Investing in Environmental and Climate Justice - Spring

Advisor: Holly Sullivan

Team Members: Holly Sullivan, Julia-Grace Sanders, Kasturi Thorat, Eirlys Chui, Matteo Chiadò Piat, Courtney Federico, Carrie Fernandes, Hannah Harasaki, Bevin Pan, Morgan Lehman, Xinran Wu 

Environmental and climate justice risks are increasingly material to financial performance, yet existing ESG frameworks inadequately capture how corporate activities affect surrounding communities. While ESG adoption continues to grow, most social indicators focus on internal corporate practices rather than external environmental and social impacts. This gap exposes investors to regulatory, reputational, and transition risks, as environmental injustice can lead to litigation, policy intervention, and project delays. Environmental and climate justice considerations are particularly significant in sectors such as transportation, finance, and oil and gas, where community impacts intersect with environmental degradation and economic vulnerability.

Integrating environmental justice into investment analysis strengthens risk management and supports long-term financial stability. Translating environmental justice impacts into financial risk metrics enables investors to identify material exposure and make more informed capital allocation decisions. Incorporating justice considerations into ESG frameworks improves investor understanding of transition risks and enhances alignment with emerging regulatory and societal expectations. These findings highlight the importance of standardized metrics, improved disclosure practices, and proactive investor engagement to incorporate justice considerations into financial decision-making. Expanding environmental justice integration into investment strategies supports both equitable outcomes and more resilient, forward-looking investment portfolios.

Learn more about the MPA-ESP Capstone projects.