A Review of Sustainable Finance and Financial Performance Literature: Mini-Review Approach
Keywords:sustainability finance, financial institutions, financial performance, mini-review approach
Sustainable development is a concept of how finance interacts with the economy, society, and the environment. As a form of transformation, a sustainable financial system exists to direct business practices by allocating investment funding to productive activities. Financial institutions, especially banks as funders, must ensure that all funds used for company activities create long-term value for the environment and society. Implementing sustainable finance is expected to help deal with uncertain environmental issues, such as carbon emissions on climate change. This paper seeks to provide an understanding of the literature on sustainable finance financing and corporate financial performance in the global banking sector. This research was designed using a qualitative approach through a literature study. Reviews on sustainable finance were conducted by reading and analyzing 30 peer-reviewed journal articles and summarized in two tables, e.g., article journal and publisher distribution and article category on the basis of the subject. The result shows that sustainable finance has a significant positive relationship with banking financial performance. In conclusion, this study identified that companies began to adopt sustainability practices, and it has a positive impact on financial performance and survival, and many organizations are beginning to incorporate the elements of the SDGs into their business operations.
Al Ahbabi, A. R., & Nobanee, H. (2019). Conceptual Building of Sustainable Financial Management & Sustainable Financial Growth. SSRN Electronic Journal, 1–16. https://doi.org/10.2139/ssrn.3472313
Al Muhairi, M., & Nobanee, H. (2019). Sustainable Financial Management. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3472417
AlFalahi, L., & Nobanee, H. (2019). Conceptual Building of Sustainable Economic Growth and Corporate Bankruptcy. SSRN Electronic Journal, 1–12. https://doi.org/10.2139/ssrn.3472409
Alkaabi, H., & Nobanee, H. (2019). A Study on Financial Management in Promoting Sustainable Business Practices & Development. SSRN Electronic Journal, 1–11. https://doi.org/10.2139/ssrn.3472415
Almansoori, A., & Nobanee, H. (2019). How Sustainability Contributes to Shared Value Creation and Firms’ Value. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3472411
Cantele, S., & Zardini, A. (2018). Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship. Journal of Cleaner Production, 182, 166–176. https://doi.org/10.1016/j.jclepro.2018.02.016
Ching, H. Y., Gerab, F., & Toste, T. H. (2017). The Quality of Sustainability Reports and Corporate Financial Performance: Evidence From Brazilian Listed Companies. SAGE Open, 7(2). https://doi.org/10.1177/2158244017712027
Dafermos, Y., Nikolaidi, M., & Galanis, G. (2018). Climate Change, Financial Stability and Monetary Policy. Ecological Economics, 152(June), 219–234. https://doi.org/10.1016/j.ecolecon.2018.05.011
Daszyńska-żygadło, K., Słoński, T., & Dziadkowiec, A. (2021). Corporate social performance and financial performance relationship in banks: Sub-industry and cross-cultural perspective. Journal of Business Economics and Management, 22(2), 424–444. https://doi.org/10.3846/jbem.2020.13892
Doskočil, R., & Lacko, B. (2018). Risk management and knowledge management as critical success factors of sustainability projects. Sustainability (Switzerland), 10(5). https://doi.org/10.3390/su10051438
El Khoury, R., Nasrallah, N., & Alareeni, B. (2021). ESG and financial performance of banks in the MENAT region: concavity–convexity patterns. Journal of Sustainable Finance and Investment, 1(1), 1–25. https://doi.org/10.1080/20430795.2021.1929807
Evangelista, P., Santoro, L., & Thomas, A. (2018). Environmental sustainability in third-party logistics service providers: A systematic literature review from 2000-2016. Sustainability (Switzerland), 10(5). https://doi.org/10.3390/su10051627
França, C. L., Broman, G., Robèrt, K. H., Basile, G., & Trygg, L. (2017). An approach to business model innovation and design for strategic sustainable development. Journal of Cleaner Production, 140, 155–166. https://doi.org/10.1016/j.jclepro.2016.06.124
Ghoniyah, N., & Hartono, S. (2020). How Islamic and conventional bank in Indonesia contributing sustainable development goals achievement. Cogent Economics and Finance, 8(1). https://doi.org/10.1080/23322039.2020.1856458
Gliedt, T., Hoicka, C. E., & Jackson, N. (2018). Innovation intermediaries accelerating environmental sustainability transitions. Journal of Cleaner Production, 174, 1247–1261. https://doi.org/10.1016/j.jclepro.2017.11.054
Halimatussadiah, A., Farahmita, A., Machmud, Z., Siregar, A. A., Iskandar, S. D., & Sholihah, N. K. (2018). Bankers’ perception on the Implementation of sustainable finance in Indonesia. E3S Web of Conferences, 74, 1–6. https://doi.org/10.1051/e3sconf/20187401002
Hama Said, F. S., & Hassan, M. Q. (2017). The Role of Financial Corruption Management in Promoting Sustainable Development. Iraqi Administrative Sciences Journal, 1(2), 255–270. https://doi.org/10.33013/iqasj.v1n2y2017.pp255-270
He, B. J., Zhao, D. X., Zhu, J., Darko, A., & Gou, Z. H. (2018). Promoting and implementing urban sustainability in China: An integration of sustainable initiatives at different urban scales. Habitat International, 82(October), 83–93. https://doi.org/10.1016/j.habitatint.2018.10.001
Islam, M. S., Tseng, M.-L., & Karia, N. (2019). Assessment of corporate culture in sustainability performance using a hierarchical framework and interdependence relations. Journal of cleaner production, 217, 676–690.
Jan, A., Marimuthu, M., bin Mohd, M. P., & Isa, M. (2019). The nexus of sustainability practices and financial performance: From the perspective of Islamic banking. Journal of Cleaner Production, 228, 703–717.
Jan Jaap Bouma, M. J. and L. K. (2021). Sustainable Banking. In Angewandte Chemie International Edition, 6(11), 951–952.
Kemfert, C., & Schmalz, S. (2019). Sustainable finance: political challenges of development and implementation of framework conditions. Green Finance, 1(3), 237–248. https://doi.org/10.3934/gf.2019.3.237
Kumar, K., & Prakash, A. (2019). Examination of sustainability reporting practices in Indian banking sector. Asian Journal of Sustainability and Social Responsibility, 4(1). https://doi.org/10.1186/s41180-018-0022-2
Lagoarde-Segot, T. (2019). Sustainable finance. A critical realist perspective. Research in International Business and Finance, 47(June 2018), 1–9. https://doi.org/10.1016/j.ribaf.2018.04.010
Lavrinenko, O., Ignatjeva, S., Ohotina, A., Rybalkin, O., & Lazdans, D. (2019). The role of green economy in sustainable development (Case study: The eu states). Entrepreneurship and Sustainability Issues, 6(3), 1113–1126. https://doi.org/10.9770/jesi.2019.6.3(4)
Muhmad, S. N., & Muhamad, R. (2021). Sustainable business practices and financial performance during pre- and post-SDG adoption periods: a systematic review. Journal of Sustainable Finance and Investment, 11(4), 291–309. https://doi.org/10.1080/20430795.2020.1727724
Nizam, E., Ng, A., Dewandaru, G., Nagayev, R., & Nkoba, M. A. (2019). The impact of social and environmental sustainability on financial performance: A global analysis of the banking sector. Journal of Multinational Financial Management, 49, 35–53. https://doi.org/10.1016/j.mulfin.2019.01.002
Raluca Gh. Popescu, & Popescu. (2019). An Exploratory Study Based on a Questionnaire Concerning Green and Sustainable Finance, Corporate Social Responsibility, and Performance: Evidence from the Romanian Business Environment. Journal of Risk and Financial Management, 12(4), 162. https://doi.org/10.3390/jrfm12040162
Rocha, C. S., Antunes, P., & Partidário, P. (2019). Design for sustainability models: A multiperspective review. Journal of Cleaner Production, 234, 1428–1445. https://doi.org/10.1016/j.jclepro.2019.06.108
Schumacher, K., Chenet, H., & Volz, U. (2020). Sustainable finance in Japan. Journal of Sustainable Finance and Investment, 10(2), 213–246. https://doi.org/10.1080/20430795.2020.1735219
Trudeau, D. (2018). Integrating social equity in sustainable development practice: Institutional commitments and patient capital. Sustainable Cities and Society, 41(March), 601–610. https://doi.org/10.1016/j.scs.2018.05.007
Visser, W., & Brundtland, G. H. (2013). Our Common Future (‘The Brundtland Report’): World Commission on Environment and Development. The Top 50 Sustainability Books, 52–55. https://doi.org/10.9774/gleaf.978-1-907643-44-6_12
Weber, O. (2017). Corporate sustainability and financial performance of Chinese banks. Sustainability Accounting, Management and Policy Journal, 8(3), 358–385. https://doi.org/10.1108/SAMPJ-09-2016-0066
Weston, P., & Nnadi, M. (2021). Evaluation of strategic and financial variables of corporate sustainability and ESG policies on corporate finance performance. Journal of Sustainable Finance and Investment, 0(0), 1–17. https://doi.org/10.1080/20430795.2021.1883984
Wolff, S., Brönner, M., Held, M., & Lienkamp, M. (2020). Transforming automotive companies into sustainability leaders: A concept for managing current challenges. Journal of Cleaner Production, 276, 124179.
Zhang, K. Q., & Chen, H. H. (2017). Environmental performance and financing decisions impact on sustainable financial development of Chinese environmental protection enterprises. Sustainability (Switzerland), 9(12). https://doi.org/10.3390/su9122260
Zioło, M., Bak, I., Cheba, K., Spoz, A., & Niedzielski, P. (2021). Sustainable financial systems toward sustainability in finance. Institutional and managerial approach. Procedia Computer Science, 192, 4237–4248. https://doi.org/10.1016/j.procs.2021.09.200
How to Cite
Copyright (c) 2022 SRN Intellectual Resources
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright @2022. This is an open-access article distributed under the terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/) which permits unrestricted to copy and redistribute the material in any medium or format, remix, transform, and build upon the material for any purpose, even commercially.
This work is licensed under a Creative Commons Attribution 4.0 International License.