Insights from EHL’s 2025 Sustainable Investing Forum
On June 12, 2025, EHL and Asteria Investment Managers held its third-annual Sustainable Investing Forum on the school’s flagship campus in Lausanne. The focus of this year’s event was on shareholder engagement as a critical driver of sustainable strategies. Once again, the forum brought together academics and industry players from diverse backgrounds.
Michael Ryf, a PhD candidate from the University of Bern, kicked the day off on an academic note. His presentation, entitled “When ESG ratings change does it affect pricing of firms’ cost of debt?”, provided evidence that companies with higher ESG ratings (environmental, social and governance) have lower spreads (i.e., cheaper debt costs). Using data after a methodology change was made by Refinitiv ESG on April 6, 2020, he found that ESG scores fell on aggregate 10 points, which lead to a 9% increase in spreads. Investors are also more likely, the paper found, to dump downgraded firms’ loans. However, Ryf challenged his own conclusions: The drop seemed to fade after six months, so did it revert to the norm? Were results influenced by Covid-19, the 2015 Paris Agreement or voter enthusiasm with green parties? Nevertheless, Ryf concluded, debt investors do indeed seem to care about ESG ratings!
This was the question Tobias Wekhof, postdoctoral researcher at ETH Zürich, asked conference participants. The response was unsurprising: risk, return, performance, etc. Yet, Wekhof’s study found that over half of Swiss retail investors’ unprompted answer was ‘sustainability’. Indeed, it was among the top 3 priorities, he found. Awareness is one thing, but literacy is another. Indeed, Sustainable Finance Literacy (SFL) is low, which hinders green investment levels. Due to a lack of standardized sustainability ratings, investing responsibly can be a maze. What if we were to give investors a map? He administered a survey that found that ‘green investors’ will invest in ESG products regardless of their financial literacy levels. Moreover, he proposed providing banks with a sustainable investing crash course (just a 5-slide presentation) to enhance their clients’ SFL. His conclusion asserted that it is indeed possible to teach sustainable finance to clients who will then be more likely to make more ESG-aligned investment decisions. As shown in the graph below, informed investors tend to increase exposure to green products: investors are reducing their allocations to products without a specific sustainability strategy (Art. 6) or with only limited sustainability objectives (Art. 8 and Art. 8 plus), in favor of products with an explicit sustainable investment objective (Art. 9). The shift is still modest – just 4% of portfolio allocations, but as the saying goes, small streams make big rivers.”
Wekhof, T., Filippini, M. and Leippold, M. (2024) The Impact of Sustainable Finance Literacy on Investment Decisions.Swiss Finance Institute
As a finance professor on EHL’s Singapore campus, Adam Aoun has a unique perspective on the Asian market. ESG isn’t ingrained in the psyches of mainstream society or investors in Asia, he stated. ‘So why should ESG skills be taught in the classroom?’, he asked the forum. They’re no longer ‘nice’; they’re mainstream. Echoing previous speakers, Aoun cited that there are roughly 600 different ESG approaches and a host of different rates, frameworks, standards, etc. In his sustainable finance class, he challenges students to question what they think they know by taking a critical mindset towards finance and sustainability.
Like all good educators, Aoun moved on by asking a somewhat rhetorical question to the audience: ‘Can sustainability and finance co-exist?’. Stated differently, can a company do good and do well? The answer is somewhat mixed, Aoun explained, due to various issues including: the profit vs. sustainability conflict (short-termism or having the patience to see efforts pay off); greenwashing (cherry picking which standards you use); a lack of enforcement; an absence of a carbon pricing framework; and soft accountability (who verifies what companies are actually doing?).
Aoun concluded: A responsible investor isn’t someone who knows all the answers, but someone who keeps asking better questions”.
Philippe Masset, Associate Professor of Finance at EHL, introduced the roundtable discussion as a way to confront differing opinions and engage with professionals on seemingly opposite sides of the profit vs. sustainability debate.
Philippe Rey a longtime manager at Holcim, the Swiss cement manufacturer, might have felt like a fish in a frying pan, given that 6% of Switzerland’s CO2 emissions in 2020 were linked to the production of cement. Sand, gravel, chemicals and water aren’t ingredients typically associated with green investing. After water, cement is, however, the second-largest product consumed in the world. In a candid statement, Rey stated that Holcim is seeking to decarbonize cement and to cut CO2 emissions in Switzerland by 30%. For Rey, sustainability’s role at Holcim is to ensure the long-term survival of the company, even if there isn’t much immediate ROI. Holcim investors are convinced of the long-term viability of the company. The (paved) road has been long, however. It has taken, Rey explained, over 10 years to convince investors of sustainability’s importance.
Professor Aoun chimed in that transparency and being honest with investors is the key. Another panelist, Florence Hugard of the Enterprise for Society Center, spoke to the importance of concrete commitments (biodiversity, climate change, etc.) and the timing of firms’ ESG announcements (during a reputational crisis, change of management team, new regulations, etc.). On shareholder engagement, Florence states that academic research has shown that collaboration between investors appears to be a key factor in the impact potential of active ownership. It reduces the costs of duplicating responsibilities and research efforts. While also appearing to be more effective: companies targeted by collaborative engagement perform better over time.
During the discussion, participants peppered Rey with questions. Are ESG commitments clearly communicated across the entire company? Is everyone going in the same direction? For Holcim, there is dialogue with shareholders about its sustainability strategy. Rey personally takes investors–more than clients–on tours of sites in Switzerland to show them how cement production looks on the ground. The circular economy, he continued, is a mainstay of its strategy. In response to a question from the audience, Rey said that there has been very little investor backlash about Holcim’s environmental commitments because the firm’s strategy is clear. While cement is not known as a sustainable material, at least extraction is concentrated in mines and not spread over acres and acres of forest (if buildings were to be built with wood, for example), Rey explained.
To broaden the debate and explore emerging investments, we dedicated time to crypto assets this year. Jullien Godat of crypto company L1D outlined this new industry's fundamentals, promising a decentralized internet and direct value exchange without intermediaries. While ESG questions persist—energy use, governance, and social impact—crypto-assets offer compelling opportunities. They enable financial access for previously excluded populations, advancing financial inclusion. Web 3.0 creates new investment possibilities that may eventually align with green finance and sustainable financial systems.
As in past editions, the roundtable and the keynotes were exciting opportunities to hear from industry leaders with different points of view while the academic presentations offered a glimpse into exciting new research. This rich environment fostered interesting discussions about the opportunities and challenges associated with sustainable investing in today’s complex world.
Looking ahead to the 4th edition in 2026: surprises await. With real world sustainability challenges remaining, we will spotlight innovations and disruptions that institutional investors face with asset allocation strategies and unlock new opportunities.
Written by
Dr. Philippe MassetAssociate Professor at EHL Hospitality Business School |
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Natacha GuerdatManaging Director at Asteria Investment Managers |