Fin4Green - Finance for a Sustainable, Green and Resilient Society  
Quantitative approaches for a robust assessment and management of risks related to sustainable investing

The Project

Sustainable finance is witnessing unprecedented growth in the sheer value of assets and instruments that account for Environmental, Social and Governance (ESG) factors under various labelling schemes. Unprecedented regulatory developments have also unfolded in Europe (e.g., the introduction of the EU Taxonomy of sustainable activities) and correspondingly, a number of initiatives by financial supervisors have emerged at the global level.
In contrast, the gap between sustainability objectives and capital investment allocation has been widening with the media’s attention mostly directed to climate mitigation (IPCC 2018). The success of the sustainability transition requires a proactive engagement of the business sector, the financial industry and the regulatory and supervising authorities. It requires that these actors are able to assess the financial risks arising from failing the sustainability transition or not being prepared to it. Financial supervisors acknowledge that climate change raise new risks that need to be addressed and are specifically concerned with the risks associated to the sustainability transition. At the same time, the conditions for taming moral hazard and greenwashing need to be in place.

Measuring and managing risks related to the sustainability transition is a key scientific challenge with enormous societal impact since it is a precondition to our ability to build a more sustainable and resilient society. Fin4Green addresses this challenge by developing quantitative approaches, both in an econometric and finance perspectives, for a robust assessment and management of financial risks related to sustainability.
Important knowledge gaps remain on whether and how sustainability risk is reflected in market prices, and financial instruments valuation. Sustainability risks are characterised by uncertainty and/or ambiguity (challenges to precisely projecting probabilities and to reconciling market participants’ expectations) and complexity (non-linear interactions among system components and sources of risk). Fin4Green aims to fill in these gaps with new quantitative methods to assess financial risk coherently with available forward-looking scientific knowledge (e.g., on climate policy scenarios).
Further, Fin4Green aims to deliver actionable knowledge that can inform the design of policies to support the sustainability transition. This will allow to enable the pivotal role of the private finance sector towards a Sustainable, Green and Resilient Society, and to preserve the financial stability.
Overall, Fin4Green will develop ground-breaking research, developing novel econometric and multidimensional quantitative approaches that will include the complexity dimension, along with the uncertainty and ambiguity features.

The Consortium

Ca’ Foscari University of Venice is a public University with a national and international outstanding reputation for academic excellence in both teaching and research. The Department of Economics develops knowledge and understanding of economic phenomena dealing with the complexity of global market scenarios and exploring related social, juridical, ethical and environmental implications.

A new research Center in Economic and Risk Analytics for Public Policies (VERA Center) has been created and it focuses on big data applied to social welfare and wellbeing, risk analytics and evaluation of public policies. The Department is involved in several European projects in the field of sustainable finance, Energy Efficiency and ESG criteria: EIBURS-ESG-Credit.eu, EeMMIP- Energy efficient Mortgage Market Implementation Plan; EeDaPP - Energy efficiency Data Protocol and Portal; EeMAP - Energy efficiency Mortgages Action Plan.

Bocconi University was established in Milan in 1902, with a generous endowment from Ferdinando Bocconi, a wealthy merchant. Named for his lost son, Università Commerciale Luigi Bocconi thus became the first Italian institution of higher education to grant a degree in economics. Today, Bocconi is a research university of international standing in business, economics, and law. Its research projects are funded by national and supranational institutions. By virtue of being a major node in the European and global network of business and economics universities, Bocconi exchanges faculty and cooperates on large projects with like-minded European and American universities and business schools.

Bocconi has close relations with major corporations and international agencies, as well as their managers and officials, and constantly interacts with the business and economic environment to assess new issues, implement new techniques, and start new research endeavors. 

Alma Mater Studiorum - Università di Bologna is the oldest university in the western world and is the best public university in Italy.
The Department of Economics is among the largest in Europe and it offers excellent research and teaching. Established in 1983 through the union of two pre-existing institutes, it has become a reference point for scientific debate in economics, and it currently hosts a lively community of international researchers and students.

Research at the Department of Economics covers 16 different fields, with high quality standards, and helps to understand and address fundamental problems such as poverty, inequality, development, employment, climate and technological change, immigration, health and many others.

The Department of Economics and Management was born in 2012 from the merger of the University of Pavia’s Department of Political Economy & Quantitative Methods and the Department of Business Research. The aim is the promotion, through research, teaching, and public engagement, of studies in the fields of economic, business, legal and social sciences. The Department aims to promote internationalization and collaboration with national and international universities and research centers.

People

Principal Investigator

Monica Billio

Monica Billio, Full Professor of Econometrics, Department of Economics, Ca' Foscari University of Venice

Associated Investigators

Roberto Casarin

Roberto Casarin, Full Professor of Econometrics, Department of Economics, Ca' Foscari University of Venice

Giuseppe Cavaliere

Giuseppe Cavaliere, Full Professor of Econometrics, Department of Economics, University of Bologna

Luca Fanelli

Luca Fanelli, Full Professor of Econometrics, Department of Economics, University of Bologna

Paolo Giudici

Paolo Giudici, Full Professor of Statistics, Department of Economics and Management, University of Pavia

Massimo Guidolin

Massimo Guidolin, Full Professor of Econometrics, Department of Finance, Bocconi University

Researchers

Michele Costola

Michele Costola, Research Fellow in Economic Policy, Department of Economics, Ca' Foscari University of Venice

Alexander Simon Mayer

Alexander Simon Mayer, Research Fellow in Econometrics,  Department of Economics, Ca' Foscari University of Venice

Publications

Last update: 21/05/2024