The programme will look at how climate risk exposure and sustainable finance affect the risk-return trade-off of assets

Exeter Sustainable Finance Centre collaborates with Royal Bank of Canada Global Asset Management

How climate risk and sustainability affect investment returns will be the focus of an innovative new research programme at the University of Exeter Business School.

The RBC Global Asset Management Sustainable Investment Research Programme is a collaboration between the Royal Bank of Canada Global Asset Management and the Exeter Sustainable Finance Centre within the University of Exeter Business School.

The programme will be led by Professor Chendi Zhang, Director of the Exeter Sustainable Finance Centre, and will look at how climate risk exposure and sustainable finance more generally affect the risk-return trade-off of assets.

RBC Global Asset Management’s funding will be matched by support from the University of Exeter Business School, and the two-year research programme will see the University recruit a new Postdoctoral Research Fellow to undertake the research under Professor Zhang’s supervision.

The programme will provide academic leadership, as well as a credible and visible evidence base, for the development of new initiatives to enhance understanding of how climate risk and sustainability affect investment returns.

It will also include collaborations with experienced research leads in other departments across the University.

Professor Zhang said: “We have seen a remarkable growth in sustainable investing in the past decade.

“Climate change and its implications for financial markets have drawn increasing attention from investors and policy makers but an important question still to be addressed is how climate risk and sustainability affects asset returns.

“This research programme will provide insights into what impact these sustainability factors are expected to have in the future, and whether climate change can be used as a distinct investment factor.”

Melanie Adams, VP & Head, Corporate Governance & Responsible Investment at RBC Global Asset Management said: “We are excited to support this programme. RBC Global Asset Management is committed to responsible investing, to assess ESG risks and opportunities as part of the investment process to help our clients meet their investment objectives.

“In an increasingly complex investment landscape, where environmental and social factors have a greater potential impacts on investment returns, this programme will help to understand these risk exposures and the opportunities for more sustainable investment decisions in the future.”

Date: 12 July 2022