Adapting the financial system is one of the main challenges posed by the transition to a low-carbon economy. As the GIEC underscored in its sixth report, investments in the ecological transition are insufficient and available funds are often misallocated.
Previous research has pointed to the lack of long-term investors and the need for new products and strategies from both private actors and public authorities – not only to align financial flows with the objectives of the ecological transition, but also to face the new financial risks linked to climate change.
How can monetary and prudential policies contribute to the reorientation of financial flows towards the objectives of a low-carbon economy? How can they be linked to one another and to fiscal policy?
This axis deals with four core research topics:
Jeanne Amar (University Nice Côte d’Azur, Gredeg), Cécile Cézanne (University Nice Côte d’Azur, Gredeg), Hugues Chenet (IESEG School of Management, Lille University), Samira Demaria (University Nice Côte d’Azur, Gredeg), Ivar Ekeland (University Paris-Dauphine), Gaëtan Le Quang (University Lumière Lyon 2) Jean-Stéphane Mésonnier (Bank of France), Laurence Scialom (University Paris Ouest).
Climate transparency through firms' disclosures is often considered a prerequisite for the redirection of investments toward low-carbon economy. In order to provide effective incentives to improve this transparency, it is therefore crucial to identify its drivers.
Our analysis of the Climate Risks and Opportunities Index (CRORI) and the CDP climate score reveal a parallel improvement of these indices with different sectoral disparities over the 2015–2019 period. While our results are encouraging, they need to be put into perspective because these firms are still far from being carbon neutral.
We examine in this paper sustainability-linked bonds (SLBs) whose issuance now totals more than USD 200 bn. There is a structural design flaw in the SLB mechanism: setting a significant coupon step-up does not suit the issuer’s nor the investors’ interests, considering conditionality. This creates a no win situation for the issuer and investors alike and explains the “benign”...
We address the long-standing challenge of adding optimal exploration to the classic Hotelling model of a non-renewable resource. We prove that a frontier of critical levels of proven reserves exists, above which exploration ceases, and below which it proceeds at infinite speed.
In its 2021 strategy review, the European Central Bank's Governing Council unanimously decided to make climate change one of its priorities for the coming years. In this article, we try to understand how this change was achieved.
Corporate disclosures related to climate risks are one of the ways to fight climate change by improving financial transparency for investors. An initial assessment, five years after the COP 21, of the climate disclosure practices of French companies (CAC 40) 2015-2019 will be presented. While the results are encouraging, they need to be put into...
In this paper, we examine how central banks and financial supervisors are approaching the topic of BRFR in relation to climate-related financial risk. We argue that policymakers should focus upon the broader concept of systemic environmental-financial risks to account for the interactions and trade-offs between both domains of biodiversity and climate change.
Central bank independence (CBI) has often been presented as a superior institutional arrangement demonstrated by economists in the 1980s for achieving a common good in a non-partisan manner. In this article, we argue that this view must be challenged.
Based on the 2018 Intergovernmental Panel on Climate Change scenarios, this article studies the credit risk sensitivity of 795 international companies to carbon prices.
Using the IPCC (2018) medium (2024) and long-term (2060) scenarios, this study analyzes the credit risk sensitivity of 763 international companies.
In this article, we build on four methods to show that Art. 2.1(c) of the Paris Agreement comprises a new meaning of ‘finance’ under the United Nations negotiations. Implementation of Art. 2.1(c) requires engagement by governments and non-state actors, including the financial sector.
In this article, we seek to decipher the forces at work in the deconstruction of the myth of a central bank solely dedicated to preserving the value of money and disconnected from major societal issues and debates. We develop the idea that since the financial crisis, central banks have been re-engaging their politics in...
This article demonstrates that the green bond cannot constitute an incentive to carry out a green project.
We propose an exploratory and theoretical study which introduces how and why a particular and innovative ecological accounting approach, the CARE model, currently called upon by a growing number of practitioners and researchers, is a relevant framework to re-conceptualise the issue of climate finance
Using textual analysis methods, we study how the topic of climate change has appeared and evolved in the speeches of the ECB's Executive Board members since 1997.
This article studies how institutional dynamics might affect and be affected by the implementation of climate-related financial policies.
This article point out why current banking regulation is not adequate to face risks whose origin is grounded outside financial markets and offer avenues for reforming macroprudential regulation.
L'objectif de cet article est de faire un état des lieux des travaux sur la finance durable à travers une analyse bibliométrique de la base de données WoS entre 1981 et 2018.
We assess the impact of environmental externalities on portfolio decisions in a lab-inthe-field experiment on finance professionals and students. Subjects show pro-environmental preferences, with...
Finance is vital for the green energy transition, but access to low cost finance is uneven as the cost of capital differs substantially between regions. This study shows how modelled decarbonisation pathways for developing economies are disproportionately impacted by different weighted average cost of capital (WACC) assumptions.
This paper tries to fill this gap of research on the significance and evolution of renewable energy crowdfunding by providing a bibliometric analysis of academic work on renewable energy crowdfunding.
The article presents a ‘precautionary’ financial policy approach to deal with Climate-related financial risks instead of the current framework which largely focuses on market-based solutions
We investigate the real effects of mandatory climate-related disclosure by financial institutions on the funding of carbon-intensive industries.
The focus of this thesis is the French renewable energy crowdfunding sector because it has experienced a strong growth in the context of a favorable regulatory environment. I conduct a case study of a French crowdfunding platform specialized in renewable energy projects to better understand its business model and the risks associated with it.
This article aims to analyse the compliance of CAC 40 firms with the recommendations of the Task Force on Climate‐related Financial Disclosures.
This article conducts a bibliometric analysis of the academic publications on the financing of renewable energies referenced in Web of Science up to June 2018. Our analysis reveals 11 main clusters. We highlight the fact that a majority of the sample focuses on market-based policy instruments used to support renewable energy development.
This article examines the role of sustainable finance and investment in Japan and how the Japanese financial sector can mitigate growing climate risks and support Japan's transition towards a zero-carbon, sustainable economy.
Article published in Industrial Relations (Avril 2020) This article examines the relationship between corporate governance and corporate sustainability by focusing on an essential component...
This paper aims to review the growing, though limited, body of literature that has emerged in the late 2000s to study the quantitative determinants of RE development at a country level.
Article published in Climatic Change (2019) The finance sector’s response to pressures around climate change has emphasized disclosure, notably through the recommendations of the...
Based on content analysis of firms’ reference documents over 2015-2017, this article examines CAC 40 firms’ compliance with the recommendations of TCFD by building a new index to measure the disclosure of environmental information.
This paper is an introduction to climate change risk for the financial sector (banks and investors). It aims to provide financial professionals, researchers and policymakers in the area of banking and investment with a snapshot of the current state of the art and guidance on the relevant literature to go further.
This paper studies whether and how a country's environmental, social, and governance (ESG) performance relates to its sovereign borrowing costs in international capital markets.
This paper analyzes the potential benefit of using subsidies conditional on success or failure of an R&D program, rather than a flat subsidy.
In their response, experts associated with the Chair emphasize the predominance of accounting standards over non-financial information to guide corporate strategies. Accounting is not neutral, and the fact that it does not integrate human and natural capital is a major obstacle to achieving the EU's sustainability objectives.
The aim of this paper is to explain why there is insufficient long-term capital investment despite the abundant savings collected by a booming financial sector. Special attention is given to understanding the role of today’s accounting and prudential requirements.
The paper shows that International Financial Reporting Standards (IFRS) can affect long-term asset allocation of banks and insurance companies. International accounting standards do not differentiate between low and carbon intensive investment and do not take into account climate risks beforehand.
This paper examines the relationships between corporate governance and corporate sustainability by focusing on two main components of companies’ governance structure: boards of directors and investor relations officers.
This article seeks to investigate whether the fair value accounting may have short-termist bias on the financing of long-term investment.
Article published in Environmental and Resource Economics – September 2017 Abstract. We consider a partial equilibrium model to study the optimal phasing out of...
Download all the material that has been produced during the Symposium for the High Level commission on Carbon prices (17 May 2017).
The article examines whether the extra-financial performance of countries on environmental, social and governance (ESG) factors matters for sovereign bonds markets. Using a panel regression model over a data set with 23 OECD countries from 2007 to 2012, it shows that ESG ratings significantly decrease government bond spreads.
Impact investments are emerging as a new asset class of social finance, sometimes driven by multinational enterprises as part of their strategic corporate social...
Impact investments are emerging as a new asset class of social finance. The article is based on on a three year action-research program conducted with Schneider Electric. It analyzes the perceptions of the Schneider Electric impact investing fund’s managers’ regarding emerging societal performance management procedures they were urged to adopt.
Comme l’a rappelé le GIEC dans son rapport d’avril 2022, les flux financiers sont très éloignés de la trajectoire qui conduirait aux objectifs d’une économie bas-carbone. Face à la « double matérialité » du risque écologique pour le secteur financier, le cadre prudentiel actuel présente des limites.
France Stratégie and the Chair Energy et Prosperity are teaming up to organize a workshop on the contribution of the financial system to the energy transition and climate stabilization. The
The Chair Energy and Prosperity is partner of the International Symposium on Money, Banking and Finance, annual meeting of the European Research Group on Money Banking and Finance.
Quand la finance s’intéresse aux risques financiers posés par le réchauffement climatique En septembre 2015, Mark Carney, gouverneur de la Banque d’Angleterre et Président...
Dans le cadre de son semestre thématique consacré au financement de la transition énergétique, la Chaire énergie et prospérité a organisé une seconde session...
The cattle sector, both emissions- and land-intensive, represents a great opportunity for mitigation through reforestation. In this paper, we study the efficiency of land-use regulation. Our analytical results indicate that the subsidy is the best alternative policy to emissions tax, provided that the elasticities of land use and emissions to cattle feeding are close. Interestingly,...
The workshop aims to identify the key uncertainties and debates regarding the role of bioenergy in a climate neutral economy, at national and global scales, and the challenges for the design of climate policies. Speakers and precise time will be confirmed soon.