At the IMPACT Lab, we study how various stakeholders (i.e., owners and managers of infrastructure assets, investors, and policymakers) should explicitly and systematically integrate sustainability issues into their decision-making processes, as well as how technology and policy can facilitate this transition. We are particularly interested in exploring these subjects in infrastructure (e.g., energy, transportation, and cities) assets because rapidly growing climate risks significantly affect their valuation.
We develop and apply a framework to create and capture material impacts from climate change and a low-carbon transition on infrastructure assets, investment portfolios, and financial systems. Three main research pillars of the Lab include (1) climate risk analysis, (2) sustainability integration, (3) digital innovation for sustainability.
Climate Risk Analysis
The lab specializes in assessing, projecting, and managing climate-related financial risks by conducting empirical analysis, scenario analysis, and stress testing. Our focus is on assessing the impacts of climate risks on the economic system, financial sector, energy system, and infrastructure assets, as well as exploring potential policy solutions.
Economic system: We conduct empirical analysis to evaluate the effects of climate risks on the financial condition and profitability of companies. We also assess industry-specific risks under climate scenarios, analyze industrial restructuring, and propose policy recommendations.
Financial sector: We analyze the impact of climate risk on financial instruments and investment assets. Our work includes evaluating the stability of assets, institutions, and financial markets under different climate scenarios, and proposing relevant policies.
Infrastructure assets: We assess the impact of climate risk on infrastructure systems and assets. We also analyze potential infrastructure value losses under climate scenarios and provide policy recommendations to mitigate these risks.
The lab focuses on exploring how sustainability and climate resilience can create economic, social, and environmental benefits. We develop innovative financial instruments, market structures, and policy support to enhance the market's capacity to mitigate and adapt to climate risks.
Public consensus: We provide evidence-based knowledge and relevant methodologies to support public consensus on sustainable transition and investments in them. Our work includes analyzing how such investments can translate into real-world financial performance.
Investment strategies: We identify environmental, social, and governance (ESG) factors that significantly affect investment performance. We propose ESG strategies that integrate these factors alongside traditional risk factors.
Policy supports: We research and propose institutional arrangements, such as assessments of ESG performance, ESG data, and disclosure schemes. These arrangements aim to provide effective financial incentives for sustainable integration and support policy development in this area.
The lab specializes in conducting data-driven research on the systematic assessment of low-carbon economy implementation. Our focus is on the national, city, enterprise, and infrastructure levels, as well as implementation strategies.
Sustainability measures: We develop reliable, comparable, and transparent indicators to assess the performance of low-carbon implementation at different levels. Our work includes proposing improvements to the sustainability disclosure system to enhance transparency and accountability.
Data-driven decision-making: We utilize advanced technologies to improve decision-making processes related to climate risk assessment, financial asset management, infrastructure development, and operation, as well as policy-making. This approach enables us to analyze and interpret large datasets effectively, providing insights that support informed decision-making.