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Рік заснування видання - 2011


11.12.2022 00:38

[2. Економічні науки]

Автор:  Tetiana Skab, Fourth-Year Student, Faculty of International Relations, Ivan Franko National University of Lviv, Ukraine; Olga Tsapko-Piddubna, Department of International Economic Analysis and Finance, Ivan Franko National University of Lviv

The economic outcomes of the Covid-19 pandemic are affecting all areas of the world economy, including capital flows, business operations, employment, and jobs.

According to the World Bank, 70 to 100 million people will face extreme poverty as a COVID-19 consequence. The United Nations estimates that the pandemic could lead nearly 490 million people across 70 countries back to poverty, broadly defined as people who lack access to basic shelter or clean water.

Governments in developed countries have spent more than 10 % of GDP on helping to ease the economic crisis after COVID-19. Emerging markets spend about 3 %, while the poorest countries spend less than 1 % with smaller budgets [2]. Overall, global investment in recovering from COVID-19 is expected to equate to $20 trillion [4]. 

As far as we are concerned, public and business development strategies should simultaneously eliminate the negative consequences of COVID-19 and stimulate economic activities regarding Sustainable Development Goals (SDG).

Back in 2020, the Covid-19 pandemic revealed a whole range of systemic social problems and brought them to the forefront of public discourse. In the past, these problems were at the very end of environmental agenda because they are more difficult to define and measure. The environmental effects of lockdowns related to the Covid-19 pandemic (e.g. GHGs emission reduction), along with signs of climate change around the world, have increased interest in sustainable investing.

When it comes to the term “sustainable investing”, R. Hartill defines it as the investment that “seeks to align investment decisions with the investor’s social and environmental values, while still generating long-term returns” [1].

In spite of increased volatility in the market over the past year, the sustainable investing market has grown steadily, as evidenced by the number of new sustainability-themed products, new capital flows and new initiatives enacted by exchanges and securities market regulators.

The pursuit of sustainable development has led to the rapid growth of financial products related to sustainable development. Based on UNCTAD, the value of sustainable development-themed investment products in global capital markets was $3.2 trillion in 2020, with an increase of more than 80% from 2019. “These products include sustainable funds (over $1.7 trillion), green bonds (over $1 trillion), social bonds ($212 billion) and mixed-sustainability bonds ($218 billion)” is stated in the World Investment Report. The number of sustainability-themed funds totaled to 3,987 by June 2020, (a 30% increase compared to 2019). By the end of 2021 this indicator grew to 5,932 (a 61% increase compared to 2020) [5,6].

Figure 1 – Sustainable funds and assets under management, 2010-2021

Source: UNCTAD [4]

Developed markets continue to top the list of the growth of sustainable funds. Europe takes up a share of 81 % of assets under management (AUM). The United States comes as the second largest market, representing only 1 % of its total fund market of sustainable funds. China closes the list of three largest sustainable fund market worldwide, with AUM of around $50 billion [5,6].

Several concerns should be pointed out. First, despite rapid growth in the last years, sustainable funds still only provide nearly 4% of the global funds market [6]. 

In addition, most functioning funds are self-labelled and require better standards and more precise data to evaluate their sustainability credentials and impact, raising concerns about greenwashing. 

Moreover, most of the time developing countries are excluded from the sustainable fund market. 

Finally, Russia’s invasion of Ukraine exposed the shortcomings of sustainable investing. The war indicated what should have been obvious to ESG (Environmental, Social, Government) investors: the country cannot defend itself without weapons, and that meant funding arms manufacturers. Even nuclear weapons, banned by nearly all ESG funds, are suddenly more attractive as a deterrent to Russia [3].

Boosting the investment priority for sustainability in developing countries will require local governments to work alongside the recovery funds, private sector, and banks. However, it also presents new challenges, such as coordination problems, poor national public investment systems, and others. Addressing the challenges and maximizing the impact of the investment package for a sustainable and inclusive recovery anticipates the following points: 

• SDG data and reporting enhancement. Sustainable recovery investing is relatively new and reporting rules are not standardized properly enough yet across countries. Certainly, without standardization and reporting controls, data can be misleading. By implementing a comprehensive and precise set of standardization, investors will be assured that the funds are not picking up on SDG facts.

• Investment priority for high-impact sustainable projects. As stated previously, developed countries (the US, and Europe, in particular) were able to attract most SDG investments during the pandemic. Now, these recovery funds should contribute to the SDG initiatives in developing economies through international project financing.

• Investing and lending opportunities provided by green banks. These banks can help direct and leverage financial resources to investments that provide near-term relief (such as through construction jobs) and long-term prosperity (by reducing energy costs and promoting new industries).

Overall, green recovery programs vary from country to country, depending on macroeconomic conditions, budgets, capacity, and ambition to deal with the climate crisis, and level of commitment to other policy goals. Nonetheless, the pandemic has spurred change as more people realize the urgency of addressing sustainability issues and the importance of balanced ecosystems for health and welfare.


1. Hartill R. - What Is Sustainable Investing? – [Cited 2022, 31 January] – Available from: 

2. Kurbiel L. - Investing in the SDGs in a post COVID world – [Cited 2021, 26 January]  - Available from:  

3. Mackintosh J. – War in Ukraine Reveals Flaws in Sustainable Investing – [Cited 2022, 27 March] – Available from: The Wall Street Journal 

4. Shulla K., Voigt B.F., Cibian S., Scandone G., Martinez E., Nelkovski F., Salehi P. – Effects of COVID-19 on the Sustainable Development Goals (SDGs) – [Cited 2021, 17 March] – Available from: 

5. United Nations Conference on Trade and Development – World Investment Report 2021. Investing in Sustainable Recovery– United Nations Publications, 405 East 42nd Street, New York, New York 10017, United States of America – Available from: 

6. United Nations Conference on Trade and Developmen – World Investment Report 2022. International Tax Reforms and Sustainable Investment – United Nations Publications, 405 East 42nd Street New York, New York 10017, United States of America – Available from: 


Supervisor: Olga Tsapko-Piddubna,Department of International Economic Analysis and Finance, Ivan Franko National University of Lviv, Ukraine

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