Sustainable finance, ethical finance, green finance: terms used to describe the ways in which financial flows can be used to achieve a purpose not linked to economic or financial returns. However, even traditional mainstream finance is increasingly affected by issues of climate change and sustainability.
Our Centre examines the role that the investment and insurance industry, financial markets, central and development banks, and policy makers do have, could have, and should have in building a sustainable world. We focus in particular on the integration of climate change risks and opportunities as well as broader sustainability issues into investment processes and financial markets. We look to track flows of capital, investment, and finance, and seek to understand the role of different types of economic and financial actors in scaling-up flows.
Indicative research projects
- Tracking levels of investment and finance in climate-related areas and understanding the role of different types of economic and financial actors in scaling-up capital flows.
- Exploring how climate metrics and disclosure of climate risks can improve capital allocation in financial markets, and providing tools to identify and assess specific risks and opportunities across different asset classes. This includes the implementation of TCFD (Task Force on Climate-related Financial Disclosures) and similar financial disclosure approaches.
- Understanding the economic and financial consequences of climate change, assessing existing policies, and designing a more effective macro-financial policy framework.
- Identifying how central banks' and financial authorities' models should be adapted to facilitate the interaction of climate change and monetary and fiscal policies in a unified framework, including the modelling of the interaction between macroeconomic shocks from climate change and financial stability shocks.
- Examining the issue of actual impact and additionally in relation to financial products, funds, and financial stability shocks.
- Designing carbon markets and other forms of carbon pricing to achieve climate change mitigation objectives at least cost.
- Tracking and examining the volume, success, and credentials of funds, bonds, and other investment products established with a stated green or sustainability purpose.