Net investment position and the stock market: The case of traditional and ESG indices

This paper is devoted to the investigation of environmental, social and governance investment (investment with ESG criterion) normative base in the context of standardization process in sustainable economy financing. Complexity of such standardization and the lack of commonly accepted regulations, indexes metrics are under discussions of scholars, which encourage the need for clear guidance in ESG investment. 651 sustainability rating products and more than 300 investment policy instruments in different countries show the need for classifying the ESG standards. The solution of this scientific and practical task is based on the developed ESG investment standards system classifications. Proposed classification incorporates such criteria as level of standards adoption, mandatory degree, sectorial specificity, degree of companies’ awareness of responsible activity, ensuring transparency and the benchmarks formation, creating the institutional support of the ESG investment standardization process in sustainable economy and making more grounded investment and regulatory decisions.

2020 revealed the vulnerability of the healthcare systems in most countries. It also highlighted their failure to generate serious progress in the fulfillment of Sustainable Development Goal 3 (SDG 3): Ensure healthy lives and promote welfare for all at all ages. One of the key problems inhibiting its progress is the lack of financial resources. Based on a comprehensive meta-analysis of the literature related to SDG 3 and its investment, it aims to demonstrate that lack of appropriate academic support is a part of the failure to generate serious progress in the fulfillment of SDG 3. To do this academic literature published in the period 2010–2019 is analyzed. SciVal Elsevier, VosViewer, and Google Trends tools are applied for analysis. The results show that there is a significant interest in the academic circles on SDG 3 alone. However, this interest is concentrated toward its medical aspects while economic aspects, including investment, are poorly represented. This study shows that the reason for the current investment gap in SDG 3 is the lack of academic support to provide a theoretical, methodological, and analytical framework for tackling the financing problem for SDG 3.

This paper examines whether mutual fund managers incorporate environmental, social, and governance (ESG) factors when deciding which sector to invest on behalf of their trustees. In doing this, the top 20 South African mutual fund companies (asset managers) listed on the Johannesburg Stock Exchange (JSE) were selected. The paper identified the top 30 JSE listed companies (in the large industrial, equipment, and machinery sectors, excluding unlisted and service-oriented companies) where trustees’ funds were invested (with a total of 28 companies between 2007 and 2017) from the mutual fund companies’ Equity Fund Fact Sheets 2017 (representing recent investment focus). ESG data were collected from the integrated and sustainability reports at the sampled companies’ websites, and financial data were sourced from the IRESS database. This study adopted the panel data analysis. The results show an insignificant negative relationship between the ESG proxies (water usage, employee health and safety cost [number of work-related fatalities], percentage of women on corporate board) and return on equity (ROE). This means that the sampled companies disregard the United Nations Principle of Responsible Investment (UN PRI) guideline, suggesting that asset managers focus on increasing returns on shareholders’ investment without considering ESG issues. The paper concludes that the disregard for responsible investment guidelines does not encourage companies to improve their unsustainable business practices.