Sustainable Finance: Research and Policy Activities

Climate change is one of the megatrends that society is confronted with. In 2019, the European Union (EU) declared in the European Green Deal to transition to a sustainable economy until 2050, bringing up new challenges for the financial system.
For financial markets, the consequences of climate change create new risks as well as a huge financing need to bear the costs of the transition toward a net-zero economy. At the same time, private investors’ interest in green and sustainable finance is rising. To make informed decisions from an economic and ecological perspective, it is important that information on environmental, social, and governance criteria (ESG) is available in a transparent and harmonized manner.
At SAFE, research looks into the impact on households, firms, and financial intermediaries and addresses issues like heterogenous ESG standards, regulatory loopholes, and greenwashing.
SAFE is part of the Frankfurt Panel on Sustainability Research and co-organized the First Sustainability Standards Watchers Conference in July 2022. Find out more about the conference.
Besides climate change, biodiversity loss is a global threat that cannot be resolved without the transformation of the economy with help from the financial sector. Therefore, in the context of the Fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD COP 15) in Montréal from 7 to 19 December 2022, SAFE's Founding Director emeritus Jan Krahnen signed and developed six demands and offers with an alliance of German science and research institutions to emphasize the importance of scientific advice and regulations in this field - the Frankfurt Declaration.
Highlight

On 29 November, an alliance of scientific and research organizations organized the conference Business needs Nature - Towards a nature-positive Economy prior to the UN CBD COP 15 in Montréal.
Publications
Author/s | Title | Program Area | Type | Published | Keywords |
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Raphael Abiry, Marien Ferdinandusse, Alexander Ludwig, Carolin Nerlich | Climate Change Mitigation: How Effective is Green Quantitative Easing? SAFE Working Paper No. 376 | Macro Finance | SAFE Working Paper | 2022 | |
Alperen Afşin Gözlügöl | The Clash of ‘E’ and ‘S’ of ESG: Just Transition on the Path to Net Zero and the Implications for Sustainable Corporate Governance and Finance Journal of World Energy Law & Business | Law and Finance | Published Paper | 2022 | climate change, sustainability, ESG, employees, workforce, net zero transition, corporate governance, institutional investors, green finance |
Roman Inderst, Marcus Opp | Socially Optimal Sustainability Standards with Non-Consequentialist ("Warm Glow") Investors SAFE Working Paper No. 346 | Financial Intermediation, Law and Finance, Household Finance | SAFE Working Paper | 2022 | Sustainability; ESG; green financing; labelling; |
Alperen Afşin Gözlügöl, Wolf-Georg Ringe | Private Companies: The Missing Link on The Path to Net Zero SAFE Working Paper No. 342 | Law and Finance | SAFE Working Paper | 2022 | private companies, net zero transition, sustainability disclosures, brown-spinning, climate change, private equity |
Kevin Bauer, Oliver Hinz, Johanna Jagow, Cristina Mihale-Wilson, Max Speicher, Moritz von Zahn | The Smart Green Nudge: Reducing Product Returns through Enriched Digital Footprints & Causal Machine Learning SAFE Working Paper No. 363 | Financial Intermediation, Experiment Center | SAFE Working Paper | 2022 | |
Roman Inderst, Stefan Thomas | Nachhaltigkeit und Wettbewerb: Zu einer Reform des Wettbewerbsrechts für die Erreichung von Nachhaltigkeitszielen Policy Letter No. 94 | Law and Finance | Policy Paper | 2022 | Nachhaltigkeit, ESG, Wettbewerbsrecht |
Monica Billio, Michele Costola, Iva Hristova, Carmelo Latino, Loriana Pelizzon | Sustainable Finance: A journey toward ESG and climate risk SAFE Working Paper No. 349 | Financial Markets | SAFE Working Paper | 2022 | Environmental, social, and governance factors (ESG); credit risk; debt cost; equity cost; sovereign bonds; portfolio management |
Jana Eisenkopf, Steffen Juranek, Uwe Walz | Responsible Investment and Stock Market Shocks: Short-Term Insurance and Persistent Outperformance Post-Crisis? SAFE Working Paper No. 329 | Financial Intermediation | SAFE Working Paper | 2021 | Responsible investment, ESG, stock market crisis, persistence |
Alperen Afşin Gözlügöl | The Clash of ‘E’ and ‘S’ of ESG: Just Transition on the Path to Net Zero and the Implications for Sustainable Corporate Governance and Finance SAFE Working Paper No. 325 | Law and Finance | SAFE Working Paper | 2021 | climate change, sustainability, ESG, employees, workforce, net zero transition, corporate governance, institutional investors, green finance |
Jan Pieter Krahnen, Jörg Rocholl, Marcel Thum | A primer on green finance: From wishful thinking to marginal impact White Paper No. 87 | Financial Markets | Policy Paper | 2021 | Green Finance, Climate Change, Sustainability, Taxonomy, ESG |
Sebastian Steuer, Tobias Tröger | The Role of Disclosure in Green Finance SAFE Working Paper No. 320 | Law and Finance | SAFE Working Paper | 2021 | |
Loriana Pelizzon, Aleksandra Rzeźnik, Kathleen Weiss Hanley | Investor Reliance on ESG Ratings and Stock Price Performance SAFE Working Paper No. 310 | Financial Markets | SAFE Working Paper | 2021 | Corporate Social Responsibility, ESG Rating Agencies, Sustainable Invest- ments, Socially responsible investing, ESG, Portfolio choice |
Christoph Hambel, Holger Kraft, Eduardo S. Schwartz | Optimal Carbon Abatement in a Stochastic Equilibrium Model with Climate Change European Economic Review | Macro Finance, Systemic Risk Lab | Published Paper | 2020 | |
Monica Billio, Michele Costola, Iva Hristova, Carmelo Latino, Loriana Pelizzon | Inside the ESG Ratings: (Dis)agreement and Performance SAFE Working Paper No. 284 | Financial Markets | SAFE Working Paper | 2020 |
Finance Blog
Ongoing Research Projects
Publication Count | ||||||
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Financial Markets | Green Auto Securitization (GAS) | Loriana Pelizzon, Max Riedel | 2022 | 138108 | 1 | |
Household Finance | Transition Labels in Climate Finance: Perception and Use by Private Investors | Christine Laudenbach | 2022 | 148104 | 1 | |
Financial Markets | Mainstreaming Transparent Assessment of Energy Efficiency in ESG Ratings (TranspArEEnS) | Luca Bertalot, Monica Billio, Stefano Colonnello, Michele Costola, Aoife Fitzpatrick, Carmelo Latino, Konrad Lucke, Loriana Pelizzon | 2021 | 138106 | 1 |