Finance as an Instrument to a Sustainable Company: An Introduction to the Concept of Stakeholder Equity

Current developments on financial markets show an increasing interest for both socially responsible investments (SRI) and sustainable corporate responsibility (CSR). The primary goal of this study is the application of sustainable finance as a connection between CSR and SRI. The first part of this study argues that finance urgently needs a sustainability approach to connect the initiatives from the CSR companies with the investor preferences of the SRI capital market. This part is entirely devoted to the exchange syntax of sustainable finance. The exchange syntax refers to the terminology of the distinguished sustainability concepts, their interconnections and the ethical values behind them. Traditional finance is used as a benchmark for describing new developments. The second part of the analysis further develops the concept of sustainable corporate finance, defining it as a multi-attribute approach to finance the company in such a way that all of the company's financial, social and environmental elements are interrelated and integrated. The concept of stakeholder equity is introduced as a new instrument of sustainable finance.

This study focuses on the development of terminology, concepts and instruments in finance to introduce sust ainable development into the financial practise and literature. The main concept -Stakeholder Equity - is introduced as a future instrument to realise a sustainable economy based on free market choices in the civil society.