SFI Professor Sautner studies sustainable finance with a focus on climate change and biodiversity. He became interested in these topics more than a decade ago, before they were widely discussed in mainstream finance. He wanted to understand what risks climate change and biodiversity loss implied for investors who are making equity investments or providing loans.

SFI Professor Sautner—together with fellow SFI Professor Alexander F. Wagner (UZH) and two French coauthors—analyzed an international sample of more than 2'000 listed companies, assessing the relationship between a novel measure called the corporate biodiversity footprint and stock returns. They found that following the Kunming Declaration and launch of the Taskforce for Nature-related Financial Disclosures in 2021, investors started to require a risk premium—a higher expected return—when investing in companies with very negative impacts on biodiversity. These results came as a bit of a surprise since biodiversity loss had largely been seen as a concern for biologists or geographers. But investors?

The research provides scientific evidence that biodiversity loss does constitute an investment risk: markets are starting to anticipate that there will be future costs, limitations, or investor aversion for companies contributing to biodiversity loss. This is of particular interest for Swiss investors, who are at the forefront of incorporating sustainability mandates into investment decisions, as it provides justification for an approach to addressing these risks.

Evaluating Nature Risks
Given these results, SFI professors Sautner and Wagner were curious to see how companies themselves perceive these risks, in terms not only of their own biodiversity impact but also of the extent to which they themselves are dependent on ecosystem services provided by nature—which, jointly, are known as "nature risks". Based on a questionnaire, they found that about half of all surveyed companies view nature risks as financially material, with many experiencing financial consequences already because of either nature impact or nature dependence. Nonetheless, fewer than a quarter of the companies surveyed believe that investors assess how these risks affect cash flows or costs of capital. Looking forward, SFI Professor Sautner hopes that nature risks will be incorporated more widely into investment decisions just like any other risks. A key requirement for this is the availability of reliable measures of nature risks with a broad coverage of companies. To that end, SFI Professor Sautner and coauthors recently constructed firm-level measures of the dependence of companies on various ecosystem services. This extremely useful metric can be used for free by research teams and investors that are in search of a standardized assessment of nature dependence.

"If Switzerland wants to strengthen the Swiss financial sector and be a global hub for sustainable finance, it needs to have the knowledge base for informed decision-making. That is why it is so important to have premier research coming out of Switzerland on sustainable finance and to make it available to the top talent in the Swiss financial sector. Working with SFI has enabled me to leverage the impact of my research, communicating to practitioners why it is important to consider climate and biodiversity risks in investment and lending decisions."

More Information

• Do Investors Care About Biodiversity? Review of Finance 28, 2024, 1151–1186 (with A. Garel, A. Romec, and A.F. Wagner)
• Corporate Nature Risk Perceptions, Review of Finance 30, 2026, 11–42 (with S. Gjerde, A.F. Wagner, and A. Wegerich)
• Firm-Level Nature Dependence, Review of Finance 30, 2026, 231–272 (with A. Garel, A. Romec and A.F. Wagner)

SFI Prof. Zacharias Sautner (UZH)

Zacharias Sautner is Professor of Sustainable Finance at the University of Zurich and holds an SFI Senior Chair. Before joining the faculty in Zurich, he held professorships at the University of Amsterdam and the Frankfurt School of Finance and Management. He is a Director of the European Finance Association and served as a research consultant on climate finance at the European Central Bank. His work has been published in top academic journals and he serves on several financial journals' editorial boards.