Work Package 5
Sustainability of Digital Finance
Leading institution
Overview
Climate change and environmental degradation are becoming an existential threat to Europe and the world, though inevitably, transitioning to a sustainable future with inclusive, green economies and resilient ecosystems is associated with many challenges. Within DIGITAL, we will make financial strategies for sustainable investing more objective, optimised, integrated, and operational, measure the social and environmental effects of sustainable finance, define the primary characteristics of sustainable financial assets and instruments and overcome the most significant obstacles to implementing sustainable finance strategies.
Within this research topic, a novel study will be conducted to simulate and evaluate markets in order to replicate the relationship between banks, financial institutions, and their retail and business clients in a sustainable environment that takes into account various factors (e.g., Green AI and green credit score). To evaluate markets, numerous indicators and metrics, including loan interest rate, customer attrition, CO2 emissions, customers' access to credit, and firms' profits, will be compared. We will use agent-based modelling for the first time to simulate different market scenarios in which agents involved in the industry take sustainable actions. Long-term financial growth will be analysed, and the findings will inform the development and modification of industry policies and strategies. This will ensure that sustainability considerations are integral to the Digital Finance industry, contributing to the European Green Deal in the process.
Research topics
Under this research stream, FOUR doctoral candidates will tackle the following research projects:
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