The Role of Investment in Creating a Sustainable Financial Future: Strategies and Tools

Kateryna Redko; Dmytro Riznyk; Sergii Nikolaiev; Oleksandr Yatsenko; Olena Shuplat

doi:10.57125/FEL.2024.09.25.02

Authors

Kateryna Redko State Institution “G. M. Dobrov Institute for scientific and technological potential and science history studies“ NASU, Kyiv, Ukraine https://orcid.org/0000-0003-2609-3471
Dmytro Riznyk Ivan Franko National University of Lviv, Lviv, Ukraine https://orcid.org/0000-0003-3188-5158
Sergii Nikolaiev Dahl East Ukrainian National University, Kyiv, Ukraine https://orcid.org/0009-0005-1198-9656
Oleksandr Yatsenko Bohdan Khmelnytsky Cherkasy National University Educational, Scientific Institute of Economics and Law, Cherkasy, Ukraine https://orcid.org/0000-0002-7756-4125
Olena Shuplat Kyiv National Economic University named after Vadym Hetman, Kyiv, Ukraine https://orcid.org/0000-0001-6318-4714

DOI:

https://doi.org/10.57125/FEL.2024.09.25.02

Keywords:

investment sustainability, green investment strategies, risk management, financial innovations, economic growth

Abstract

The relevance of the modern formation of the investment market depends on many aspects of socio-economic life, which makes it possible to evaluate the role of investment mechanisms in forming financial stability differently. The study aims to explore the role of investments in creating sustainable financial environments and to analyse relevant opportunities, strategies and tools that can be used in the future. The study employed the systematic review method with data selection following PRISMA guidelines. The search for publications was conducted in the Scopus and Web of Science databases from 2015 to 2024. As a result of applying inclusion and exclusion criteria, 36 scientific papers were selected. The study results established that the stable existence of modern financial systems is based on attracting investments. It is shown that states with a high level of development of social indicators and human capital simultaneously have higher indicators of financial stability. States with high indices of economic freedom and human capital attract the attention of investors due to the comprehensibility of the functioning of local business environments. Current investment trends dictate the preference for projects related to environmental friendliness, opposition to fraudulent schemes and dishonesty. Setting sustainable development goals aims to develop financial markets, which impacts human capital processes, technological solutions in production, etc. It has been demonstrated that, in some cases, it is not easy to fulfil the current requirements of investors, taking into account certain cultural, economic and social development features. The conclusion emphasises that it is especially worth considering the complexity of implementing investment projects in times of instability, particularly those related to a state of emergency or military operations.

References

Addy, W. A., Ofodile, O. C., Adeoye, O. B., Oyewole, A. T., Okoye, C. C., Odeyemi, O., & Ololade, Y. J. (2024). Data-driven sustainability: How fintech innovations are supporting green finance. Engineering Science & Technology Journal, 5(3), 760–773. https://doi.org/10.51594/estj.v5i3.871

Alkaraan, F., Elmarzouky, M., Hussainey, K., & Venkatesh, V. G. (2023). Sustainable strategic investment decision-making practices in UK companies: The influence of governance mechanisms on synergy between Industry 4.0 and circular economy. Technological Forecasting and Social Change, 187, Article 122187. https://doi.org/10.1016/j.techfore.2022.122187

Ari, I., & Koc, M. (2019). Sustainable financing for sustainable development: Agent-based modeling of alternative financing models for clean energy investments. Sustainability, 11(7), Article 1967. https://doi.org/10.3390/su11071967

Arnone, M., & Crovella, T. (2023). The role of green finance in supporting maritime sustainable development. In T. Walker, H. J. Turtle, M. Kooli, & E. Nikbakht (Eds.), Fintech and sustainability (pp. 53–87). Cham: Palgrave Macmillan. https://doi.org/10.1007/978-3-031-40647-8_4

Bąk, I., & Cheba, K. (2020). ESG risk as a new challenge for financial markets. In M. Ziolo (Ed.), Finance and sustainable development: Designing sustainable financial systems (pp. 21–39). Routledge. https://doi.org/10.4324/9781003011132-3

Becchetti, L., Cordella, M., & Morone, P. (2022). Measuring investments progress in ecological transition: The green investment financial tool (GIFT) approach. Journal of Cleaner Production, 357, Article 131915. https://doi.org/10.1016/j.jclepro.2022.131915

Bolton, B. (2015). Valuation of sustainable financial investments. In Sustainable financial investments (pp. 121–180). New York: Palgrave Macmillan. https://doi.org/10.1057/9781137411990_5

Denysenko, M., & Breus, S. (2022). Economic development of Ukraine: Modern trends in ensuring the state economic security. In 2nd International conference on relationship between public administration and business entities management. Scientific Center of Innovative Researches OÜ. https://doi.org/10.36690/rpabm-2022-127

Dluhopolskyi, O., Kozlovskyi, S., Popovskyi, Y., Lutkovska, S., Butenko, V., Popovskyi, T. ... Kozlovskyi, A. (2023). Formation of the model of sustainable economic development of renewable energy. ECONOMICS, 11(2), 51–78. https://doi.org/10.2478/eoik-2023-0050

Fulton, M., Kahn, B. M., & Sharples, C. (2012). Sustainable investing: Establishing long-term value and performance. SSRN. https://doi.org/10.2139/ssrn.2222740

Hristov, I., Chirico, A., & Appolloni, A. (2019). Sustainability value creation, survival, and growth of the company: A critical perspective in the sustainability balanced scorecard (SBSC). Sustainability, 11(7), Article 2119. https://doi.org/10.3390/su11072119

Iradianty, A., & Ajeng, A. S. (2022). Analysis of differences financial literacy and investment decisions between student in Bandung city and Cirebon city. In S. Noviaristanti & O. H. Boon (Eds.), Sustainable future: Trends, strategies and development (pp. 69–72). Routledge. https://doi.org/10.1201/9781003335832-18

Kholjigitov, G. (2023). Sustainable finance and investments: Principles, tools, and effectiveness assessment. SSRN. https://doi.org/10.2139/ssrn.4541053

Kozlovskyi, S., Kulinich, T., Vechirko, I., Lavrov, R., Zayukov, I., & Mazur, H. (2024). Relationship between net migration and economic development of European countries: Empirical conclusions. Problems and Perspectives in Management, 22(1), 605–618. https://doi.org/10.21511/ppm.22(1).2024.48

Kozlovskyi, S., Petrunenko, I., Mazur, H., Butenko, V., & Ivanyuta, N. (2022). Assessing the probability of bankruptcy when investing in cryptocurrency. Investment Management and Financial Innovations, 19(3), 312–321. https://doi.org/10.21511/imfi.19(3).2022.26

Kwilinski, A., & Trushkina, N. (2023). Green investments as tools for stimulating the sustainable financing of logistics systems development. E3S Web of Conferences, 456, Article 01003. https://doi.org/10.1051/e3sconf/202345601003

Lutsiak, V., Lavrov, R., Furman, I., Smitiukh, A., Mazur, H., & Zahorodnia, N. (2020). Economic aspects and prospects for the development of the market of vegetable oils in a context of formation of its value chain. Montenegrin Journal of Economics, 16(1), 155–168. https://doi.org/10.14254/1800-5845/2020.16-1.10

Lysenko, S., Bobro, N., Korsunova, K., Vasylchyshyn, O., & Tatarchenko, Y. (2024). The role of artificial intelligence in cybersecurity: Automation of protection and detection of threats. Economic Affairs, 69(1), 43–51. https://doi.org/10.46852/0424-2513.1.2024.6

Mahanama, T. K., Shirvani, A., Rachev, S. T., & Fabozzi, F. J. (2024). Environmental indices in global markets: Innovating financial tools for sustainable investments. SSRN. https://doi.org/10.2139/ssrn.4675036

Man-Kit, B. (2015, September 1). Sustainable development and financial markets: Old paths and new avenues. CFA Institute Research and Policy Center. https://doi.org/10.2469/dig.v45.n9.7

Naeem, M. A., Karim, S., Rabbani, M. R., Bashar, A., & Kumar, S. (2022). Current state and future directions of green and sustainable finance: A bibliometric analysis. Qualitative Research in Financial Markets, 15(4), 608–629. https://doi.org/10.1108/qrfm-10-2021-0174

Oyeleke, M. (2024). Digital disruption in the banking and financial sector: Creating a sustainable framework for the future of banking in Nigeria. SSRN. https://doi.org/10.2139/ssrn.4703991

Popescu, I.-S., Hitaj, C., & Benetto, E. (2021). Measuring the sustainability of investment funds: A critical review of methods and frameworks in sustainable finance. Journal of Cleaner Production, 314, Article 128016. https://doi.org/10.1016/j.jclepro.2021.128016

Shah, D. (2024). Sustainable finance and ESG investing. International Journal for Research in Applied Science and Engineering Technology, 12(2), 412–416. https://doi.org/10.22214/ijraset.2024.58346

Shirvani, A., Hu, Y., Rachev, S. T., & Fabozzi, F. J. (2020). Option pricing with mixed lévy subordinated price process and implied probability weighting function. The Journal of Derivatives, 28(2), 47–58. https://doi.org/10.3905/jod.2020.1.102

Serdarušić, H., Pancić, M., & Zavišić, Ž. (2024). Green finance and fintech adoption services among croatian online users: How digital transformation and digital awareness increase banking sustainability. Economies, 12(3), Article 54. https://doi.org/10.3390/economies12030054

Soundarrajan, P., & Vivek, N. (2016). Green finance for sustainable green economic growth in India. Agricultural Economics (Zemědělská ekonomika), 62(1), 35–44. https://doi.org/10.17221/174/2014-agricecon

Stjepanović, S., Tomić, D., & Škare, M. (2019). Green GDP: An analysis for developing and developed countries. E+M Ekonomie a Management, 22(4), 4–17. https://doi.org/10.15240/tul/001/2019-4-001

Stjepanović, S., Tomić, D., & Škare, M. (2022). A new database on Green GDP; 1970-2019: A framework for assessing the green economy. Oeconomia Copernicana, 13(4), 949–975. https://10.24136/oc.2022.027

Suehrer, J. (2019). The future of FDI: Achieving the Sustainable Development Goals 2030 through impact investment. Global Policy, 10(3), 413–415. https://doi.org/10.1111/1758-5899.12714

Taghizadeh-Hesary, F., & Yoshino, N. (2020). Sustainable solutions for green financing and investment in renewable energy projects. Energies, 13(4), 788. https://doi.org/10.3390/en13040788

United Nations Development Programme. (n.d.). Human Development Index. https://hdr.undp.org/data-center/human-development-index#/indicies/HDI

Wackernagel, M., Hanscom, L., & Lin, D. (2017). Making the Sustainable Development Goals consistent with sustainability. Frontiers in Energy Research, 5, Article 18. https://doi.org/10.3389/fenrg.2017.00018

Weber, O. (2014). The financial sector's impact on sustainable development. Journal of Sustainable Finance & Investment, 4(1), 1–8. https://doi.org/10.1080/20430795.2014.887345

Yilan, G., Cordella, M., & Morone, P. (2022). Evaluating and managing the sustainability of investments in green and sustainable chemistry: An overview of sustainable finance approaches and tools. Current Opinion in Green and Sustainable Chemistry, 36, Article 100635. https://doi.org/10.1016/j.cogsc.2022.100635

The Role of Investment in Creating a Sustainable Financial Future: Strategies and Tools

Authors

DOI:

Keywords:

Abstract

References

Downloads

Published

How to Cite

Issue

Section

License

issn

quicklinks

Other journals