SUSTAINABLE FINANCE AND RESPONSIBLE INVESTMENT

Scientific project

Research in the SFRI Chair aims to understand the role of responsible investment in the economy and its impact on the functioning of companies and other economic actors. Questions of measuring the extra-financial performance of economic projects, the attractiveness of different responsible investment strategies and the real influence of shareholder engagement are central to the Chair’s concerns.

The Chair’s research projects address four main axes:

• Investor Motivation for SRI
  This project aims to empirically study the motivation of individual investors with regard to responsible investment products. The methodology combines approaches used in psychology and financial economics. The idea is to ask investors to answer a survey aimed at measuring psychological dispositions such as altruism, social intelligence, temporal myopia and moral values on the one hand, and letting them participate in a real-life experiment in which they allocate capital through various funds, whether responsible or not, on the other. The aim is to better understand the determinants of investment in responsible funds.
• The link between extra-financial performance and bond markets
  Bond markets are the largest financial markets in the world and represent a significant portion of the portfolios of institutional investors and asset managers. It is therefore crucial for the development of responsible investment to have a good understanding of the relationship between ESG factors and interest rate products issued by companies and especially by the public sector (which is much broader). We seek to produce models that better understand the factors that can be used to judge the financial viability of a firm or the debt of a country and to empirically investigate the link between bond markets and the environmental, social and governance performances of businesses and countries.
• Corporate governance
  This research project examines the impact of various governance issues, related to the independence and expertise of directors and the remuneration of directors, shareholders and/or directors on the economic, financial and extra-financial performance of companies. The objective is to construct a consistent conceptual framework and detailed empirical studies on the French and international financial markets.
• Shareholder engagement
  Shareholder engagement seeks to influence the behaviour of companies. Engagement can take a number of forms, such as dialogue between shareholders and management, shareholders joining a board of directors or shareholders proposing motions at shareholders’ meetings. This research project deals with a variety of topics related to engagement. How do responsible investors develop their dialogue policies? What can be expected from financial performance on non-financial matters? What is the relationship between shareholder engagement and the most advanced companies in their sector in terms of accountability?