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

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 Clima...

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Autores principales: Yoshino, Naoyuki, Taghizadeh-Hesary, Farhad, Otsuka, Miyu
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Inc. 2021
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7354763/
https://www.ncbi.nlm.nih.gov/pubmed/32837379
http://dx.doi.org/10.1016/j.frl.2020.101695
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author Yoshino, Naoyuki
Taghizadeh-Hesary, Farhad
Otsuka, Miyu
author_facet Yoshino, Naoyuki
Taghizadeh-Hesary, Farhad
Otsuka, Miyu
author_sort Yoshino, Naoyuki
collection PubMed
description 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 CO(2), NO(x), and plastics, globally with the same tax rate. Global taxation on pollution will lead to the desired portfolio allocation of assets.
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spelling pubmed-73547632020-07-13 Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals Yoshino, Naoyuki Taghizadeh-Hesary, Farhad Otsuka, Miyu Financ Res Lett Article 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 CO(2), NO(x), and plastics, globally with the same tax rate. Global taxation on pollution will lead to the desired portfolio allocation of assets. Elsevier Inc. 2021-01 2020-07-12 /pmc/articles/PMC7354763/ /pubmed/32837379 http://dx.doi.org/10.1016/j.frl.2020.101695 Text en © 2020 Elsevier Inc. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Yoshino, Naoyuki
Taghizadeh-Hesary, Farhad
Otsuka, Miyu
Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title_full Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title_fullStr Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title_full_unstemmed Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title_short Covid-19 and Optimal Portfolio Selection for Investment in Sustainable Development Goals
title_sort covid-19 and optimal portfolio selection for investment in sustainable development goals
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7354763/
https://www.ncbi.nlm.nih.gov/pubmed/32837379
http://dx.doi.org/10.1016/j.frl.2020.101695
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