Sustainable Investment—A Solution to Reduce Environmental Footprint

Kęstutis Biekša, Aurelija Zonienė and Violeta Valiulė
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Kęstutis Biekša: Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania
Aurelija Zonienė: Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania
Violeta Valiulė: Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania

Energies, 2021, vol. 14, issue 11, 1-15

Abstract: The environmental footprint (EF) indicator has emerged as a tool to measure human demand for productive land and water and it is used for the evaluation of the impact of products or economic activities on the environment. There are many indicators that are used in the decision making for the investment in the power sector, however, predominant are the economic indicators which underestimate the depreciation of natural capital (environment) and the value added generated by the public services. Many research studies have been carried out in an attempt to demonstrate the versatility of the EF by extending its applicability not only to environmental assessment, but also to use it, among other economic indicators, when assessing sustainable investment. Sustainable investment (SI) combines fundamental analysis and engagement with an evaluation of environmental, social and corporate governance (ESG) factors. The purpose of this article is, upon evaluating the EF, to identify the opportunities for the EF reduction through sustainable investment in the electricity production sector in EU countries. Environmental footprint analysis has been performed by using sustainable process index program SPIonExcel (SPI), which is one of the methods in the EF family. SPI is a useful tool for assessing ecological problems and finding sustainable solutions in the life cycle of energy production process. This research has revealed that the function of the footprint reduction depends directly on investments in renewable energy source (RES) technologies, but not all investments can be sustainable. Countries mainly invest in the development of wind energy and solar PV technologies and gradually reduce their inland production capacities from fossil fuel. Although SI in RES technologies reduces the EF, this is not enough to reduce it substantially because there are limitations for installing new power capacities. Consequently, countries tend to invest in the development of electricity networks. The conclusion can be drawn as follows: the reduction of the EF of electricity could be achieved by developing RES technologies since the major part of electricity is produced by using non-renewable resources. It is essential to develop new technologies as soon as possible in order to reduce EF as much as possible, and this can only be achieved through systematic sustainable investment.

Keywords: sustainable investment; environmental footprint; sustainable development; electricity production (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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