About the Initiative in Sustainable Finance

Incentivising the private sector to finance a sustainable future

To reach net zero, the global economy will have to close a substantial investment gap measuring in the trillions of dollars. Such a gap cannot be filled by the public sector alone and the role of private sector is critical. Understanding the conditions necessary to stimulate suitable private sector engagement and capital flows is now a critical need. We apply academic rigour to the study of the incentives the private sector has to finance a sustainable future.

Our work focusses on the incentives of key players in the private sector to engage with the net zero transition: asset owners, asset managers, and corporate leaders. This is an emerging and fundamental area of research that requires foundational analysis with the potential for significant and lasting thought-leadership and impact. We draw on the breadth of academic capability across LSE to create actionable output for corporates, policymakers, companies, and investors. 

We aim to be strongly integrated into the core academic disciplines at LSE while generating impactful output for the practitioner community. This involves encouraging new research where it is needed and making existing research relevant to practitioners. Accordingly, we conduct, stimulate, and disseminate research with colleagues from across LSE.

Research themes

Work will be carried out both at the “micro” level -- understanding investor preferences, the role of asset managers, and incentive provision inside corporations – and at the “macro” level – focussing on the conditions needed to blend public and private sector finance together to achieve desirable transition outcomes. We will also study the role of financial regulation in influencing these micro and macro incentives. 

Activities

The ISF aims to conduct, disseminate, and stimulate research on sustainable finance, drawing on the breadth of capabilities in LSE. We carry out a range of activities under these headings.