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In a climate-change world, how do investors deal with carbon risk? It’s an important question because carbon risk considerations are changing the way investment decisions are made and how businesses attract capital.

Smith PhD candidate Neal Willcott is investigating. “Until recently, carbon risk wasn’t even priced into most stocks, so the chances are that we could still be living in a bit of a carbon bubble.” In the years ahead, he says, investment strategies will change as investors incorporate carbon risk into their strategies. “This means businesses will have to adapt because investors are a key source of capital for them.”

Neal was immediately impressed by the research culture at Smith when he arrived last year to focus on sustainable finance research. “You have so many top people in their fields,” he says. “Everyone wants to help you succeed.” Neal is especially thrilled to learn from some of the best sustainable finance researchers anywhere, including his supervisor, Professor Sean Cleary. He hopes the work he and others are doing eventually helps advise policymakers on climate change.

Smith researchers are known for their expertise worldwide.

Research impact

The research undertaken at Smith covers important areas of business today, including analytics, artificial intelligence, social impact, entrepreneurship, leadership, digital innovation, resilience and accounting. Business ethics, corporate governance, finance, management information systems, marketing, operations management, organizational behaviour and strategy are also key areas.

The work being done at Smith has lessons for organizations, too. For instance, recent research by Jean-Baptiste Litrico, associate professor of strategy and organization, examined whether non-profits can pursue both social gains and business revenue without sacrificing their mission. The answer: Yes. Indeed, non-profits that developed commercial activities were able to successfully integrate them into their social goals.

Another example: Pam Murphy, associate professor of accounting, has done extensive research into workplace fraud. Recently, though, she looked at how companies can keep employees honest. “It's often easier and cheaper to try to keep people honest than try to catch dishonesty,” she says.

Grants and recognition

Smith researchers are known for their expertise worldwide. During the 2018-2019 year, 44 articles by faculty were published in academic journals, including 14 in the Financial Times’ 50 top-tier journals. Faculty also received a combined total of $758,595 in research grants, including those from the Social Sciences and Humanities Research Council and the Natural Sciences and Engineering Research Council of Canada.

A number of faculty also received accolades. For example, Tina Dacin, professor of organizational behaviour, received the Best Symposium Award from the Organization and Management Theory division of the Academy of Management. Accounting professor Steven Salterio received the Lifetime Notable Contribution Award in the American Accounting Association's Behavior and Organizations Section.

In March, Associate Professor Ryan Riordan received the Bank of Canada Governor’s Award. The research grant goes to academics who study areas that the bank deems important. He is using the grant to further his research in climate change and the use and misuse of technologies in banking and financial markets. “This award,” he says, “is confirmation that our research is important to the overall economy.”