The BAR's Adam Smith ESG Special Issue Conference - ESG and Carbon Neutrality: Market and Moral Approaches

Call for Papers

Adam Smith ESG Conference

ESG and Carbon Neutrality: Market and Moral Approaches

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Confirmed Keynote Speakers:

Professor Sir Oliver Hart, Harvard University

Professor Steven Ongena, University of Zurich

Professor Richard Tol, University of Sussex

Other Keynote speakers to be confirmed.

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Venue: Edinburgh Business School, Heriot-Watt University, Edinburgh & Online

Conference Date: 27th – 29th August 2024 (Right after Edinburgh Festivals)

Conference Link: https://thebarevent.weebly.com/

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Rationale

Edinburgh Business School (EBS) at Heriot-Watt University (HWU) is organising an upcoming conference in the vibrant city of Edinburgh, Scotland, providing a dynamic platform for global researchers and practitioners. This event is designed to showcase cutting-edge studies exploring the intricate interplay between market-based and moral approaches in achieving carbon neutrality and advancing Environmental, Social and Governance (ESG) practices. In examining these approaches, we draw inspiration from the timeless insights of Adam Smith’s two influential works, “The Wealth of Nations” and “The Theory of Moral Sentiments”. While the former underscores the power of free markets and the concept of the “invisible hand”, the latter delves into the moral underpinnings of human behaviour and importance of social cohesion in ethical decision-making. Building upon the profound ideas of Adam Smith, our conference aims to investigate how market-based solutions, align with the principles of free markets while considering the ethical dimensions of environmental responsibility. We are keen on shedding light on the potential synergy between market mechanisms and moral sentiments in fostering sustainable finance and accelerating the transition to a net-zero emissions future.?

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We invite you to join us in Edinburgh for an engaging and enlightening experience, where thought leaders, researchers, and practitioners come together to exchange innovative ideas, share cutting-edge research, and collectively contribute to shaping a sustainable and responsible future.

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Related Literature

The risk associated with climate change on companies, industries, human society and wildlife, has become evident through the increasing frequency and severity of weather-related natural disasters such as flooding, droughts, and storms (IPCC, 2018). There is abundant evidence of negative financial implications of climate and climate-related factors across the globe (e.g., Huang et al., 2018; Ilhan et al., 2021; Nguyen et al., 2022; and Li et al., 2023). The effectiveness of the Paris Agreement depends on the extent to which the Nationally Determined Contributions (NDCs) and pledges are fully implemented by countries. However, significant gaps persist between the required global ambition and pledges, NDCs, to achieve a pathway consistent with carbon neutrality (IPCC, 2023). For example, the Climate Change Committee (CCC) described UK government’s efforts to scale up climate action as “worryingly slow” (CCC, 2023; BBC News, 2023). The rapid decarbonisation of the global economy cannot be achieved without unprecedented levels of investment. While there is sufficient global capital to close the investment gaps, significant barriers remain that hinder the redirection of capital towards climate risk mitigation strategies (IPCC, 2023).

The purpose of this call is to integrate Adam Smith’s perspectives into the study of climate and environmental issues, aiming to formulate effective and sustainable solutions that consider the broader societal implications. On the one hand, Smith highlights the role of free markets, where individuals pursuing of self-interest contributes to the collective good. His profound concept of the “invisible hand” advocates for market-based solutions, such as carbon pricing or emissions trading systems. These mechanisms create economic incentives for firms to reduce emissions and invest in clean technologies, fostering innovation and driving sustainable practices (e.g., Sangiorgi and Schopohl, 2021; Shen et al., 2023). Specialisation and increased productivity further drive innovation and technological advancements to mitigate emissions in critical areas (e.g., renewable energy, energy efficiency, sustainable and circular practices).

On the other hand, Smith emphasises on moral sentiments and the importance of empathy, fairness, and well-being of others. These principles can be applied to foster a sense of individual and collective responsibility towards the environment (e.g., Tangney et al., 2007). Recognising the impact of our actions on others cultivates a greater willingness to adopt sustainable behaviours and make choices that minimise harm to the environment (Barber et al., 2021). Furthermore, Smith’s discussions on the role of institutions, such as justice and benevolence, in fostering social cohesion can be extended to the creation of environmental policies, regulations, and institutions. Effective governance frameworks and international cooperation are essential for addressing climate challenges and ensuring environmental responsibility.

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Special Issue

The conference will lead to a Special Issue (SI) for the British Accounting Review. It welcomes novel research on a wide range of topics related to the influences of sustainable finance and carbon markets on green innovation, circular economy, and integration of moral and market perspectives in dealing with climate and environmental issues (e.g., Barber et al., 2021; Bolton and Kacperczyk, 2021; Starks, 2023; Sautner et al., 2023).

This SI will be managed by:

·????? Professor Bing Xu, HWU

·????? Professor Dimitris Christopoulos, HWU

·????? Professor Steven Ongena, University of Zurich

·????? Professor Grigory Vilkov, Frankfurt School of Finance & Management

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Together, we aim to bring scholars and practitioners from accounting, finance, economics, and related fields to foster the development of effective green market-based investment and financing mechanisms. By integrating ethical considerations into decision-making, we strive for a more just and sustainable future guided by principles of fairness, equity, and intergenerational stewardship.

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Possible topics for this special issue include, but are not limited to:

·????? Biodiversity and environment

·????? Carbon neutrality and climate risk models

·????? Carbon pricing and green innovations

·????? Climate risks and financial market stability

·????? Circular economy focused ESG investments on sustainable performance

·????? Environmental policy and regulatory policy

·????? Governance frameworks and international cooperation

·????? Green bonds and sustainable development

·????? Integration of moral and market perspectives in dealing with Carbon and ESG issues

·????? Litigation and regulatory changes on investment decisions

·????? Moral and ethical finance

·????? Gender and ethnical diversity and equality

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Conference Chair

Professor Angus Laing, Heriot-Watt University (HWU)

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Conference Co-chairs

Professor Bing Xu, HWU

Professor Wenxuan Hou, University of Edinburgh

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Organising Committee

·????? Professor Dimitris Christopoulos, HWU

·????? Professor Mark Schaffer, HWU

·????? Dr Yizhe Dong, University of Edinburgh

·????? Dr Yue (Lucy) Liu, University of Edinburgh

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Key Dates

Submission Deadline to the Conference

1st May 2024

Authors will be notified

15th May 2024

Conference Date

27th – 29th August 2024

Special Issue Submission Deadline

31st October 2024

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Submission

Submissions to the conference should be sent to: [email protected]. Note that acceptance to the conference does not guarantee final publication; and the submissions to the special issue are not limited to conference participants. The primary purpose of the conference is to provide feedback for authors to improve their manuscripts. Outstanding papers will be selected for the Best Paper Awards.

There is no submission fee, but there is a registration fee, which covers conference materials, refreshments, lunch, and the gala dinner.

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References

BBC News. 2023. Climate Change Committee says UK no longer a world leader. Available at: https://www.bbc.co.uk/news/science-environment-66032607

Barber, B.M., Morse A. and Yasuda A. 2021. Impact investing. Journal of Financial Economics, 139, 162-185.

Bolton, P. and Kacperczyk, M., 2021. Do investors care about carbon risk? Journal of financial economics, 142(2), 517-549.

Climate Change Committee (CCC). 2023. Progress report to parliament. Available at: https://www.theccc.org.uk/publication/2023-progress-report-to-parliament/

Gillan, S.L., Koch, A. and Starks, L.T., 2021. Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of Corporate Finance, 66, 101889.

Huang, H.H., Kerstein, J. and Wang, C., 2018. The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies, 49, 633-656.

Ilhan, E., Sautner, Z. and Vilkov, G., 2021. Carbon tail risk. The Review of Financial Studies, 34(3), 1540-1571.

International Panel on Climate Change (IPCC) Special Report. 2018. Global Warming of 1.5°C. Available at: https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/

IPCC AR6 Synthesis report. 2023. Climate Change 2023. Available at: https://www.ipcc.ch/report/sixth-assessment-report-cycle/

Li, H., Liu, Y. and Xu, B., 2023. Does target country's climate risk matter in cross-border M&A? The evidence in the presence of geopolitical risk. Journal of Environmental Management, 344, 118439.

Nguyen, D.D., Ongena, S., Qi, S. and Sila, V., 2022. Climate change risk and the cost of mortgage credit. Review of Finance, 26(6), 1509-1549.

Sangiorgi, I. and Schopohl, L., 2021. Explaining green bond issuance using survey evidence: Beyond the greenium. The British Accounting Review, 55(1), 101071.

Sautner, Z., Van Lent, L., Vilkov, G. and Zhang, R., 2023. Firm‐level climate change exposure. The Journal of Finance, 78(3), 1449-1498.

Smith, A., 1776. The Wealth of Nations. New York: Modern Library, 1937.

Smith, A., 1759. The Theory of Moral Sentiments. Oxford: Clarendon Press.

Shen, H., Yang, Q., Luo, L. and Huang, N., 2023. Market reactions to a cross-border carbon policy: Evidence from listed Chinese companies. The British Accounting Review, 55(1), 101116.

Starks, L.T. 2023. Presidential Address: Sustainable Finance and ESG Issues – Value versus Values. Journal of Finance, 74(8), 1837-1872.

Tangney, J.P., Stuewig, J. and Mashek, D.J., 2007. Moral emotions and moral behavior. Annual Review of Psychology, 58, 345-372.