Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals

Naoyuki Yoshino (), Farhad Taghizadeh-Hesary () and Miyu Otsuka

Finance Research Letters, 2021, vol. 38, issue C

Abstract: The Covid-19 pandemic and global economic recession has shrunk global energy demand and collapsed fossil fuel prices. Therefore, renewable energy projects are losing their competitiveness. This endangers the achievement of several Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change. Various consulting companies define the SDGs differently. Institutional investors hire consulting companies and allocate their investment based on the consultants’ suggestions. This paper theoretically shows that the current allocation of investors by considering SDG based on various consulting companies will lead to distortion in the investment portfolio. The desired portfolio allocation can be achieved by taxing pollution and waste such as CO2, NOx, and plastics, globally with the same tax rate. Global taxation on pollution will lead to the desired portfolio allocation of assets.

Keywords: sustainable development goals; optimal portfolio selection; Covid-19; carbon tax; standard pollution tax (search for similar items in EconPapers)
JEL-codes: H23 Q01 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612320300854
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:38:y:2021:i:c:s1544612320300854

DOI: 10.1016/j.frl.2020.101695

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().