Sustainable Finance Gets Boost from Erasmus Platform for Sustainable Value Creation

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Sustainable Finance Gets Boost from Erasmus Platform for Sustainable Value Creation

Deloitte Joins as Knowledge Partner — Fusing Practice and Academia

From making the agricultural sector more sustainable to electrifying vehicle fleets, financial institutions play a pivotal role in the transition to a sustainable economy. The Erasmus Platform for Sustainable Value Creation (the ‘Platform’) brings together financial institutions and academia to accelerate the transition. Deloitte contributes as a knowledge partner.

The Rotterdam School of Management launched the platform three years ago in order to link everyday sustainable finance practices of banks and insurance companies. “One of the biggest challenges for the financial sector is to take a more integrated and long-term approach than the current focus on short-term results for shareholders,” says Dirk Schoenmaker, Professor of Banking and Finance at the Rotterdam School of Management. “With our platform, we want to develop new methods to incorporate sustainability into asset pricing and valuation, and to make the transition towards long-term value creation.” The platform brings together academic faculty researchers, PhD, Master and Bachelor students, MBAs and Executive Education attendees, NGOs and professionals in the financial industry.

Deloitte is the first knowledge partner to join the platform’s advisory board. “As a knowledge partner and advisor to financial organisations, Deloitte knows how to translate scientific research into the daily practices of a financial institution,” says Schoenmaker. “This is important for the success of our platform, because we want to help embed sustainable change in existing processes. Deloitte is familiar with these processes across the financial sector and has a wealth of experience in redesigning them for different purposes.”

Purpose-led financial services

“We believe that a purpose-led financial services is common sense,” adds Hesse McKechnie, director of Sustainable Finance at Deloitte. “This platform connects the most important parties in the sector, leading to a significant impact. That is why we joined. Academia has an interesting, forward-looking perspective that we need to learn from. It’s time we put that knowledge into practice.”

Integrated value in the FSI

Deloitte is a member of the platform’s working group on integrated value, which aims to develop concrete guidelines for the integrated valuation of investment projects and companies. Integrated value is the value of a product, business case or company, including all its positive and negative externalities. “Financial institutions have been working on attributing financial value to climate risk for some time, but impact measurement for other ESG factors such as biodiversity or social capital is still very nascent,” says McKechnie. “In this working group, we are looking at how to create a methodology to help determine integrated value based on research and case studies.”

To do that, the working group uses the insights of students from the RSM Honours Programme, in which Deloitte also participates. For example, the students recently researched how banks can judge the credit applications of farmers aspiring to transition from conventional to organic farming by looking into the environmental costs and benefits of that transition. The students used nine real-life cases to calculate their integrated value with the True PriceTM methodology, guided by the Impact Institute.

Looking forward, the 2022 Honours Programme students will conduct a similar study for the automotive sector, looking at the transition from combustion engine vehicles to electric vehicles. For financial institutions, it will be interesting to better understand how loans and investments will be affected by the risk of stranded assets. In these research programs, students learn how informed lending and investment decisions can drive positive change, accelerating the transition to a more inclusive economy and increased SDG financing.

Purposeful engagement

The collaboration of the platform with financial institutions and Deloitte fits perfectly with the ambitions of the Rotterdam School of Management, which recently installed Daan Stam as Dean of Engagement and Partnerships to intensify collaboration with external parties. “Centres like the Erasmus Platform for Sustainable Value Creation are important vehicles for realising our strategic ambitions and are invaluable mechanisms for research innovation, knowledge dissemination and positive impact,” says Stam. “They fulfil several roles that may not be easily achievable through existing academic educational and research structures. Since RSM centres engage with corporate partners such as Deloitte, they can involve academia in contemporary problems and needs, create collaborative opportunities between the real economy and academia, engage with society, foster impactful research and create real-time usable knowledge.”

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