ESG Integration into Financial Markets: A Comprehensive Exploration of Concepts and Implementation

Year 2023, Volume: 20 Issue: 2, 133 - 147, 01.01.2024

Elif Acar

Abstract

This research paper aims to provide a comprehensive understanding of broad Environmental, Social, and Governance (ESG) practices and their implications, with a specific focus on their integration into financial products. The paper offers a general overview of ESG, including its key components, growing importance across sectors, historical evolution, regulatory developments, and challenges in reporting standardization efforts. It extensively discusses the transformation of ESG into financial products, such as ESG-focused indices, ESG-focused Exchange Traded Funds (ETFs), impact investing, green bonds, and ESG derivatives. The research aims to lay the groundwork for understanding the broader implications of ESG for businesses, investors, and society by adopting a pragmatic approach, emphasizing practical insights, while offering thought exercises for academic research.

Keywords

ESG, Environmental Social and Governance Practices, Regulatory Developments Financial Products, Derivatives

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