Sustainability in Finance and Economics

Abstract

The chapter aims to draw attention to the significant gap in the existing research, along with the issues of sustainable development (SD). The concept of SD, if placed in an economic context, requires much attention, but seeing the cognitive class from the perspective of the discipline of finance, the latter is unsatisfactory, with questions remaining unanswered. At the same time, it is important to draw attention to the amount of financial resources allocated and disbursed to focus on SD. Identification of financial phenomena is seen as a priority. The manuscript deals with two research questions that have been formulated as follows: (1) how to include multidimensional, holistic, and long-term perspectives of SD into finance; and (2) how sustainable finance (SF) impacts on the efficiency of financing of SD. A few suggestions can be made to solve the research problem and include the SD perspective in finance: (1) internalisation of externalities in the calculation of an investment (i.e. in a company's present value); (2) assigning a long-term horizon to investments, also as a necessity for maintaining the prospect of safeguarding financial capital for the future; (3) progressive substitution of financial ratios with sustainability ratios; and (4) a changing perspective on the connotation of financial profits.