The Evolution of Sustainable Investments and Finance : Theoretical Perspectives and New Challenges

Over the last decade, socially responsible investments (SRIs) have become paramount to both professionals and academics. In the aftermath of the financial crisis of 2007-8, practitioners have become much more involved in new financial models that integrate returns and positive social and environmental impacts. The authors argue that previous irresponsible financial models are anachronistic, and propose a new relationship between stakeholder and shareholder. Starting from the mainstreaming of SRI, this book recovers the social function of banks and the innovative role of crowdfunding and venture capital models. The book offers a unified perspective for firm and funder, making it a timely and invaluable read for scholars and practitioners interested in sustainable development and social impact finance. Acknowledgements Introduction References Contents List of Figures List of Tables 1 Socially Responsible Investment (SRI): From Niche to Mainstream 1.1 Beyond the Separation Model 1.1.1 The Separation Model and the Growth of Inequality and Imperfections 1.1.2 The Separation Model Within Firm Theory: Profit Maximisation Is not a Convincing End-Goal 1.2 The Main Features of Ethical and Socially Responsible Investing 1.2.1 Capital Allocation by Socially Responsible Funds 1.2.2 Decades of Studies on SRI Performance 1.2.3 The Drivers and Characteristics of the Individual Socially Responsible Investor 1.3 The Fiduciary Duties of SRFs: The Nexus Agency Model 1.4 The Opportunities and Risks of SRI as a Mainstream 1.5 ESG Rating of Investment Funds 1.6 Institutional Recognition of SRI: EU Regulatory Norms 1.7 SRI Market Trends: An EU and US Comparison 1.7.1 The US SRI Market References 2 ESG Criteria in Alternative Investments 2.1 Introduction 2.2 Alternative Investments: An Overview 2.3 ESG Factors and Alternative Investments 2.3.1 The Role of Impact Investment 2.3.2 Vehicles for Impact Investments 2.4 Private Equity 2.4.1 ESG Selection Criteria in Private Equity 2.4.2 Impact Investment Criteria in Private Equity 2.5 PE Investments and ESG Due Diligence 2.6 ESG Aspects in Hedge Fund Investments 2.7 Environmental and Sustainable Real Estate Investments 2.7.1 Sustainable Activity in the Real Estate Industry References 3 Socially Responsible Banking: Towards a New Firm–Bank Relationship 3.1 A Schumpeterian View: The Social Role of Bank 3.1.1 The Evolution of Bank Interventions in “Bank-Centred” Systems: The Italian Case 3.2 Why Do Banks Comply with ESG Principles? 3.2.1 ESG Principles in Banking as Drivers of Business Benefits 3.3 An Overview of ESG Criteria in the Banking Sector 3.4 ESG Investment Policy and Bank Lending 3.5 ESG and Potential Impacts on Banks’ Performance 3.6 Banks’ Social Disclosure 3.6.1 BSD Relative to the ESG Pillars 3.6.2 BSD and Stakeholder Categories 3.7 Ethical Versus Conventional Banks: An Explorative Comparative Analysis References 4 Crowdfunding and Socially Responsible Initiatives 4.1 Fintech and the Alternative Financial Landscape: An Introduction to Crowdfunding 4.1.1 Community and Financially Oriented Crowdfunding Models 4.1.2 Signals in Crowdfunding: The Role of the Crowd 4.2 The Relevance of Crowdfunding in Entrepreneurial Finance 4.3 The Crowdfunding Ecosystem for Innovation and Value Co-creation 4.4 Crowdfunding and Sustainability 4.4.1 Crowdfunding and CSR 4.4.1.1 CFPs’ Socially Responsible Orientation 4.4.1.2 Crowdfunding as a Stakeholder Engagement Model 4.4.1.3 Banking and CF: Framing Synergies 4.4.2 CF as a Form of Impact Finance 4.4.3 Sustainability-Oriented CF Projects and Crowd Behaviour References 5 Venture Capital and Responsible Investing: Progress, Problems and Perspectives 5.1 Introduction 5.2 The Key Characteristics and the Main Stages of VC Investments 5.3 ESG Implementation in the VC Industry: Motivation, Diffusion and Strategies 5.4 How Does ESG Compliance Contribute to VCs’ Success? 5.4.1 ESG and VC Firms’ Fundraising 5.4.2 Role of ESG in Mitigating Problems of Information Asymmetry Faced by VC Firms 5.4.3 Are ESG-Compliant VC Firms More Likely to Add Value to Investee Firms? 5.4.4 ESG Considerations at Each Stage of the Investment Process: Some Operational Indications 5.5 When a VC Becomes a Social VC 5.6 The Dark Side of VC: Addressing the VC Gender Gap References Conclusion Index