This research stream is dedicated to exploring ESG (Environmental, Social, and Governance) risk dimensions and their impact on investors and SMEs (Small and Medium Enterprises).

The main project activities include the assessment and measurement of ESG risks, with particular attention to SMEs, the impact of sustainable investments, the integration of sustainability considerations into investors’ risk management at individual, corporate, and systemic levels, and the incorporation of new sustainable finance instruments.

The project includes specific activities to analyse and define the factors influencing how companies report environmental, social, and governance (ESG) risks. This involves the creation of a dedicated database on ESG and climate-related risks. Furthermore, ESG assessments will be developed using targeted surveys and publicly available information. This process aims to provide a clear and structured evaluation of how companies manage and communicate risks related to environmental, social, and governance aspects.

The project also plans to conduct impact analyses to help investors assess and optimise their investment portfolios. This includes defining strategies to optimally combine different financial instruments and hedging techniques to finance sustainable investments. The goal is to provide investors with the information and tools needed to make more informed and sustainability-oriented investment decisions.

This research stream is also dedicated to creating creditworthiness assessments that incorporate ESG factors. In addition, it aims to analyse and identify mechanisms for reporting cases of greenwashing, i.e., practices that misleadingly present a company or product as environmentally friendly. Finally, the project includes the analysis of ESG-based incentive policies for corporate executives to promote more responsible and sustainable business practices.