Trends and Focuses for ESG Investment Support: A Cross Country Comparative Analysis

Abstract

Currently, the modern society faces a measure of challenges, connected with the lack of balance between the economic and social development issue. This has caused the growing recognition of sustainable and responsible practices within the financial decisions making process, providing a measure of transformations of both financial and business landscape, contributing to a more equitable and environmentally conscious society. The modern researches in finance are significantly influenced by the increasing demand for ESG, the strengthening of ESG principles implementation in wealth and assets management. According to PwC researches, the ESG-oriented assets under management market in Europe is already about 172 % in compartment with 2021 year, the forecasted increase till 2026 year will be nearly 50 % comparing to the current volume. Thereby, there is an urgent need to summarize the theoretical descriptions of ESG investing along with the current trends of particular ESG components transformation along with the considering analytical research on trends and focuses for ESG investing’s support. The current research problem lays in the highlighting the functionality of ESG-oriented activity and its investment attractiveness trough the overview of theoretical definitions of ESG, comparing with the Trends and focuses for ESG investing’s support within the representative sampling on countries from the World Bank’s databases. The study is focused on the detailed analysis of separate indicators within a group of ten different countries. “Agricultural land”, “Electricity production from coal sources” and “CO2 emissions” indicators are analyzed within the environmental component. The social component of ESG is represented by the “Government expenditure on education” and “Individuals using the Internet” indicators. The “Regulatory Quality”, “Rule of Law” and “Voice and Accountability” indicators are considered as a part of governmental component. The chosen countries (Denmark, Finland, France, Germany, Japan, Norway, Poland, Ukraine, United Kingdom and the United States of America) represent deferent environment and approaches to ESG management and its investment support. The current research aims to represent the possibility to balance the ESG components, creating synergetic effect in case of their combinations. In particular, the attention is paid to the instruments of monetary and fiscal policy to balance ESG in the COVID-19 time. The elaboration of possible scenarios of ESG’s components balancing is possible in case of implementation of systematic measures to monitor debt sustainability and increase the transparency of banking institutions' balance sheets along with the developing the targeted measures to maintain an adequate level of liquidity and solvency of national economies, and coordination of national strategies and policies 

Keywords: sustainable development, sustainable finance, ESG investing, social-responsible business