Fifth Annual CSFN Conference

The 5th Annual Canadian Sustainable Finance Network (CSFN) Conference brought together thought leaders and decision makers from academia and the finance industry to discuss the latest research and developments of best practices for sustainable finance in Canada and beyond. This year's conference was presented by the  McGill University Desautels Faculty of Management.

The conference was held in person May 9-10, 2024, on the McGill downtown campus. Highlights include a keynote address by Professor Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at the The University of Chicago Booth School of Business.

The conference kicked off on Day 1 with a Thought Leadership Session targeted at a mixed practitioners/academics audience, with insightful presentations by 13 top scholars from the CSFN. That evening there was a symposium on the topic, “Decarbonizing Canada by 2050: What will it Take?” co-organized with the Sustainable Growth Initiative (SGI) at McGill University.

Highlights from the Day 1 Thought Leadership Session

Alison Taylor, Smith School of Business, Queen's University: What is the aggregate investor response to climate litigation risk?

What are the pressures firms face with increasing climate risks? Alison Taylor breaks down physical and transition risks, highlighting the growing trend of liability risk. She discusses the landmark case of Milieudefensie et al. v. Royal Dutch Shell plc., where Shell was mandated to reduce global emissions by 45% by 2030. Discover the implications of this ruling and its impact on environmental responsibility.

Sebastien Betermier, Desautels Faculty of Management, McGill University: The risk-return trade-off of responsible investing

Sebastien Betermier addresses whether responsible investing leads to higher or lower returns. Using a supply and demand framework, he examines how changes in supply and demand affect the risk-return dynamic in financial markets. Understand the various impacts these changes have and their significance for sustainable investing.

Pierre Chaigneau, Smith School of Business, Queen's University: Executive compensation with social and environmental performance

Pierre Chaigneau explores how to drive sustainable finance by linking executive compensation to firm performance. He introduces a model that integrates social and environmental metrics into CEO pay, enhancing the principal-agent model of multitasking. This model allows managers to factor in performance measurement noise when making decisions. Learn when ESG-based compensation is most effective.

Alexander Dyck, Rotman School of Management, University of Toronto: Family-controlled firms and sustainability: All bite and no bark

Using two sources of friction — the possibility of private benefits of control and generational thinking — Alexander Dyck provides a comprehensive analysis of the unique dynamics of family-controlled firms and their implications for sustainable business practices.

Elizabeth Demers, School of Accounting & Finance, University of Waterloo: TCFD Reporting: Early evidence on the value [ir]relevance of global climate-related disclosures

Does making climate-related disclosures add value for companies? Elizabeth Demers' findings highlight that while investors pay attention to these disclosures, they often find them difficult to understand, or view the associated risks as too remote to impact current prices. 

Nga Nguyen, École des sciences de la gestion, UQAM: Stakeholder orientation, environmental performance and financial benefits

Explore the nuanced relationship between environmental practices and financial results in the context of North American businesses, with this presentation by Nga Nguyen.

Ipek Yavuz, Desautels Faculty of Management, McGill University: Investor engagement and ESG

Ipek Yavuz and colleagues seek to answer the question: "How do active and index investors engage with their portfolio companies?" Ipek's presentation assesses whether there are observable differences in the nature, mechanisms, and outcomes of engagement by active and index investors, and how these differences align with their comparative advantages. 

Claudia Champagne, École de gestion, Sherbrooke University: Bad-ESG vs good-ESG firms: An analysis of new ESG factors

Should ESG be a factor in asset pricing models? Claudia Champagne discusses the importance of terminology and aims to provide clarity on this topic. Her presentation explores various factors that contribute to a firm's ESG reputation, including the general ESG factor, non-ESG exclusion premium, and ESG preference premium. 

Olaf Weber, Schulich School of Business, York University

Lenders have found that green lending can lower credit risk, while higher carbon costs increase credit risk. With Olaf Weber's presentation, discover the evolution of sustainablility criteria in credit risk assessment and its implications for the financial sector.