Financial Markets in Sustainable Development

Dear Colleagues,

The 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Action pose a challenge for the financial sector, as a large amount of investments are required to transform their current patterns of production and consumption towards a green economy that generates growth and helps reduce poverty. This transformation requires the commitment of the public and private financial sectors. In this context, financial markets play a key role in implementing the 2030 Agenda, as a major shift in business and capital allocation decisions to direct resources into sustainable investments across all sectors of the economy are required.

There is an emerging research interest in understanding the implications of the sustainability challenges on financial systems. Additional research is needed to understand how the current financial system can be rewired to make a positive impact on society and the planet. Managing financial risk, while also considering social and sustainability issues, requires new decision-making approaches that take environmental, social, and governance criteria (ESG) into consideration, in order to have a positive societal impact and targeted financial returns. So, the comprehensive integration of sustainable targets within investment decisions is crucial for the compliance of the Sustainable Development Goals (SDG). Finally, the emergence of sustainability-themed investments that focus on long-term investment themes associated with SDGs, such as water scarcity, energy efficiency, carbon reduction, electric mobility, decent work, sustainable production, and access to education, provide new areas for further investigation.

This Special Issue (SI) welcomes the submission of conceptual frameworks, modelling approaches, case studies, and reviews to support an integrated understanding of the challenges that financial markets face in attempts to contribute to the United Nations Sustainable Development Goals (SDGs).

The topics relevant to this Special Issue include, but are not limited to, the following:

• Experiences on innovative SDG-related financial instruments in the field of green and sustainable finance (e.g., socially responsible investments (SRI), green and social bonds, ethical banking, and microfinance)
• Portfolio selection approaches boosting thematic-related SDGs
• Multicriteria and multio-bjective optimization models integrating sustainability concerns
• The role of financial institutions (for example, central banks, commercial and investments banks, insurance companies, or asset management funds) in the implementation of the Agenda 2030
• Measurement of financial asset’s sustainability and/or performance
• Risk management stemming from climate change and social issues

References

• Cabello, J.M., Ruiz, F., Pérez-Gladish, B., Méndez-Rodríguez, P., (2014). Synthetic indicators of mutual funds? environmental responsibility: An application of the reference point method. European Journal of Operational Research 236, 313–325.
• Ballestero, E., Pérez-Gladish, B., Garcia-Bernabeu, A., (2015). Socially responsible investment. A Multi-criteria Decision Making Approach. International Series in Operations Research & Management Science 219.
• Utz, S., Wimmer, M., Steuer, R.E., (2015). Tri-criterion modeling for constructing more-sustainable mutual funds. European Journal of Operational Research 246, 331–338.
• de Carvalho Ferreira, M.C.R.; Sobreiro, V.A.; Kimura, H.; de Moraes Barboza, F.L. (2016). A systematic review of literature about finance and sustainability. Journal of Sustainable Finance & Investment, 6, 112–147, doi:10.1080/20430795.2016.1177438.
• Qi, Y.,(2018). On outperforming social-screening-indexing by multiple-objective portfolio selection. Annals of Operations Research 267, 493–513.
• Garcia-Bernabeu, A., Salcedo, J., Hilario, A., Pla-Santamaria, D. Herrero, J.M. (2019). Computing the Mean-Variance-Sustainability Nondominated Surface by ev-MOGA. Complexity.

Dr. Ana Garcia-Bernabeu
Dr. David Pla-Santamaria
Guest Editors

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• Sustainable Development Goals Sustainable finance Multicriteria and multi-objective models Environmental social and governance (ESG) criteria Financial markets Socially responsible investments Portfolio selection Financial performance