Financial Instruments

Wolfgang Spiess-Knafl ()
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Wolfgang Spiess-Knafl: Munich Business School

Chapter Chapter 5 in The Sustainable Finance Operating System, 2025, pp 97-127 from Palgrave Macmillan

Abstract: Abstract This chapter explores the diverse range of financial instruments that function as the operational “Applications Layer” within the Sustainable Finance Operating System, translating rules, standards and data into directed capital flows. It classifies these instruments first by their intended purpose and examines the pathways capital follows. The chapter then details foundational sustainable investment techniques such as Socially Responsible Investing (SRI), ESG Integration and Impact Investing, highlighting their distinct motivations and approaches. Furthermore, the chapter analyzes instruments based on their financial structure, discussing equity strategies in public and private markets, various debt instruments like green, social, sustainability and sustainability-linked bonds, and loans as well as innovative structures like blended finance and market-based mechanisms such as carbon markets. It addresses the ongoing debate regarding the financial returns of sustainable finance, exploring the link between ESG factors and corporate or portfolio performance as well as the fundamental considerations in valuing investments that incorporate non-financial objectives alongside financial ones.

Keywords: Financial instruments; Socially responsible investing; ESG integration; Impact investing; Financial returns (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-031-97499-1_5

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DOI: 10.1007/978-3-031-97499-1_5

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