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Cash greens everything around me? Identifying key barriers and drivers for advancing low-carbon investments in Denmark’s finance industry and evaluating the transition efforts of the industry

Larsen, Rasmus Bjerring LU (2019) In Master Thesis Series in Environmental Studies and Sustainability Science MESM02 20191
LUCSUS (Lund University Centre for Sustainability Studies)
Abstract
Meeting international climate goals require a major reallocation of global investment portfolios. However, in 2016, 74%. of all assets under management were still socially and environmentally unchecked. Research has started to address how finance can support the low-carbon transition, but little is known about how the financial sector itself perceives this transition. This thesis seeks to 1) identify key barriers and drivers for advancing low-carbon investments (LCI) in Denmark’s finance industry and 2) evaluate the industry’s LCI-integration until now. The thesis takes a mixed methods approach through surveys (n=11) and interviews (n=12) with finance professionals in Danish pension funds and financial intermediaries. Key LCI-drivers are... (More)
Meeting international climate goals require a major reallocation of global investment portfolios. However, in 2016, 74%. of all assets under management were still socially and environmentally unchecked. Research has started to address how finance can support the low-carbon transition, but little is known about how the financial sector itself perceives this transition. This thesis seeks to 1) identify key barriers and drivers for advancing low-carbon investments (LCI) in Denmark’s finance industry and 2) evaluate the industry’s LCI-integration until now. The thesis takes a mixed methods approach through surveys (n=11) and interviews (n=12) with finance professionals in Danish pension funds and financial intermediaries. Key LCI-drivers are identified as a) the risk/return profile of LCI, b) costumer/pension fund members’ preferences c) top-management, d) increased public awareness of climate change the role of institutional investors, e) expected future climate and energy policy and f) stranding risks for coal and oil sands. Key LCI-barriers are identified as a) a low LCI-supply, b) a lack of current and uncertainty of future climate and energy policy, c) low stranding risks for oil and especially gas and d) conservative organisational cultures. It is found that LCI-integration has progressed rapidly and that it is impacting investment decisions. Yet, it is restrained by a dominating logic of return-maximisation, which is grounded in prevailing organisational cultures and unlikely to change. Although it is still possible to integrate LCI further under current conditions, it will be necessary to compromise slightly on returns, if finance is to take a truly progressive role on climate change. The findings are relevant to anyone who wants to see finance take further steps towards sustainability and can be used to make work on sustainable finance more strategic. (Less)
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author
Larsen, Rasmus Bjerring LU
supervisor
organization
course
MESM02 20191
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Sustainability Science, Sustainable Finance, Climate Investing, Institutional Investors, Corporate Organisational Change.
publication/series
Master Thesis Series in Environmental Studies and Sustainability Science
report number
2019:039
language
English
id
8982587
date added to LUP
2019-06-13 11:54:59
date last changed
2019-06-13 11:54:59
@misc{8982587,
  abstract     = {Meeting international climate goals require a major reallocation of global investment portfolios. However, in 2016, 74%. of all assets under management were still socially and environmentally unchecked. Research has started to address how finance can support the low-carbon transition, but little is known about how the financial sector itself perceives this transition. This thesis seeks to 1) identify key barriers and drivers for advancing low-carbon investments (LCI) in Denmark’s finance industry and 2) evaluate the industry’s LCI-integration until now. The thesis takes a mixed methods approach through surveys (n=11) and interviews (n=12) with finance professionals in Danish pension funds and financial intermediaries. Key LCI-drivers are identified as a) the risk/return profile of LCI, b) costumer/pension fund members’ preferences c) top-management, d) increased public awareness of climate change the role of institutional investors, e) expected future climate and energy policy and f) stranding risks for coal and oil sands. Key LCI-barriers are identified as a) a low LCI-supply, b) a lack of current and uncertainty of future climate and energy policy, c) low stranding risks for oil and especially gas and d) conservative organisational cultures. It is found that LCI-integration has progressed rapidly and that it is impacting investment decisions. Yet, it is restrained by a dominating logic of return-maximisation, which is grounded in prevailing organisational cultures and unlikely to change. Although it is still possible to integrate LCI further under current conditions, it will be necessary to compromise slightly on returns, if finance is to take a truly progressive role on climate change. The findings are relevant to anyone who wants to see finance take further steps towards sustainability and can be used to make work on sustainable finance more strategic.},
  author       = {Larsen, Rasmus Bjerring},
  keyword      = {Sustainability Science,Sustainable Finance,Climate Investing,Institutional Investors,Corporate Organisational Change.},
  language     = {eng},
  note         = {Student Paper},
  series       = {Master Thesis Series in Environmental Studies and Sustainability Science},
  title        = {Cash greens everything around me? Identifying key barriers and drivers for advancing low-carbon investments in Denmark’s finance industry and evaluating the transition efforts of the industry},
  year         = {2019},
}