Professor Timothy King’s research group seeks the views of senior bank and finance sector practitioners including executives, regulators and policy makers as to what the sector is doing and should do to meet challenges brought by climate change. Timothy King refers to the OECD 2021 report that underlines the depth of risk that is at stake: ”The rapid loss of biodiversity gives rise to substantial, yet underappreciated, risks that impact the real economy and the financial sector, as well as future and current generations.”
The project hosted by the University of Vaasa School of Accounting and Finance employs novel lending data to examine the purchase choices of consumers with respect to environmentally friendly purchases. King sees banks as crucial to these trends: ”Banks are both directly impacted by climate change as well as being vital to global ambitions to address this failure through encouraging best practices and behaviours in other industries.”
Thus, the project looks at the role and responsibilities of financial institutions for addressing climate change and the rapid loss of biodiversity as major challenges.
With a €100,000 research group grant from Liikesivistysrahasto, the project unfolds in a two-year span in which two main research questions will be addressed. The first work package explores the impact of new mandatory climate and biodiversity reporting requirements in the context of the European banking sector. The second work package focuses on which citizens care most about the climate and biodiversity. The importance of novel data is central to the group’s research design. ”Semi-structured interviews with senior banking practitioners and experts will be conducted, and we use a unique propriety bank lending dataset that includes 1,000,000 loans from Italy,” King adds with professorial enthusiasm.
In addition, the group is a part of the organizing team of “Accounting and Accountability for Climate Change” conference that will be organized by the University of Vaasa on August, 11-12th, 2025. The conference aims to promote multidisciplinary dialogue to address climate-related challenges. The area of particular focus is how do we account for climate and biodiversity. Discussions around these themes will be led by experts from the academic sector as well as from supranational regulators and standard setters. The event is expected to appeal to academics in fields such as accounting and finance, as well as related fields in addition to practitioners. The conference will develop and synthesize best practices to be disseminated to management, investors, regulators, and broader stakeholders, while encouraging further research on key issues. Accepted papers will have the option of submitting to a special issue of the Multinational Finance Journal, taking into account the feedback received during the conference.