Sustainable finance seeks to increase the contribution of finance to sustainable and inclusive growth. In particular, it aims to support economic growth while reduces pressures on the environment, addresses greenhouse gas emissions and tackling pollution, and improves efficiency in the use of natural resources. Moreover, sustainable finance aspires to strengthen financial stability and asset pricing by improving the assessment and management of long-term material risks and intangible drivers of value creation – including those related to environmental, social and governance (ESG) factors.
The workshop aims to provide a forum for debate among researchers and policymakers from around the world on recent developments in various aspects of sustainable finance. Topics of special interest, although not limited to the ones below, are:
(1) the role of banks: potential topics include the appropriateness of the capital framework for project finance and specialized lending, possibility of a ‘green adjustment’ for minimum capital requirements (e.g., lower capital requirements for green bonds and green loans), reinforcement of Pillars II and III of prudential regulation with regard to sustainability, effect of ethics and/or governance on banks’ financial performance, etc.;
(2) the role of insurance companies and pension funds: consideration of adjusting Solvency II to enable greater investment by insurance companies in sustainable equity and long-term assets could be explored;
(3) the role of asset managers: as asset managers are uniquely placed to help capital flow towards more sustainable investments, potential research questions may include how asset managers could integrate ESG factors into their strategy;
(4) the role of credit rating agencies and stock exchanges: long-term sustainability risks and opportunities should move from an ‘add-on’ consideration to a ‘built-in’ feature in ratings. Additionally, much more can be done to promote sustainability by stock exchanges, e.g., they could support the growth of the green bond market by encouraging the development and application of robust standards;
(5) the role of supervisors: include aspects such as the development of a classification system for sustainable assets; the establishment of a standard and label for green bonds and other sustainable assets, the reinforcement of ESG reporting requirements, the enhancing of the role of the supervisors in assessing ESG-related risks, etc.