Sustainable development also implies corporate social responsibility, i.e. the practice according to which the typical objectives of financial management (such as the optimization of the relation between risk and yield in a given time period) are considered together with environmental, social and/or governance issues. In fact, many studies show that this kind of economic actions can often lead to excellent yield results in the long term, although they are more onerous compared to other investment options in the short term.
Hence, the macrosystem of corporate social responsibility is represented by sustainable finance, the objective of which is to create a profit in a way that invested capital is socially useful and that the undertaken actions do not exceed the loading capacity of the environmental system concerned.
For this reason, sustainable finance, in its turn, is part of ethical finance, i.e. an economic choice that adopts investment solutions whose aim is not exclusively represented by the pursuit of profit in the short term. In particular, ethical finance can also refer to investments that are useful for particular interest groups (such as political parties and religious groups). For this reason, only sustainable finance is exclusively connected to the principle of sustainable development.
Definition of Sustainable Development:
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (EU, Brundtland Report, 1987)
According to the Journalism Award on Sustainability of Entel/School of Journalism of the Catholic University of Milan (Almed), the actions of corporate social responsibility are based on the concept of sustainable development, which is composed of three constituent parts: environmental sustainability, social sustainability and sustainable finance.