Challenges and prospects for sustainable investment - A systematic literature review

Global interest in sustainable finance, amplified by the COVID-19 pandemic, has driven sustainable investment (SI) research. Environmental, Social, and Governance (ESG) criteria reflect an entity's commitment to sustainability. Although investors prioritize these indices in investment decisions, challenges persist, such as a lack of clear SI definitions, imprecise ESG metrics, and heterogeneous performance. This systematic review based on the PRISMA 2020 protocol, examined literature from Scopus and WoS, identifying 90 documents. The integration of ESG aspects in sustainable finance to promote a more sustainable economy is highlighted, underlining the importance of ESG scores as a guide for investors. A discrepancy between perceptions and realities in this area is noted. Sustainable investment is differentiated from conventional investment, with firms showing high ESG percentages positively evaluated. Drivers and barriers to SI adoption are identified, including technological growth and weak regulations, especially in developing economies. It is concluded there is no single effective strategy due to variability in outcomes influenced by multiple factors. A framework to address these challenges is proposed, stressing the need for a precise SI definition to ensure successful sustainable investments in the transition to a sustainable economy.