03.09.2024Research in Sustainable Finance: Dr. Chiara Colesanti Senni

Chiara Colesanti Senni is a Postdoctoral Researcher at our Department of Finance and holds various other positions in other institutions and groups (e.g. Grantham Research Institute, Oxford Sustainable Finance Group, Deutsche Bundesbank).  She works on the risks posed by environmental degradation to the economy accounting for indirect effects and through scenario analysis and investigates the consequences of these risks for monetary policy and financial supervision. Chiara is a co-founder of the Sustainable Macro research network, a platform which helps the development of new policy relevant research projects.

You hold a PHD in Economics from ETH. What made you take on the Postdoc position DF?

Since my PhD in Economics at ETH Zurich, I have been deeply interested in how environmental factors influence economic systems. The opportunity to join the University of Zurich’s Department of Finance allowed me to integrate my environmental economics background with financial perspectives. I was particularly drawn to the growing importance of sustainable finance and how financial systems can mitigate environmental risks. The Department of Finance at UZH offered an excellent platform to explore these intersections more thoroughly.

What motivated you to pursue an academic career? And how did you research interest change over time?

My academic journey has always been driven by a curiosity to understand complex systems, particularly those involving environmental and financial interactions. My research has consistently focused on environmental economics, but over time, I also recognized the significant impact that financial systems can have on environmental outcomes. This broadened my focus towards sustainable finance, where I now explore how the financial system is exposed to and how financial tools and policies can address environmental risks. The academic environment provides the freedom to pursue these interdisciplinary research questions and contribute to critical global challenges.

You are part of our department's Initiative in Sustainable Finance, launched earlier this year.

The Initiative in Sustainable Finance has been an exciting endeavor. Collaborating with colleagues like Markus Leippold, Tobias Schimanski, and Saeid Vaghefi has been incredibly rewarding, as we bring together diverse expertise to tackle the pressing challenges of sustainable finance. My research within the initiative focuses on how to detect environmental risks and their impact on financial markets. Working with such a talented and motivated team has allowed us to push the boundaries of what sustainable finance can achieve, particularly in terms of influencing policy and industry practices.

Let's discuss your future endeavors. You are set to relocate to New York City. What led you to choose this new direction in your academic journey?

Temporarily relocating to New York City represents a significant step in my academic career. The decision was influenced by the opportunity to engage with leading institutions and researchers in the field of sustainable finance. New York is a global hub for finance, and being at the center of this dynamic environment will allow me to expand my research network and access new data and insights. As well as new approaches to research and collaborations. I hope to continue my work on integrating environmental risks into financial decision-making and contribute to the development of innovative financial instruments that support sustainability.

Are there any specific research collaborations or initiatives you're looking forward to pursuing in the future?

One research project I’m particularly excited about investigates the impact of sentiment towards nature-related risks on stock returns and companies' creditworthiness. This study examines how factors such as media attention on nature issues, analysts' comments, speeches by regulators and central banks, and the quality of ecosystem services influence stock returns and credit default swap (CDS) spreads. We will rationalize our findings using an asset pricing model where long-run risk is tied to the state of nature loss, and we will use this model to derive market-implied estimates of welfare changes due to nature loss.

The “secret sauce”: What advice would you give to current PhD students in Finance who are aiming for positions in academia after completing their studies? Are there any specific strategies or preparations they should consider?

My advice to current PhD students would be to stay curious and open to interdisciplinary approaches. Sustainable finance, for example, requires a strong foundation in both economics and environmental science. Building a diverse skill set can make you more adaptable and competitive in the academic job market. Additionally, focus on developing a solid research agenda that addresses both theoretical and practical challenges. Networking is also crucial—seek out mentors, attend conferences, and engage with the broader academic community. Finally, don’t be afraid to tackle big questions and don’t be driven by publications only; ambitious and unconventional research can set you apart and lead to significant contributions to society although this might not always be acknowledged in academic circles.

On a personal note: Did you find an apartment in NY (and can we visit you)?

I’m still in the process of finding the perfect place in New York, but once I’m settled, I would be delighted to welcome my Zurich colleagues for a visit! Exploring the city together and discussing our latest research over coffee sounds like a wonderful way to stay connected.

We wish you all the best and much success in your new career step! Since you will remain a Senior Researcher in our department, we look forward to welcoming you back.

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