Financing a Sustainable Future

In this episode, Tom Gosling speaks with Stefano Cascino about how large business groups respond to ESG disclosure rules. When parent companies face mandatory ESG reporting, they often improve their own scores—while quietly shifting environmentally or socially harmful activities to subsidiaries, especially those operating in countries with weaker institutions. Tom and Stefano discuss how this “ESG arbitrage” works in practice, why subsidiaries see more incidents after mandates are introduced, and how corporate groups restructure—through reallocating resources or divesting risky units—to manage these pressures. The conversation highlights the unintended consequences of uneven global regulation and why coordinated ESG policy matters.Host: Tom Gosling ⁠Contributor: Dr Stefano CascinoRead Stefano Cascino's paper, co-authored with Maria Correia: Behind the Corporate Veil: How Business Groups Arbitrage ESG Disclosure MandatesTo learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website (⁠⁠https://www.fmg.ac.uk/isf⁠⁠). ⁠

Tom Gosling talks to Dimitri Vayanos about the impact the green investors can have on stock prices by divesting from dirty firms and investing in green firms. There's a debate in the academic literature about whether the impacts are negligible or substantial. Using a theoretical model, Dimitri and his co-authors identify a significant but modest impact on cost of capital, measured in a few tens of basis points and share price impacts over a decade of around 10%. So noticeable, but not transformative in the context of the green transition. Host: ⁠⁠Tom Gosling⁠Contributor: Dimitri VayanosRead Dimitri Vayanos's paper, The Impact of Green Investors on Stock Prices, co-authored with Gong Cheng, Eric Jondeau and Benoît Mojon. To learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website (⁠⁠https://www.fmg.ac.uk/isf⁠⁠).

Dr Xi Li discusses her research on coordinated shareholder engagement through the UN PRI. She explains why engagements with a clear leader are more likely to succeed, what makes effective leaders, and how collaboration pays off—both in impact and fund flows.Host: Tom GoslingContributor: Dr Xi Li Read Dr Xi Li's paper, Coordinated Engagements co-authored with Elroy Dimson and Oğuzhan KarakaşTo learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website (https://www.fmg.ac.uk/isf).

Host: Tom GoslingContributor: Martin OehmkeTom Gosling interviews Professor Martin Oehmke on how bank capital rules might integrate climate risks. They debate whether rules can be used to incentivize green lending—or whether this would backfire—and why capital requirements can't play the same role as a carbon tax.Read Professor Martin Oehmke's paper Green Capital Requirements To learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website.