SUSTAINABILITY INTEGRATION AND ITS IMPACT
As the challenges of global climate change are deeply embedded in the fabric of our economic system, their solution needs to be more integrated so as to engage with a broad range of stakeholders-investors and business leaders in particular. Despite the growing market interest in environmental, social and governance (ESG) integration, there still remains a widespread perception among private investors that explicitly managing environmental risks will likely reduce investment returns. Even within the academic community, there have been inconclusive debates in the literature on whether firm's environmental performance is compatible with financial outcomes.
My research on “Risk and Return Opportunities of ESG Integration” seeks to clarify the return-risk relationship of low-carbon investing (i.e. whether ESG integration can lower risks and/or generate returns), and to understand how firm's environmental performance and its improvement are perceived in global financial markets. Combining environmental engineering, financial economics and advanced data technologies, this research investigates whether and how much integrating environmental factors can provide extra risk-adjusted returns in addition to doing so with traditional financial factors.
In my latest study, I have demonstrated that there is positive and statistically significant risk-adjusted return opportunities from low-carbon investing in the US market. As I am expanding my analysis on global scale, I expect to advance our understanding of ESG integration and investing from geological, economic and social science perspectives.
In, S.Y., Eccles, R. G., & Lee, Y. J. (2020). Looking Bank, Looking Forward: Scientometric Analysis on 47 Years of Sustainability Research. Available at SSRN 3693254
In, S. Y., Weyant, J. P., & Manav, B. (2020). Pricing Climate-Related Risks of Energy Investments. Available at SSRN 3736415
In, S. Y., Weyant, J. P., Manav, B., Venereau, C., & Rodriguez, L. E. (2020). Pricing Climate-Related Risks of Energy Investments: Three Energy Assets.
In, S.Y., Park, K.Y., & Monk, A. (2019). Is 'Being Green' Rewarded in the Market? An Empirical Investigation of Decarbonization Risk and Stock Returns. Available at SSRN 3020304 (This research won research awards from UNEP FI and the US DOE)
In, S.Y., & Park, K.Y. (2020). “Economics of Climate Change. Available at SSRN 3704761
In, S.Y., and Park, K.Y. (2020). Climate Stress Testing and Financial Stability. (sponsored research with the Bank of Korea)
Moudrak, N., Bakos, K., Eyquem, J., O’Reilly, H., Monk, A., & In, S. Y. (2020). Institutional Investors Find Alpha in Climate Risk Matrices: Global Survey Finds. Intact Centre on Climate Adaptation, Global Risk Institute and Stanford Global Project Center.
Project in Progress:
In, S.Y., Peterman, A., & A. Seiger. Roles of Corporate Capital in Driving Clean Energy Impact: Case Study on Google Renewable Energy Fund. (sponsored research by Google)
In, S.Y., & Schumacher, K. Carbonwashing: A New Type of ESG Greenwashing in a Post-Paris Climate
In, S.Y., Rogers, J., Monk, A., & Rook, D. The Value of Long-Term Investing: Portfolio Resilience and Corporate Innovation Introduction (in collaboration with Long-Term Stock Exchange [LTSE])
In, S.Y., & Weyant, J. Pricing Climate Resilience of Infrastructure Portfolio: Case Study on ENGIE (in collaboration with Stanford CIFE and ENGIE)
In, S.Y., I. Monasterolo, & Marco Roberto Assessing Risks and Opportunities of Energy Investment Portfolios under Climate-Aligned Policy Scenarios..)
In, S.Y., & Yoon, A. Practitioners’ Guide to Sustainable Investing.