How can financial markets facilitate the transformation towards a sustainable and climate-friendly society?Final Report of the Working Group "Sustainable Finance" at CSS

28 October 2021, by CSS

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In July 2019, the Center for Sustainable Society Research (CSS) approved the establishment of the Working Group "Sustainable Finance".

Activities of the Working Group

In 2019, two lectures by international scientists were made possible within the framework of the Working Group: Prof. Jeong Bon Kim (City University of Hong Kong) and Prof. Chris van Staden (Auckland University of Technology). The lectures and the discussions with the scientists contributed to the exchange within the Working Group. In further discussions with the researchers, cooperative research projects were initiated.

The members of the Working Group are involved in the "Sustainable Finance Research Platform", an association of scientists from several German universities and research institutions. Within the framework of the Research Platform, a funding application was submitted to the Mercator Foundation and approved in July 2020 (funding: 4,000,000 €). Within the framework of the Sustainable Finance Research Platform, the members of the Working Group have been involved in the political discussions on the topic of sustainable finance through the collaboration and preparation of policy briefs and the implementation of and participation in workshops. Working Group member Kerstin Lopatta was appointed to the management board of the Research Platform.

The members of the Working Group are also represented in the EFRAG Lab Project Task Force for Sustainability Reporting Standards, the G7 Impact Task Force and the Sustainable Finance Advisory Board (Alexander Bassen), the VfU Science Advisory Board and the Steering Committee of the Science Platform on Climate Protection (Timo Busch), the Global Research Alliance for Sustainable Finance and Investment (GRASFI) (Kerstin Lopatta) and the ad hoc group "Sustainable Finance" of the DIHK (Frank Schiemann). Due to the wide spectrum of contacts and memberships in scientific, political and practice-oriented bodies, the members of the Working Group not only have insights into current developments in the field of sustainable finance, but also actively participate in these developments, bringing a scientifically sound perspective to socio-political developments.

The strong development of the Working Group is ultimately also reflected in the publications in scientific journals, such as Business, Strategy and the Environment, Energy Policy, European Accounting Review, Journal of Business Ethics, Journal of Cleaner Production, Journal of Industrial Ecology, Organization & Environment, and The International Journal of Accounting.

What turned out to be particularly exciting developments?

The Working Group's objectives have become increasingly relevant in the course of the last few years. For example, a proposal for a new EU "Corporate Sustainability Reporting Directive" was published in 2021, which represents a significant further development of Directive 2014/95/EU. Alexander Bassen is involved in the necessary development of concrete reporting standards through his membership in the EFRAG Lab Project Task Force for Sustainability Reporting Standards. The Sustainable Finance Advisory Board (with the participation of researchers from the Working Group) has also published its recommendations on the German government's sustainable finance strategy. In the context of this publication, a series of workshops was organised via the Sustainable Finance Research Platform, in which the members of the Working Group were involved. In addition, the EU published a new Sustainable Finance Strategy in 2021, which was critically appraised in a policy brief by the Research Platform.

The social and political interest in the topic thus continues to grow and also leads to regulatory measures at national, EU and international level. On the one hand, this offers the opportunity to bring in the scientific perspective to objectify the discussions and to find solutions. On the other hand, the current developments also provide interesting starting points for new research projects.

Within the framework of the Research Platform, the members of the Sustainable Finance Working Group will continue to carry out in-depth research on the topic of sustainable finance.