ABSTRACT
A decade after the World Business Council for Sustainable Development (WBCSD) made its first hesitant foray into the investment arena, its president, Björn Stigson, was in no doubt that ‘financial markets are key in the pursuit of sustainable development because they hold the scorecard, allocate and price capital, and provide risk coverage and price risks’. Yet, Stigson added that ‘if financial markets do not understand and reward sustainable behaviour, progress [in developing more sustainable business practices] will be slow’ (Stigson, 2003, p6). The clear implication is that capital markets can be both a constraint and a facilitator of improved sustainability.
