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Collaborative Ecosystems in Sustainable Finance: Harnessing the Wisdom of Crowds

Date

Apr 30, 2018 - 6:00 p.m. to 7:00 p.m.

Location

Columbia University, Pulitzer Hall, Lecture Hall

Financial markets are the primary source of signals used to direct investment and economic activity in a capitalist global economy. These signals are more accurate and robust when they result from decentralized decisions by many small market participants rather than a few dominant players. An important societal role of the financial sector is to provide a low cost method of channeling capital to productive investment opportunities that are beneficial to natural and human ecosystems. If this role remains unfulfilled efficiently, a society cannot fund new capital formation and innovation, virtually ensuring the future elimination of wealth enhancement opportunities. A key obstacle to channeling capital to new and small businesses or specific local projects is the high cost of information gathering, due diligence, selection, and impact assessment. Sustainable finance for new environmentally focused ventures, targeted municipal finance for distributed investments in climate resilience and small business finance pose especially challenging information asymmetry problems. The financial sector can play the crucial role of directing investment towards attaining social and environmental goals while preserving the discipline of metrics-based selection and quantitative evaluation when enhanced by collaborative choices. Collaborative ecosystems that foster cooperation between many stakeholders in the financial intermediation process, for example, by leveraging the information embedded in crowdsourced review platforms, promise to harness the wisdom of decentralized choices by the multitude of small decision-makers.

The panel speakers will explore the value and limitations of using collaborative systems of measurement and automated rules to channel investment capital to large numbers of small companies. We will discuss approaches to opportunity identification and risk management in the context of companies with limited financial history, often operating in innovative and disruptive sectors related to social equity and environmental sustainability. We will address the special challenges of estimating expected return and potential loss in the absence of a long history of stable operating metrics. The panel discussion will outline the importance of keeping the cost of evaluation and monitoring low and using environmental, social and governance metrics, where available, to enhance investment decision-making.

This event is free and open to the public; RSVP required. The panel discussion will be followed by a reception with wine, beer and hors d’oeuvres.

Event Contact Information: Kelsie DeFrancia, kdefrancia@ei.columbia.edu

Speakers

Introductory Remarks: Steve Cohen, Executive Director, Earth Institute
Moderator: Satyajit Bose, Lecturer and Associate Director of the Research Program on Sustainability Policy & Management
Panelists: Alexander Laipple, Director, Neighborly; Fan Gao, Senior VP, CreditEase; Julia Moshkin, Senior CSR Analyst, EcoVadis; Amie Patel, Director, Elevar Equity