Stockholm (NordSIP) – On Friday, January 22nd, Vinnova announced it will provide SEK47 million in funding for research on sustainable finance over the next 5 years. The grant was provided to the Sustainable Finance Lab, a new consortium led by Sweden’s Royal Technical University (KTH). According to the announcement, an equal amount has already been committed by financial market actors.
Other consortium members include VL Swedish Environmental Institute, Luleå University of Technology, Stockholm Resilience Center, the Royal Swedish Academy of Sciences, and the University of Gothenburg. The consortium also includes Lin Lerpold as an individual researcher from the Stockholm School of Economics’ Research Institute (SIR). Vinnova is Sweden’s innovation agency. It was founded in 2001 and is responsible for funding research and development to build Sweden’s innovation capacity.
The research will focus on rethinking social and environmental sustainability risks and opportunities, changing sustainability norms and policies, transformation, technology, and innovation. Kent Eriksson, professor at the Department of Banking and Finance at KTH and the Sustainable Finance Lab director, expressed gratitude for the investment.
Noting the real estate sector’s historical relevance as a trigger or significant contributor to past financial crises, Eriksson discussed the dangers of financial instability transmission arising from climate change. Noting that 60% of properties are sitting on banks’ loan portfolios, he warns that systemic crises such as climate change or COVID19 can ripple through the financial system via the real estate market. According to him, the purpose of the Sustainable Finance Lab is to help show how financial systems can be better equipped and more resilient to this type of threat.