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.

Our researchers Loriana Pelizzon and Max Riedel presented their project “Green Auto Securitisation” at the kick-off-event for the research project “Sustainable Finance and Climate Protection”, supported by the German Federal Ministry of Education and Research. Their project aims to develop a framework for a green financing mechanism to encourage the automotive industry, stakeholders, and consumers to support the financing of low-emission vehicles through bank loans.

The cooperative project “ClimLabels” by the Universities Bochum and Münster, the think tank Climate & Company, and SAFE was also featured at the conference. This project aims to improve the availability of climate-related information regarding investment decisions and is divided into four sub-projects, one being coordinated by Christine Laudenbach. More information on the projects here.