ESSENCE OF THE CONCEPT OF RESPONSIBLE INVESTMENT

Abstract

The content of the concept of «responsible investment» was studied. It has been established that the term «responsible  investment» is relatively new in economic science, but the thesaurus of this concept is quite wide and already has several synonymous meanings – socially responsible investing (SRI; Impact Investing), social investment (Social Investment), green investing (Eco-investing, Green Investing), the concepts of «ESG-bonds», «green financial instruments», etc. arose. It is substantiated that responsible investing is an investment activity that is carried out with  the aim of creating a positive, measurable social and/or environmental effect and at the same time receiving a financial benefit. The fast-growing responsible investment market provides financial resources to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance and affordable basic services, including housing, health and education. The main characteristics of responsible investment are defined: focus, use of objective and verifiable data in the development of responsible investment projects, effectiveness of responsible investment, promotion of the growth of the responsible investment industry. The differences between responsible investment and other types of investment activity are outlined, including: the goal of responsible investment is to achieve two equal goals – financial and social; creation of an integrated value that takes  into account both the goals of the investor and the social effect of the implementation of investment projects; the active role of many interested business entities in the process of responsible investment, including the state; training of specialized personnel with appropriate competencies: experience in solving social and environmental problems, professional knowledge in the field of corporate finance, the ability to assess the social and financial results of the project; formation of a specialized system for evaluating the effectiveness of responsible investments; measurement and evaluation of achieved social and financial results; new forms of interaction between investors and entrepreneurs: joint interaction between benefactors and investors, benefactors and entrepreneurs; emergence of new financial instruments: social bonds, ESG bonds, etc. Problems that investors may face when implementing responsible investment projects are highlighted. A system of financial and non-financial principles of responsible investment has been developed. The use of this system is expected to contribute to the effectiveness of business entities in the field of responsible investment.