2020: the year of net zero commitments – an interview with Dr Ben Caldecott, Oxford University

With climate change creating investment risks and opportunities through structural changes in almost every sector of the global economy, it is vital that we at Lombard Odier are able to benefit from the latest research on sustainable finance to make the best possible decisions for the Bank and our clients.

To that end, Lombard Odier has partnered with the University of Oxford to support teaching and research on sustainable finance and investments. Besides enabling pioneering research in this field, this partnership will enable us to work closely with the University of Oxford to integrate the latest knowledge around the relationships between investing and sustainability into our investment strategies.

One example of this is spatial finance: the integration of geospatial data and analytics into financial theory and practice. Instead of relying on companies to proactively disclose and report on sustainability, satellite imagery can provide a more objective way of assessing a company's sustainability credentials. Spatial finance could open up whole new frontiers of sustainability analysis—and Lombard Odier's partnership with the University of Oxford will help develop this exciting new field of research.

Another area of focus is around the use of carbon offsetting. Although offsetting is undoubtedly a crucial tool in the fight against climate change and the transition to net-zero emissions, they can also act as a crutch for companies looking to quickly create the appearance of sustainability on paper instead of doing the hard work of making their business models more sustainable in reality. And with investors becoming increasingly focused on decarbonisation and reforestation, improving our understanding of how best to use carbon offsetting in theory and practice is a vital project.