Conclusion References 5 Beyond Greenwashing: An Overview of Possible Remedies 5.1 Introduction 5.2 The Conceptual Background of Greenwashing Greenwashing: Key Features and Conceptualization 5.3 A Review of Global Greenwashing Regulatory Initiatives 5.4 The Role of Green Taxonomies, Ratings, and Standards Green Taxonomies: An Overview and an Analysis of Key Dimensions The Development of Green Ratings Voluntary Market Standards and Self-Regulatory Initiatives 5.5 A Classification of Greenwashing Signals in the Green Financial Sector 5.6 A Range of Possible Solutions to Prevent Greenwashing Remedy #1: Tools for the “Green” Alignment of Investments Remedy #2: Increase Participation of Independent Evaluators Remedy #3: Develop Process Criteria for Untargeted Green Investments 5.7 Conclusion References 6 Financing the Green Recovery: The New Directions of Finance After the COVID-19 Crisis 6.1 Introduction 6.2 The Nexus Between the Pandemic Crisis and Green Recovery Plans 6.3 An Overview of the Main Green Post-COVID Recovery Actions A Focus on the European Union Area 6.4 Theoretical Innovations in Financial Studies Toward an Environmentally Driven Proposition in Financial Theory From Resilient to Anti-fragility Finance The Progressive Decline of Short-Termism 6.5 Implications for the Greening of the Financial Sector Integration of Climate and Environmental Risks for Financial Stability Environmental Alignment and Transition Finance Including Environmental Factors into Fiduciary Duties Frameworks 6.6 Future Lines of Research 6.7 Conclusion References 7 Conclusions 7.1 Introduction 7.2 The Definitional Puzzle: Identifying Green Beyond the “What” 7.3 The Future of Green Investing Beyond Taxonomies and Ratings 7.4 Green Finance After Covid: The New Normal for the Financial System? 7.5 Conclusion Index