A Systematic Literature Review on the Ethical Capital Market: Insights Using the PRISMA Approach

Abstract

The ethical capital market has gained prominence as investors, policymakers, and corporations increasingly recognize the importance of integrating environmental, social, and governance (ESG) factors into financial decision-making. This paper presents a systematic literature review on the ethical capital market using the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) approach. The study aims to identify key themes, trends, and research gaps in the existing literature by analyzing scholarly articles published in leading academic journals between 2010 and 2024. The review process involved systematically identifying relevant literature from databases such as Scopus, Web of Science, and Google Scholar. After applying inclusion and exclusion criteria, selected studies were categorized into five key thematic areas: (1) growth of ethical investing, (2) ESG criteria and investment performance, (3) regulatory frameworks and policies, (4) ethical dilemmas and challenges, and (5) emerging trends in ethical finance. The findings indicate that ethical investing has gained traction due to increasing investor awareness, regulatory interventions, and technological advancements. However, challenges such as greenwashing, inconsistent ESG rating methodologies, and the lack of standardized regulatory frameworks persist. This study highlights significant research gaps, particularly in the areas of AI-driven ethical investing, cross-country comparative studies, and standardized ESG measurement frameworks. The paper concludes with recommendations for policymakers, investors, and researchers to enhance ethical financial practices and foster a more transparent and sustainable capital market. Future research should focus on integrating technological innovations to improve the credibility and efficiency of ethical investment strategies.