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Finance & Economics Tracks > Track 7: Ethical, Social, Environmental and Behavioral FinanceTrack Chairs:
The term ethical finance refers to the endorsement (and embeddedness) of ethical issues as well as environmental, social, and governance (ESG) aspects in investment strategies. In fact, responsible governance, sustainability, social acceptability and inclusiveness engender a crucial influence on borrowers’ and investors’ orientations and practices. The field of ethical, social and behavioral finance is concerned and interacts with human and organizational values and addresses the ecosystemic, strategic, processual and, thus, practical alignment of companies. It calls for research on the motivations by which ethical values and deontological principles influence, manifest themselves and inform business decision-making and practices. In the present days, a new financial sub-discipline called behavioral finance has ignited a wave in explaining the behavioral aspects of investment decisions. It is becoming an essential part of the decision-making process because it has a great influence on investors’ decision-making behavior and will help them to select a better investment option. Investors are generally less able to objectively evaluate companies’ risks and returns and tend to be emotionally biased in their trading decisions. Many economic and financial theories presume that investors act rationally; however, they are only human. They act according to market sentiments and some even follow their gut feeling when making financial decisions; therefore, it is necessary to examine the factors that prompt the investors to make investment decisions. Many researchers have discussed the investors' behavior and tried to enhance the understanding of people managing investments in different ways; it is mainly personal characteristics that influence investment decision-making. The nature of psychological factors and individuals’ behavior at the time of investment decision-making are important to discuss. In these times of crises, a stellar attention and a growing recognition is placed by investors (as well as institutional, retail and company ones) and financial experts on the valuable, consistent, and, thus, measurable, environmental, social and economic effects of sustainable development policies, both in developed and in emerging/in-transition economies. Ethical finance and investment are gaining traction at an unprecedented level, both internationally and nationally. Previously, it was primarily the voluntaristic choice, thus, the responsibility of ethically compliant finance providers and investors to support, recognize and label enterprises with an environmental or social purpose. However, ethical finance movies from ‘anomic novelty’ to ‘canonic mainstream’, from heterodoxy to orthodoxy. From the disruptive to the expectable, ethical finance is called to become a conventional (even if not yet ordinary) financial practice. Research testifies of the increasing endorsement of ESG factors in organizational strategies and investment decisions and, more globally, of the impellent corporate reporting on the social, environmental and territorial impact of economic activity, considering the Global Compact principles as well as the UN Sustainable Development Goals. According to the Global Ethical Finance Forum, the investment in assets managed ethically is massively expanding around the world with more retail and professional investors endorsing ESG variables as key-factors for materiality matrix drawing, risk assessment and borrowing cost evaluation, financial products (or corporate companies) strategy positioning as well as investment decision-making and as overall rewards expectations. As the finance markets have evolved, ESG principles have to be considered, at the age of climate change, as new regular, main-stream and socially indispensable standards, offering critical safeguards to underpin investment and finance decisions. When funds and lenders are perceived to be failing to use appropriate ESG elements in their decision-making processes, they are increasingly being questioned. Accordingly, the literature in finance, economy and strategic management investigates and assesses the positive (or suitable) impacts of holistic, integrated, strategic as well as process-based and monitored CSR / Sustainability / Diversity-Inclusion policies world-wide, adopting a range of complementary (geographical, methodological and level-based) perspectives. Ethical and social finance constitutes a stimulating, compelling and dynamic area of research and experimentation for 21st-century businesses. The present track provides a fresh look at social, ethical aspects along with behavioral finance implementation and sustainability and inclusive management providing organizations, business and society, with global, positive, and long-term repercussions. The track aims at investigating ESG looking at new challenges for companies and markets, new venues for research and new issues for citizens and society. Topics of interest include, but are not limited to:
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