Academic research award: problem solvers for the planet
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A new “Generation Z” of students are demanding business school programmes and curricula that will help make a difference to the world around them. But, outside the classroom, a number of business school academics are also focusing their research on solutions that address some of the biggest challenges facing our society and planet.
The academic research category of the Responsible Business Education awards celebrates some of the researchers whose work helps companies and other organisations do better. This year’s shortlisted entries were “compelling” in their breadth, says Karthik Venkataraman, one of the judges and a partner at Bain & Company. He was particularly impressed by papers that examined problems at the intersection of the environment and society, and the multi-sector interventions required to address them. “My sense is that environment and social topics still tend to be siloed, when we should all be pushing more to understand how these topics are deeply intertwined,” he says.
Keeping track of climate pledges
Each year, countries convene at UN climate summits and issue pledges. But who keeps the countries accountable?
At a 2009 summit in Copenhagen, rich countries promised $100bn-a-year by 2020 to support climate change mitigation and adaptation in developing countries. Yet only $83bn was provided in 2020, according to the latest OECD report. And even that figure is contested.
So, Anna Stünzi at University of St Gallen and Malte Toetzke and Florian Egli at ETH Zurich developed a natural language processing model — called ClimateFinanceBERT — that identifies and categorises these climate projects. “We performed some random checks of projects that were reported as climate finance and, for many of them, it was really obvious that they had nothing to do with climate finance,” she says.
Countries self-report the climate projects and the money they contribute, all using different methods and in a process that is not transparent.
A subsequent analysis of 2.7mn descriptions of bilateral development projects from 2000 to 2019 classified 80,023 projects as climate finance, totalling $80bn. For the period after the Paris Agreement (2016-2019), the researchers estimated that the climate finance delivered was 64 per cent lower than the sum that had been promised.
ClimateFinanceBERT is openly available to contributors, recipients, and NGOs to review climate finance contributions based on consistent criteria and a flexible scope. The researchers are now building a website to make data and results easily accessible.
“We’re glad that our model provides additional transparency, which is helpful for building trust and a common understanding of current flows,” says Stünzi, whose research was praised for its “very action-oriented targets”.
Measuring anti-ESG costs
The increasing emphasis that companies are placing on environmental, social and governance concerns has sparked a backlash from those who say this must result in worse profits. But, in Texas, where two laws barred municipalities from doing business with banks that boycott fossil fuel and firearms companies, this has ended up costing taxpayers millions of dollars in extra interest, according to research by Wharton assistant finance professor Daniel Garrett and Federal Reserve senior economist Ivan Ivanov.
The laws took effect in September 2021 and meant cities and counties could no longer work with five financial companies — JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America and Fidelity — that had previously underwritten 35 per cent of municipal bonds in the state.
Garrett and Ivanov’s paper showed that the smaller, local financial organisations which stepped in were less experienced and charged higher interest and fees. The authors estimated that the law cost Texas taxpayers $303mn-$532mn, by comparing the interest and fees before and after the law was passed.
“I expected to find some ripples due to kicking out banks with certain ESG policies, but I was very surprised how large the negative impacts we estimate were,” says Garrett, whose research was described by judges as “brilliant”.
Similar studies aiming to replicate Garrett and Ivanov’s work for five other states considering similar laws — Kentucky, Florida, Louisiana, Oklahoma and West Virginia — warned of an estimated combined losses of as much as $708mn.
Connecting business to the oceans
The ocean is one of earth’s life-support systems, regulating the climate and providing half of the world’s oxygen, according to Bocconi’s Stefano Pogutz. For this reason, his Business for Ocean Sustainability (BfOS) research project collects information about what companies are doing to address the challenges facing these marine ecosystems.
Some 90 per cent of the pressure on ocean ecosystems comes from inland-based activities, such as agriculture, food, chemicals, energy and fashion. The project sought the opinions of 56 scientists from top research institutions on the significance of direct and indirect pressures associated with 17 different industrial sectors.
The project also used natural language processing and AI to analyse sustainability reports and gauge how seriously 2,500 companies took ocean-related challenges. It found that the “life below water” UN Sustainable Development Goal was one of the least-prioritised of all the goals. Only half of companies were aware of the ocean-related challenges within their industries. And those companies that were addressing ocean-related topics tended to favour a reactive approach — for example, mitigating risks to meet compliance requirements.
Pogutz’s research recommends practical ways for businesses to reduce their impact on the ocean. It has also led to the creation of the Ocean Disclosure Initiative, a framework aimed at building awareness of business-related pressures on the ocean, calling for the release of key data and providing a rating methodology for business risks related to marine ecosystems.
“We’ve noticed that, despite the delay in acknowledging this major challenge, once companies are informed, there is a large interest and willingness to actively engage,” says Pogutz. His research was commended by judges as “comprehensive and a nice blend of [being] academically grounded but also practical, raising awareness on a woefully understudied topic”.
Assisting police with abuse activists
Pressure on public spending has been creating new problems in UK law enforcement. Stretched police resources have struggled to keep pace with numerous types of crime. But, in cases of child sexual abuse — which are now reported to forces on average every seven minutes, according to the charity NSPCC — a further hindrance arises: volunteer paedophile-hunting teams attempting to expose perpetrators in livestreamed confrontations.
This so called ‘hunter’ activity diverts and disrupts police operations. But Mark de Rond of Cambridge Judge Business School has attempted to apply a research-led approach to preventing this disruption, by studying the activities of a ‘hunter’ team over a period of three years.
De Rond found that, while police broadly welcome citizen involvement in fighting crime, they think hunters are unhelpful — even given the evidence they collect. The police accuse hunters of acting on insufficiently robust information and jeopardising ongoing investigations. They also say hunters fail to safeguard suspects with learning difficulties who may prove difficult to prosecute, and do not take sufficient action to protect suspects and their families from reprisals by neighbours and psychological injury.
His work has had a beneficial impact, though, by allowing police to explain to hunters how their work impacts policing priorities. Police and hunters even discussed ways in which they might work together more closely within the limits of the law — which, if put into action, would see these suspects going through the appropriate and regulated police processes.
Dan Vajzovic, deputy chief constable of Bedfordshire Police, wrote to de Rond to say: “Without you, I would have found it much more difficult to achieve a policy position which was effective and sustainable. I remain grateful for your ongoing labours in this area including the recent listening circle event which I hope will bring greater awareness of police concerns directly to the Online Child Abuse Activist Groups community more widely.”
Reporting of domestic violence
In another piece of police-related research, Saïd Business School’s Akshay Mangla and two co-authors studied ways of helping the state police in Madhya Pradesh, one of India’s poorest regions, improve its response to domestic violence.
“We found an extremely under-resourced and overworked police force within a highly patriarchal organisational culture, which militated against police action around women’s cases,” explains Mangla. “Patriarchal norms” marginalised female officers, and even they tended to dismiss women’s complaints
Their study analysed the impact of introducing women’s help desks (WHDs) in police stations. These offer a private space where women can lodge a complaint with specially trained officers.
This randomised controlled trial found that police registration of domestic violence and other crimes against women increased significantly in stations with the help desks compared with those without. The stations registered 14 per cent more “first information reports”, which led to criminal proceedings, as well as a staggering 1,000 per cent more domestic incident reports, which can initiate civil proceedings.
The research — praised by judges for “tackling a hugely important topic in a very data-driven and scientific way, but with attention to cultural norms and contexts” — has prompted new police training modules on gender. Standard operating procedures for women’s cases are now included in training for recruits and refresher courses for existing staff. In partnership with the MIT Poverty Action Lab, Mangla and his colleagues have helped create a centre for action-based research, known as the Parimal Lab, based within the Madhya Pradesh police department, where 20 police officers have gained certification as gender-based trainers.
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