The European Union entered into force the Corporate Sustainability Reporting Directive (CSRD), which represents a comprehensive framework to enhance transparency and accountability in corporate sustainability reporting. The study focuses on the organisational change processes and attitudes activated in the companies by the implementation of mandatory sustainability reporting under the CSRD. The study aims to provide insights into the practical adoption of the CSRD from an organisational change perspective. While prior studies have concentrated on more isolated aspects of CSRD implementation, this paper offers a holistic outlook on the entirety of the change processes involved. To achieve the goal, nine semi-structured interviews were conducted with sustainability professionals representing various organisations that are obligated to report under the CSRD in 2025 and 2026. This study develops an analytical framework combining Corporate Social Responsibility theory and Organisational Change frameworks. The results indicate that the CSRD serves as a catalyst for organisational change in all companies, regardless of their prior reporting practices. In managing this change, companies have to integrate sustainability and market concerns into their strategies.

There is a growing awareness of, and commitment to, Responsible Investment (RI) in the institutional investment markets internationally. RI is defined as the consideration of environmental, social and/or governance (ESG) issues in long-term oriented investment decision-making. As the role of ESG in determining investment risk and opportunity becomes more evident, and as ESG data becomes more available, RI is increasingly seen as an area of potential investment innovation. This thesis applies institutional, evolutionary and relational economic geography theories to examine this trend, exploring the mainstreaming of RI through novel empirical and conceptual research. This thesis examines the investment learning processes and information channels available in Western liberal market economies of the UK, US and Australia. It adopts economic geography knowledge and innovation frames towards answering the question: 'Now that ESG information is more widely available in the investment markets, why has this not catalysed a greater shift towards RI integration in mainstream investment decisions?'. Learning, language and leadership factors within the institutional investment industry are all argued to help answer this question. This research uses a mixed method approach, with analysis based on a survey of 154 investment professions, 97 semi-structured interviews and a case of RI innovation. This thesis develops a conceptual framework of the communication channels and information sources used in investors' innovation-decision-process, drawing attention to the importance of both social and asocial learning processes in generating and sharing knowledge about climate issues within investment markets. Following this, the thesis examines the role of 'local buzz' and 'global pipelines' in facilitating access to, and uptake of, ESG information. Levels of buzz and pipelines are found to vary in different financial centres, and are facilitated by formal and informal networking linked to RI groups. Importantly, then, this thesis finds that both spatial and relational proximity influence investors' access to ESG information and RI knowledge. The second half of this thesis examines whether and how RI information, knowledge and practice can be integrated into existing individual and organisational decision-making frameworks. It highlights the need to better translate RI information into investment-relevant language, and provides an example of how environmentally-driven stranded assets can be reframed as a version of sunk costs, contributing novel spatial-temporal theorisations of this concept. Through an illustration of RI decision-making by the investment consultant Mercer and the University of Sydney endowment fund, this thesis highlights that the capacity to integrate RI through the investment chain does exist. However, willingness to do so is found to be hindered by institutional and organisational path dependent norms, reduced only in some firms by seeing RI as an innovative area of competitive advantage from growing client demand. This thesis therefore finds that RI is being adopted in increasingly more mainstream investment firms, but this is not always fully integrated throughout the firm, and that uptake is geographically varied based on exposure to networks of information and knowledge sharing, and institutional, organisational and individual norms. Ultimately, this thesis therefore contributes towards understandings of the processes underpinning the mainstreaming of RI, but also contributes to broader economic geographies of investment, knowledge sharing and innovation.

The ocean economy is growing unprecedentedly, and container shipping is one of the key sectors at the heart of this growth. Shipping companies are among the largest ocean-based companies, and while they are committed to reducing their emissions, the sector remains plagued with many sustainability challenges. This thesis employs a mixed-methods approach to delve into the financial landscape of container shipping and examine the “E” of Environmental, Social, and Governance (ESG) that defines the sector's sustainability dimensions. It starts by highlighting the potential of financiers to incentivise companies toward ocean sustainability, and then through interviews with bank personnel provides insight into their motivations, challenges, risk perceptions, and sustainable lending processes. The results attempt to align actors' motivations along stewardship principles of care, knowledge, and agency. However, the findings reveal that reputational pressures serve as primary drivers of action. Unexpectedly, investor pressure on banks emerges as a promising leverage point. The discussion section of the thesis offers insights on the path to achieving sustainable shipping. It highlights the importance of co-creating solutions across the entire value chain as the banking sector's involvement in container shipping continues to grow.

This study will examine a strategy for evaluating energy storage projects by integrating valuation metrics from finance and the energy sector. Uncertainty is one of the key barriers to investment in the energy sector (Shimbar & Ebrahimi, 2017, p. 349) and therefore financial modeling that allows comprehensive valuation of energy investment is necessary (Berrada, 2022, p. 407). The purpose of the study is to propose a strategy for evaluating energy storage projects that applies to investors and decision makers.  LCOS is a necessary component of energy storage project valuation, as it considers both the financial and technical performance of energy storage systems (ESS). Existing research in the field has contradictory opinions regarding the usefulness of LCOS and traditional financial valuation models for investment decisions in the energy storage sector. Few studies have combined modeling from the financial and energy sector. The authors have identified a need to introduce an investor perspective to business research in the energy storage sector. The authors conduct an explorative mixed-method study with an underlying non-positivist philosophical position. The case study design includes creation of five hypothetical energy storage projects to simulate an investment scenario. The authors utilize a point-base system to integrate valuation models from the energy and financial sectors, which include NPV, IRR, payback period, LCOS and technological maturity. Experts in the field provide input for which metrics are emphasized by practitioners. The projects are ranked based on stand-alone metrics, an integrated model and expert opinion. The results indicate that integrating numerous valuation metrics is necessary for analyzing and comparing energy storage investments. The financial viability of projects change based on individual metrics and integrated financial models. Furthermore, the results indicate that LCOS should be reinforced by financial indicators when making investment decisions. The expert input shows that investors emphasize valuation metrics differently, which indicates that the economic attractiveness of energy storage projects varies among investors. IRR is used by practitioners as a primary indicator for profitability. Future research should investigate a method for including sustainability indicators in the valuation process. Furthermore, as data accessibility is an issue in the field of study, future studies should collaborate with practitioners to generate more secondary data sources. Lastly, the impact of discount rates, risk premiums and investor preferences should be researched to better understand investment in the sector.

Merger & Acquisitions has been one of the more central themes of the financial sphere since the beginning of the 19th century. It is an activity that is necessary for firms since it can give them competitive advantage in their markets. An acquisition can give the acquiring firms the possibility to enforce cost and revenues efficiencies, as well as the prospect of entering new markets in order to differentiate themselves. Due to the increased activity of acquisitions and its impact on global economy, there has been a development of several strategies and procedures of what shall be taken into account before and during the acquistion itself. One of the latest factors that has been on an uprising in this discussion is the importance of sustainable factors for the acquirer.  Sustainable finance has become a topic of high relevance in the past few years due to the effects of climate change, but also in regard to questions that concern the firms social and managerial contributions. New policies, regulations and standards have submerged and has therefore created a new environment for the firms to adapt after. A commonly discussed framework in the area of sustainability is ESG. ESG har the purpose of assessing and measuring a firm's contributions to sustainability from an environmental, social, and governance perspective. This framework has been lifted in many studies as one of the more influential factors among investors and managers when discussing the profitability of a firm, as well as its strategic prospects in the sector. Lately, it has also been a subject discussed among M&A researchers as well as professionals, with many arguing that ESG will be even. more important part of the merger process due to its influence on the value of the firm and its financial performance.  The aim of this study is to see what kind of correlation there is between the financial performance of an acquiring firm and its ESG scores. This will be analyzed among firms that are listed on the New York Stock Exchange and NASDAQ stock exchange that have performed at least one acquisition between 2017 and 2023. This can give the managers a glimpse of a possible pattern that might be present between acquisitions and ESG scores, since the main aim of an acquisition is to improve the firm’s financial performance. The results that can be drawn from this study is that there is a positive and statistically significant correlation between financial performance and ESG scores among these firms. This may create a new, more modern agent problem where the management is opening up more for external stakeholders over their shareholders, which can be viewed as a consequence of stronger corporate social responsibility taken by the firms.

This thesis examines if private capital can progress social sustainability through financial instrumentsby unveiling how philanthropy can serve to mobilise private capital investments, alongside social impactbonds, using various finance framework approaches. Presently, the dialogues within sustainable financehave focused primarily on the environmental rather than the social aspects despite social sustainabilitybeing identified as a key component to achieve sustainable development. Therefore, an investigation onwhat can be done to mobilise more capital into social sustainability investments was performed. By conducting a literature pre-study and a survey, this study was able to identify that investors wouldlike for there to be a philanthropic mechanism in place within financial frameworks. However, they donot see themselves as playing a part in contributing philanthropically themselves, rather, it seems asthough investors would prefer for philanthropy to be a separate role. Despite this, when presented withframeworks according to their preferences, investors were hesitant to invest, indicating that it is thebarriers that investors face to make social sustainability investments that must be alleviated in order tomake a fair assessment of the potential for philanthropy alongside social impact bonds to mobilise moreprivate capital into social sustainability investments. / Denna avhandling undersöker ifall privat kapital kan främja social hållbarhet via finansiella instrument.Detta görs genom att utreda hur filantropi genom olika finansieringsramverk kan fungera som ettverktyg för att mobilisera privata kapitalinvesteringar tillsammans med resultatbaseradefinansieringsavtal. För närvarande har fokuset inom hållbar finans främst varit på de miljömässigasnarare än de sociala aspekterna. Detta trots att social hållbarhet har identifierats som ennyckelkomponent för att uppnå hållbar utveckling. Med detta som bakgrund, gjordes en undersökningav vad som kan göras för att frigöra mer kapital till investeringar i social hållbarhet. Genom en litteraturförstudie och enkätundersökning kunde denna avhandling identifiera följande:Investerare vill att det ska finnas en filantropisk mekanism i finansiella ramverk. Däremot serinvesterarna sig inte att de har en roll i att själva bidra filantropiskt, utan de föredrar att filantropi är enseparat roll. Trots detta var investerarna tveksamma till att investera när de presenterades med ramverkenligt deras preferenser, vilket tyder på att det finns andra hinder. Identifierade hinder är: Otydlighetergällande hållbarhetsaspekter i investeringarna, brist på investeringsmöjligheter och svårighetergällande mätning av social påverkan. Dessa hinder måste minskas för att kunna göra en rättvisbedömning av filantropins potential tillsammans med resultatbaserade finansieringsavtal för attmobilisera mer privat kapital till investeringar i social hållbarhet.

Diminishing green bond premia have been associated with the risk of greenwashing. In response, third-party verification (TPV) has emerged as a market-driven solution to mitigate risks from asymmetric information and safeguard the credibility of green bonds. This thesis examines the complexities of TPV mechanisms within the green bond market, employing a novel approach by comparing two leading verification institutions: the Climate Bonds Initiative (CBI) and the International Capital Market Association (ICMA). The goal is to ascertain the effectiveness of TPV and examine their impact on bond yields. Additionally, this study examines the role of these verification systems in reducing information asymmetry and mitigating the threat of greenwashing. Utilising propensity score matching, our analysis reveals a TPV premium ranging from approximately -15 to -19 basis points (bps) for green bonds verified by the CBI, while the ICMA does not reliably demonstrate a TPV premium. Furthermore, our investigation extends to the differential impact of TPV on government and corporate green bonds. We find a clearer TPV premium for corporate green bonds verified by the CBI, estimated at -21 to -23 bps, compared to government green bonds, which yielded insignificant findings. Complementing our quantitative findings, a key informant interview provides nuanced insights. We also uncover potential biases inherent in dataset preferences favouring specific verification institutions. Our research highlights the efficacy of verification through the CBI, as the advantages significantly outweigh the associated costs, making it a sensible choice for issuers. Moreover, we advocate for the adoption of uniform reporting standards to streamline administrative processes and enhance transparency, particularly for corporate green bond issuers. / Minskande premievärden på gröna obligationer har kopplats till risken för greenwashing. Som svar på detta har tredjepartsverifiering (TPV) framträtt som en marknadsdriven lösning för att minska riskerna från asymmetrisk information och säkerställa trovärdigheten hos gröna obligationer. Denna avhandling undersöker komplexiteten i TPV-mekanismer inom marknaden för gröna obligationer, genom att jämföra två ledande verifieringsinstitutioner: Climate Bonds Initiative (CBI) och International Capital Market Association (ICMA). Målet är att fastställa effektiviteten av TPV och undersöka deras inverkan på obligationsräntor. Fortsättningsvis, granskar denna studie rollen av dessa verifieringssystem i att minska informationsasymmetri och motverka hotet om greenwashing. Genom att använda propensity score matching avslöjar vår analys en TPV-premie på cirka -15 till -19 baspunkter (bp) för gröna obligationer verifierade av CBI, medan ICMA inte på ett tillförlitligt sätt visar en TPV-premie. Vidare undersöker vi den differentierade effekten av TPV på gröna stats- och företagsobligationer. Vi finner en tydligare TPV-premie för företagsobligationer verifierade av CBI, uppskattad till -21 till -23 bp, jämfört med statsobligationer, som inte gav signifikanta resultat. För att komplettera våra kvantitativa resultat, ger en intervju med en nyckelinformant nyanserade insikter. Vi upptäcker även potentiell partiskhet inneboende i datasettet som gynnar specifika verifieringsinstitutioner. Vår forskning belyser effektiviteten av verifiering genom CBI, eftersom fördelarna överväger de associerade kostnaderna, vilket gör det till ett vettigt val för emittenter. Dessutom förespråkar vi antagandet av enhetliga rapporteringsstandarder för att förenkla administrativa processer och förbättra transparensen, särskilt för emittenter av gröna företagsobligationer.

In a world of growing environmental concern, financial markets are increasingly investing their capital in the transition towards a more sustainable economy. Government initiatives, such as the 2019 European Green Deal, support this shift by aiming to further steer capital flows in this direction. This thesis explored what motivational factors drive the integration of environmental, social, and governance (ESG) concerns in private equity firms which implement a buyout strategy and operate in Sweden. Additionally, this thesis sought to highlight what influence the regulatory environment has on this integration. The data was collected by interviewing representatives from seven private equityfirms and utilising a secondary data analysis of their company reports. The results showed a high degree of sustainability integration in the private equity industry. The analysis further revealed that while intrinsic motivators, predominantly emerging from partners' beliefs, are the primary drivers for some private equity firms, the majority are influenced by extrinsic motivators, with investor demand being the predominant factor. Additionally, we could identify the emergence of industry standards through governmental and non-governmental frameworks. From a practical standpoint, the thesis highlights the necessity of integrating sustainability to maintain legitimacy in the market and secure continuous funding.

Modern society is faced with the complex and intractable challenge of global warming, along with other environmental issues that could potentially alter our way of life if not managed properly. Is it possible that financial markets and equity investors could have a huge part to play in the transformation towards a greener and more sustainable world? Previous studies about investment strategies regarding sustainability have for the most part been centered around possibly less objective ESG-scores or around carbon and GHG-emissions only, with little or no consideration for water usage and waste management. This thesis aims to amend to the previous work on carbon reducing strategies and ESG-investing with the addition of water usage and waste management, especically using raw data of these measures instead of ESG-ratings. Index replicating portfolios have become more and more popular as it proves harder and harder to beat the index, offering good returns along with cheap and uncomplicated portfolio construction and management. In a trending market, the fear of missing out and the demand for market return can make an index replicating strategy a way for investors to have market exposure but still remain diversied and without confusion about which horses to bet on. This thesis studies the relationship between tracking-error and the increase of sustainability in a portfolio through reduction of the intensity of carbon emissions, water usages and poor waste management. To be able to make a fair comparison, these measures are normalized by dividing each measure by the reported annual revenue. These three obtained intensities are then implemented individually, as well as all together into index replicating portfolios in order to study the effect from decreasing them. First and foremost we study the effect on the tracking-error, but also the effects on returns and volatility. We also study the effect on liquidity and turnover in the portfolios to show that it is possible to implement extensive sustainability increasing methods into an index replication equity portfolio. We follow the UCITS-directory to avoid overweightin specic companies and only allow the portfolios to overweight a sector with maximum 2%, in order to avoid an unwanted exposure to sectors with naturally lower intensities. The portfolios are obtained by using a multi-factor risk model to predict the expected statistical behaviour in relation to the chosen factors. Followed by applying Markowitz Modern Portfolio Theory through a convex optimization problem with the objective function to minimize tracking-error. All displayed portfolios had stable and convex optimization and were compliant with the UCITS-directory. We limited our study to only North American stocks and chose the index "MCSI NA" to replicate. Only stocks that were a part of the index were allowed to invest in and we did not allow negative weights for any stocks. The portfolios were constructed and backtested for the period 2014-12-01 until 2019-03-01 with rebalancing quarterly at the same points in time that the index is rebalanced by MCSI. We found that it was possible to implement extensive sustainability considerations into the portfolios and still keep a high correlation with the index whilst keeping low tracking-errors. We believe that most index replicating investors should be able to implement reductions of above mentioned intensities of about 40-60% without compromising tracking-errors,returns and volatility too much. We found evidence that during this time and in this market our low-intensities portfolios would have overperformed the index. We also found that returns increased and volatility decreased as we increased the reduction of each individual measure and all three collectively. Reducing carbon intensity seemed to drive positive returns and lower volatility the most, but we also observed apositive effect from reduction of all intensities. Our belief before conducting this study was that sustainability should have a negative effect on returns due to the limitation of the feasible area of investing. This motivated us to build portfolios with intent to makeup for these lesser returns and hopefully "beat the index". This failed in almost all cases and the only way we were able to beat the index were through implementing sustainability in our portfolios.

In the field of sustainable finance, Environmental-, Social- and Governance-ratings (ESG) have become an acknowledged measurement of a firm's sustainability performance. The increased awareness of sustainability issues in today's society is undeniable. However, based upon contradicting results from previous research, it was uncertain if investors were rewarding a firm’s sustainability efforts in the form of a lower cost of equity. The purpose of this thesis has therefore been to examine the relationship between sustainability, risk and valuation as well as stock-price behavior in times of crisis regarding large firms publicly listed in the Nordic countries. In order to fulfil the purpose, various multiple regression models have been conducted on quarterly data from the period between 2011 to 2020. The approach chosen to examine if ESG has a relation to the cost of equity has been to calculate the implied cost of equity inferred from consensus forecasts of future financial development and stock price at each point in time, also known as the ex-ante cost of equity. Since the independent variable ESG-score was not likely to be the sole variable to affect the independent variables in our multivariate regression models, we have followed previous studies in the choice of control variables. The empirical results of this study showed a significantly negative relationship between a firm’s ESG-score and the cost of equity. In addition, our results showed a significantly positive relationship between a firm’s ESG-score and both the price-to-earnings ratio as well as the price-to-book ratio while no significant relationship between a firm’s ESG-score and the enterprise value to earnings before interest and taxes ratio could be established. Finally, the results of this thesis showed that firms with a greater ESG-score generated excess returns during the latest market turmoil of 2020 caused by the Covid-19 outbreak. This thesis challenges the value-destruction view of ESG-efforts since our results indicate that investors are pricing sustainability risk with a negative risk premium in line with the value creation approach. No causality test has been performed during this study, however several possible mechanisms by which ESG impacts the valuation and crisis resistance have been discussed based upon previous research and the theoretical framework. We argue for the reduced cost of equity to reflect diminished information asymmetry, a larger investor base, improved growth and cash-flow opportunities as well as reduced risk for litigations as aconsequence of a more sustainable business conduct. To the best of our knowledge, no previous study on the topic has been conducted on the Nordic markets. This study fills thus a research gap on the relation between sustainability, risk andequity market valuation and we sincerely hope to have contributed to academia with new approaches.