Academics advise European Commission on Environmental Impact Investment 

Associate Professor of Finance Dr Andreas Hoepner and Post Doctoral Researcher Pei Shan Yu have provided consultation for the European Commission’s ‘Future brief: Environmental impact investment’ paper.

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Associate Professor of Finance Dr Andreas Hoepner and Post Doctoral Researcher Pei Shan Yu have provided consultation for the European Commission’s ‘Future brief: Environmental impact investment’ paper.

The paper discusses socially responsible investments (SRI) that have the intention of creating measurable benefits to the environment and society aspects, in addition to creating financial gain.

Dr Hoepner’s and Pei Shan’s consultation highlights the issue of the trustworthiness of the data currently disclosed by companies’ that describes the environmental performance of the investees or funds.

Released December 2016, the report highlights two key issues based on their advice:

  • Greenwashing: when companies misreport their environmental performance
  • Bloomberg 100% disclosure of GHGs: currently only 53 firms worldwide in Bloomberg’s database are considered to report the full scope (100%) of their greenhouse gas emissions.

It is important to understand how to measure impact properly and accurately, what data are missing, and what needs to be enhanced. Another pressing issue raised was that rating or assessment of the environmental performance or impacts should be done by independent parties, who should not be paid by the organisations being assessed.

There were also suggestions made to use government-led frameworks, such as USEPA’s Toxics Release Inventory (TRI), or EU ETS, for more reliable environmental data; something that requires regulatory enforcement rather than being voluntary will be more desirable. A consistent and comparable measuring framework is required to ensure the quality of environmental performance data.

Read the European Commission's full report

Dr Andreas G. F. Hoepner

Visiting Professor
Professor Dr. Andreas G. F. Hoepner is Professor of Operational Risk, Banking & Finance at the Michael Smurfit Graduate Business School and the Lochlann Quinn School of Business of University College Dublin (UCD). Andreas is also heading the ‘Practical Tools’ research group of the Mistra Financial Systems (MFS) research consortium...
Published 17th January 2017
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