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Climate innovations in the financial sector

Pollak, Aurélie LU (2020) EKHS34 20201
Department of Economic History
Abstract
A green transition requires to drive public and private capital towards investments in line with environmental norms. Scholars are constantly looking into the performances of sustainable finance and how to measure them. Yet, the perspective from financial firms on climate finance has hardly been studied. This research addresses this gap by offering a qualitative analysis of Swedish financial firms’ incorporation of climate-related risks (CRR) into their financial analysis. The study consists of the interview of eight representatives of Swedish asset management firms and institutional investors. After describing how firms consider CRR, an analysis of the position of the firms in regards to the green transition is presented based on an... (More)
A green transition requires to drive public and private capital towards investments in line with environmental norms. Scholars are constantly looking into the performances of sustainable finance and how to measure them. Yet, the perspective from financial firms on climate finance has hardly been studied. This research addresses this gap by offering a qualitative analysis of Swedish financial firms’ incorporation of climate-related risks (CRR) into their financial analysis. The study consists of the interview of eight representatives of Swedish asset management firms and institutional investors. After describing how firms consider CRR, an analysis of the position of the firms in regards to the green transition is presented based on an adapted version of the three domains from Grubb, Hourcade, and Neuhoff (2014). Their framework is useful to understand decisions according to behavioral, neoclassical, and evolutionary theories. We found that the consideration for risks is shifting towards long-term perspectives with transition risks deemed more important than physical risks. The participants in our study showed signs of entering the transition, led by governmental investors and relying on international instruments to provide information and models. They mostly consider that CRR have not materialized yet and thus favor engagement strategies over divestments. (Less)
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author
Pollak, Aurélie LU
supervisor
organization
alternative title
The incorporation of climate-related risks into the financial analysis of Swedish institutional investors and asset managers
course
EKHS34 20201
year
type
H1 - Master's Degree (One Year)
subject
keywords
Climate-related risks, Sweden, Financial risks, Financial innovation, Evolutionary theory
language
English
id
9030107
date added to LUP
2021-06-24 13:10:34
date last changed
2021-06-24 13:10:34
@misc{9030107,
  abstract     = {{A green transition requires to drive public and private capital towards investments in line with environmental norms. Scholars are constantly looking into the performances of sustainable finance and how to measure them. Yet, the perspective from financial firms on climate finance has hardly been studied. This research addresses this gap by offering a qualitative analysis of Swedish financial firms’ incorporation of climate-related risks (CRR) into their financial analysis. The study consists of the interview of eight representatives of Swedish asset management firms and institutional investors. After describing how firms consider CRR, an analysis of the position of the firms in regards to the green transition is presented based on an adapted version of the three domains from Grubb, Hourcade, and Neuhoff (2014). Their framework is useful to understand decisions according to behavioral, neoclassical, and evolutionary theories. We found that the consideration for risks is shifting towards long-term perspectives with transition risks deemed more important than physical risks. The participants in our study showed signs of entering the transition, led by governmental investors and relying on international instruments to provide information and models. They mostly consider that CRR have not materialized yet and thus favor engagement strategies over divestments.}},
  author       = {{Pollak, Aurélie}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Climate innovations in the financial sector}},
  year         = {{2020}},
}