Number of available topics: 2
Sustainable investing is becoming increasingly more important for Robeco and its clients. Historically investors have focused mostly on their financial performance. In the capital asset pricing model risk-averse investors maximize their utility, which is a function of risk aversion, risk and return. We find these concepts too limited and are witnessing a changing paradigm. Investors are increasingly aware of their social responsibility and these days many investors target more than just their financial performance. The extent to which sustainability influences investors’ decisions however differ, some investors might be more sustainability focused than others.
The role that sustainability plays in asset pricing is a hotly debated topic, in both academia and the investment industry. See for example the recent proposal of an activist shareholder of the energy behemoth Shell to split the company in two: a clean and a conventional energy company . According to the shareholder the company currently has too many competing stakeholders pushing it in too many different directions. Qualitative arguments for and against a sustainability factor can be made. Moreover, empirical evidence is mixed and it is yet unclear how sustainability is priced. Historical data, especially those that lie further back in history might not be reflective today’s markets or that of the future, posing additional challenges to asset pricing tests.
The projects will challenge you to work effectively with large datasets, as well as to consider the theory linked to your findings. We have access to a unique dataset of environmental, social and governance (ESG) factors, like CO2 emissions, other pollution and waste related data, as well as data on the United Nations’ Sustainable Development Goals (SDG).