Highlights from GRASFI 2022

Insights into sustainable finance from the leading research conference in the field, co-hosted by CSP in Zurich

Photo: © superpeng

On a sunny afternoon in early September, Zurich’s new art museum building–the Neue Kunsthaus–welcomed over 250 professionals from across academia, industry and the public sector for the world’s foremost research conference on sustainable finance: the 5th Annual GRASFI Conference.

Founded in 2017 as a network to promote rigorous academic research on sustainable finance and investment, the Global Research Alliance for Sustainable Finance and Investment (GRASFI) now consists of 28 member universities. “Our theory of change with GRASFI has always been simple,” said GRASFI Founder and current Co-Chair Ben Caldecott of Oxford, “to offer a platform for change in sustainable finance and address the lack of academic fora and large-scale international collaborations in this field.” To deliver on pressing goals like the SDGs, “our growing community of academic researchers will need to be here for the long haul,” he said. “GRASFI was established to support this.” The success of this approach was on full display at this year’s conference.

“As a founding member university located in a global finance center, it was an honor and a joy to co-host this year’s conference in Zurich,” said Falko Paetzold, co-host and master of ceremony at GRASFI 2022. As the network’s first fully in-person event since the outbreak of the Coronavirus pandemic, the gathering offered a long-awaited meeting point for professionals at the leading edge of sustainable finance research.

Photos: © superpeng, © Byung Jun Kim and © Michaela Reimann

This year in Zurich

The 2022 Academic Committee reviewed over 170 submissions and chose the top 42 research papers to be presented at the conference. The selected authors had the opportunity to share their findings and receive feedback from professionals from across academia and industry. Session topics ranged from climate risk and policy to measurements and metrics to corporate sustainability and investor influence. The third and final day featured a series of in-depth workshops dedicated to bridging science and practice.

In addition to those presenting papers, speakers included Deputy State Secretary Stefan Flückiger of the Swiss Federal Department of Finance, Swiss climate activist and UNFCCC YOUNGO Focal Point emeritus Marie-Claire Graf and Charly Kleissner, co-founder of Toniic, the leading network for high net worth impact investors.

At the first dinner reception in Zurich’s old town, University of Zurich President Michael Schaepman set the conference in the context of the university’s broader sustainability goals and alluded to the characteristically Swiss approach to sustainable finance in this country: “we’re leading the field, but we don’t tell anyone.”

Photos: © Aspasia Daskalopoulou

As a part of GRASFI’s commitment to fostering high-quality scholarship on sustainable finance, this year’s gathering also featured a workshop during which Ph.D. students and early career academics could connect with established researchers in GRASFI’s network to discuss their plans and get career advice in a dedicated and supportive setting.

© Byung Jun Kim

Biodiversity: the living foundation of finance

While climate finance was well-covered by this year’s program, biodiversity also established itself as a central theme.

“For a long time,” said WWF Switzerland’s Head of Sustainable Finance Amandine Favier, “biodiversity and climate change were looked at as separate issues — trade-offs even — but they are completely interrelated.” Likewise, the importance of the SDGs Life on Land and Life below Water cannot be overstated. “Our whole economic system depends on nature,” Favier continued, “as I see it, GDP relies 100% on nature.”

Fortunately, some of the next steps are clear as well. Reporting from the practitioner side, Robert-Alexandre Poujade, Biodiversity Lead at BNP Paribas Asset Management said that–contrary to common belief–there is actually a wealth of data available and that financial institutions have a responsibility to engage with their clients and “talk with them about their expectations for nature.” When it comes to ways that research can contribute, Jessica Smith of the UN Environment Program Finance Initiative voiced the need for scenarios examining the links between local biodiversity factors like the loss of forest cover or over-exploitation of key species and their effects on both the real economy and the financial sector. “There are plenty of scenarios for climate,” Smith said, “but we need them for biodiversity at a level of granularity that empowers decision-making.”

Photo: © superpeng

Unlocking impact: the sustainable finance potential of private wealth

Another significant research opportunity discussed at the conference was that of individual investors, particularly those considered high and ultra-high net worth. “This segment makes up less than 1% of the global population, but it currently controls 50% of total wealth”, Falko Paetzold said in a Science Meets Practice session on the topic. “This represents a massive opportunity when it comes to financing transitions towards sustainability. By helping identify what works in these niches, research can have a huge impact.”

In the session, Charly Kleissner and Kristin Siegel of Toniic introduced a robust data set collected from their network’s community of (U)HNW impact investors and offered opportunities for further research.

Paetzold also announced the founding of the Impact Foundation, a fund and resource network dedicated to supporting exceptionally high impact research in this area. During the Awards Ceremony, the Foundation presented its inaugural award for Impactful Research to Adelina Barbalau and Federica Zeni for their paper on the ‘Optimal Design of Green Securities’.

Photos: © superpeng & © Byung Jun Kim

Highlighting outstanding scholarship: the GRASFI Awards

Of all the papers presented, five more were commended for their outstanding contributions at the conference’s closing event.

Bram van der Kroft and Dennis Bams were noted as Runner Ups for Best Ph.D. Paper for their research on inflated ESG ratings, as was Glen Gostlow for the paper ‘Pricing Physical Climate Risk in the Cross-Section of Returns’. The award itself went to Claudio Rizzi of the University of Miami whose work on natural capital and municipal bond yields shed new light on the value of natural areas in the face of increasingly frequent natural disasters.

Swiss Sustainable Finance awarded the Best Paper for Transparency for Stakeholders to ‘Which institutional investors drive corporate sustainability?’ by Marco Ceccarelli, Simon Glossner, Mikael Homanen and Daniel Schmidt and the Centre for Climate Finance & Investment at Imperial College Business School recognized Quyen Nguyen, Ivan Diaz-Rainey, Adam Kitto, Ben McNeil, Nic Pittman and Renzhu Zhang with the Best Paper for Climate Finance Research for their study of scope 3 emissions.

The best conference paper overall went to Julia Bingler, Mathias Kraus, Markus Leippold and Nicolas Webersinke for their research on ‘Cheap Talk in Corporate Climate Commitments’, which applied natural language processing techniques to evaluate 14,584 annual reports and analyze climate disclosures.

Julia Bingler receiving the Best Paper Award. Photo: © superpeng

Keeping up the good work: the next steps for sustainable finance research

With 2030 drawing ever nearer, it’s clear that there is still a long way to go.

“It’s an exciting and critical time for this industry,” Paetzold reflected, a pivotal moment at which “our help as the scientific community is really needed.”

“We know that academic research is key for the development of sustainable finance into an effective tool,” said Kelly Hess of Swiss Sustainable Finance (SSF) during the Award Ceremony, “but it’s our job as SSF and your job as researchers to help get this information out there into the wider world.” From helping provide clarity and assuage doubts to challenging the claims of the financial services industry, professionals in this field have their work cut out for them.

Photos: © superpeng

During the panel on real world impact, WWF Switzerland CEO Thomas Vellacott shared a reminder for our community: “I want to extend a big thank you to those working in this field. What you do is incredibly important for a rapid transition to sustainability, and for the everyday work of science-based organizations such as WWF.”

While those working in sustainability rarely forget what’s at stake and what we’re working towards, it can still help to get another perspective on the big picture.

“What you do really matters,” Vellacott emphasized, “please remember that.”

This year’s GRASFI conference was co-hosted by CSP and the Center of Competence for Sustainable Finance at the University of Zurich. More information on the Global Research Alliance for Sustainable Finance and Investment (GRASFI) can be found on their website, as well as on Linkedin and Twitter. An archive of live tweets from the conference is available here or by searching the hashtag #GRASFI22. Next year’s conference will take place in New Haven, Connecticut, hosted by GRASFI Member Yale University.

Watch highlights from GRASFI 2022 below and view the full photo gallery here.

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Center for Sustainable Finance and Private Wealth

CSP is a research center at UZH. We conduct research and train wealth owners & investment professionals in order to move capital towards sustainable growth.