Researchers from UvA Economics and Business are conducting fundamental research on sustainable investment and insurance in order to provide solutions for challenges faced by insurers, other financial institutions, regulators, and society.

Importance of quantifying ESG risk

Society is currently facing major challenges, including the loss of biodiversity, ecosystem collapses and climate change. In the long run, these challenges can represent huge environmental, and indirectly, financial costs worldwide. Environmental, social, and corporate governance (ESG) is a framework that helps stakeholders understand how an organization is managing risks and opportunities related to environmental (e.g., climate change, biodiversity loss, energy efficiency); social (e.g., equity, diversity, inclusion), and governance criteria (e.g., preventing corruption).

In view of the transition to a sustainable future, the EU the Dutch government and regulatory institutions intend to impose increasing ESG investment requirements on insurance companies and financial institutions in general. As a result of these requirements, accurate evaluation of corporate sustainability reporting and advertising is becoming increasingly important for assessing the associated risks.

Corporations recognize the importance of ESG for future business success. Investors, too, are paying attention to ESG factors. Incorporating these factors into investment decisions will help them to provide higher risk-adjusted returns over a market cycle. The project’s results will be used by financial institutions, policymakers working for regulators or the government, and other stakeholders who wish to quantify ESG risk and assess the impact of ESG investment.

Research projects at the Research Centre for Sustainable Investments and Insurance

The centre’s research projects currently focus on ESG risk in relation to real estate, mortgages, insurance and financial portfolios; investments; and sustainability. The research is carried out by PhD students and postdoctoral researchers together with junior and senior staff members at the centre.