This study deals with the critical analysis of sustainable investments and, therefore, ESG practices on financial performance during the year 2020, when the Covid-19 pandemic hit the financial market. The analysis examines sustainable investments in terms of their actual sustainability, risk, and earnings potential. For an improved tangibility of the findings, the overall market of the developed countries is represented by the two sample indices MSCI World and its sustainable benchmark MSCI World SRI. The analysis focuses on performance, volatility, and gross returns. Additionally, the knowledge of three financial experts supplements the analysis and connects the findings with their professional experience. The interview questions focused on the transparency and traceability of a sustainable investment product, the movement from shareholder-value to the stakeholder approach, the risk of sustainable investments, and the return analysis. The analysis shows that the Covid-19 pandemic has influenced the behavior of investors through the increasing importance of social and environmental topics. The analysis determines that intransparency and greenwashing of sustainable investments pose a danger to investors and are favored by a lack of legal framework conditions. Furthermore, the results reveal that ESG engagement reduces the agency problem and can be considered a stakeholder issue. An examination of market data shows that sustainable investments have a lower extreme risk and are thus subject to lower fluctuations in value during the year of the pandemic. In addition, sustainable investments show an abovemarket average development of value growth and gross returns. The conclusion is that sustainable investments are still in the development stage and need quickly binding legal regulations. Nevertheless, the lower risk, the above-market average performance, and the increasing demand point to a long-term establishment of sustainable investments in the market.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:ltu-91843 |
| Date | January 2022 |
| Creators | Motschmann, Laura |
| Publisher | Luleå tekniska universitet, Institutionen för ekonomi, teknik, konst och samhälle |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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