Climate change and environmental degradation have far-reaching consequences on society and the economy affecting both financial and non-financial institutions. This led to new risks and opportunities at the micro and macro levels, shaping a framework for a more sustainable economy. Board of Governors of the Federal Reserve System notes that climate change-related financial shocks pose both micro-prudential and macro-prudential risks, affecting the economy and the financial system. However, further analysis and research are needed to better understand the channels through which this phenomenon propagates. Fossil fuels are a key input into production, so economic growth increases greenhouse gas emissions up to a turning point. Consequently, these emissions contribute to climate change and its impacts while climate change has a potentially large negative feedback effect on future economic activity (e.g., firm profits, capital markets, and household wealth). However, many financial aspects of this issue - such as the pricing of these risks, the awareness and attitudes of investors towards climate-related risks - have been less investigated in the literature.
Environmental, Social, and Governance (ESG) integration is one of the most followed sustainable investment strategies in the world, being one way of addressing the risks posed by climate change. Recent evidence shows that companies that are more ESG-oriented tend to have lower financial distress risk and socially responsible investment funds performed better during the financial crisis of 2008-2009 than conventional funds. This empirical evidence suggests that ESG integration contributes to better allocation of resources across sectors and firms, while financial institutions can improve their long-term risk-adjusted returns. Overall, these decisions can mitigate some effects of climate change.
Therefore, we invite academics and researchers to contribute to this new Research Topic with original research papers focused primarily on the factors affecting economic growth, ESG, and climate-aligned approaches, challenges, and policy considerations. We welcome macroeconomic and firm-level studies which use methods such as econometric analysis, time series, panel data analysis, limited dependent variable analysis, simulations, and CGE analysis. Different levels of aggregation of data are welcome (country level, firm-level).
We welcome studies related to the following topics:
• Climate risks and the real economy
• Climate risks and equity markets
• Climate risks and fixed income markets
• Hedging climate risks using financial assets
• Climate risks and housing and mortgage markets
• Climate risks and financial stability
• Climate risks and firm financial decisions
• Climate change mitigation and adaptation strategies.
• Environmental certification programs
• Circular economy methods
• Evaluation of green policies and environmental policy measures
Topic Editor Dr. Sorin Gabriel Anton holds a few shares in relevant public companies listed on the Bucharest Stock Exchange. All other Topic Editors declare no competing interest with the theme of this Research Topic.
Climate change and environmental degradation have far-reaching consequences on society and the economy affecting both financial and non-financial institutions. This led to new risks and opportunities at the micro and macro levels, shaping a framework for a more sustainable economy. Board of Governors of the Federal Reserve System notes that climate change-related financial shocks pose both micro-prudential and macro-prudential risks, affecting the economy and the financial system. However, further analysis and research are needed to better understand the channels through which this phenomenon propagates. Fossil fuels are a key input into production, so economic growth increases greenhouse gas emissions up to a turning point. Consequently, these emissions contribute to climate change and its impacts while climate change has a potentially large negative feedback effect on future economic activity (e.g., firm profits, capital markets, and household wealth). However, many financial aspects of this issue - such as the pricing of these risks, the awareness and attitudes of investors towards climate-related risks - have been less investigated in the literature.
Environmental, Social, and Governance (ESG) integration is one of the most followed sustainable investment strategies in the world, being one way of addressing the risks posed by climate change. Recent evidence shows that companies that are more ESG-oriented tend to have lower financial distress risk and socially responsible investment funds performed better during the financial crisis of 2008-2009 than conventional funds. This empirical evidence suggests that ESG integration contributes to better allocation of resources across sectors and firms, while financial institutions can improve their long-term risk-adjusted returns. Overall, these decisions can mitigate some effects of climate change.
Therefore, we invite academics and researchers to contribute to this new Research Topic with original research papers focused primarily on the factors affecting economic growth, ESG, and climate-aligned approaches, challenges, and policy considerations. We welcome macroeconomic and firm-level studies which use methods such as econometric analysis, time series, panel data analysis, limited dependent variable analysis, simulations, and CGE analysis. Different levels of aggregation of data are welcome (country level, firm-level).
We welcome studies related to the following topics:
• Climate risks and the real economy
• Climate risks and equity markets
• Climate risks and fixed income markets
• Hedging climate risks using financial assets
• Climate risks and housing and mortgage markets
• Climate risks and financial stability
• Climate risks and firm financial decisions
• Climate change mitigation and adaptation strategies.
• Environmental certification programs
• Circular economy methods
• Evaluation of green policies and environmental policy measures
Topic Editor Dr. Sorin Gabriel Anton holds a few shares in relevant public companies listed on the Bucharest Stock Exchange. All other Topic Editors declare no competing interest with the theme of this Research Topic.