The Initiative in Sustainable Finance at the Department of Banking and Finance of the University of Zurich is the biggest cluster of academic excellence in sustainable finance in Switzerland.
We combine cutting-edge methods, data, themes, and technology to provide the key insights and tools for a sustainable future. Our work plays a pivotal role in demonstrating how finance can drive positive environmental and social change.
Banks, insurance companies, or pension funds play a crucial role in financing the green transformation. Large amounts of financial capital will need to be reallocated to achieve more sustainable business models. This focus area explores the role of financial institutions in identifying, measuring, and managing sustainability risks. It identifies how capital providers can take up a positive role, for example, in fighting climate change.
We address questions like: What is the impact of natural disasters on credit provision? What is the effect of green loans on a firm’s social and governance performance? How do banks react to an increase in pro-climate regulations?
Artificial Intelligence (AI) has become a key tool in sustainable finance. Natural Language Processing (NLP) offers an AI tool that allows us to access and understand large amounts of data. This focus area uses NLP tools to develop innovative metrics of sustainability risks or fact-checks green commitments of companies against their actual environmental impact.
For example, the Cheap Talk Index evaluates the true value of proposed net-zero commitments. Other NLP tools translate complex sustainability reports into simple language so that even kids can understand the main message. We aim to provide a public tool to assess what companies are doing to protect our people and planet.
Private wealth holders control most assets globally and can play an outsized role in creating change through their activities and investing. This focus area examines the opportunities and challenges wealth owners, and their families face when investing sustainably.
Relevant questions include: Which sustainable investing themes do (ultra) high net worth individuals care about most? To what extent are these private investors willing to pay for impact? Which incentives would enable wealth holders to deploy more of their capital sustainably?
Climate change and biodiversity conservation are two of the most challenging and pressing issues our planet is facing. Financial markets can enable accelerated action to mitigate climate and biodiversity risks. This focus area investigates how financial markets can measure, price, and hedge these risks and how to identify investment opportunities.
We ask questions like how can investors and other financial market actors protect biodiversity and the climate? Do investors only care about these topics once big natural disasters threaten economic performances? What is the role of rating agencies and regulators in enabling investors to incorporate environmental, social and governance (ESG) criteria?