Pillar 6
Impact Measurement and Valuation
SGFIN develops tools to quantify and monetise sustainability impacts across climate, biodiversity and social inclusion, enabling stronger integration into investment and policy decisions. Using frameworks such as Integrated Return on Investment (IROI), this work supports firms and financiers in assessing the true value of sustainability outcomes across sectors, from SMEs to green buildings and energy transition, while improving transparency and capital allocation toward impactful projects.
SGFIN research on impact measurement and valuation advances rigorous methods for assessing environmental and social impacts of policies and investments. It develops frameworks to quantify climate, biodiversity and ecosystem benefits, employs economic valuation techniques, and advances standardised metrics and disclosure approaches that support transparent impact assessment, better decision-making and accountability in sustainable finance and policy contexts.
Creating a Common Language for Impact Assessment
Benefits of Energy Conservation Campaigns
Agarwal, S., Sing, T.F., & Sultana, M. (2022). Public media campaign and energy conservation: A natural experiment in Singapore. Energy Economics, 2022, 114 (106281), , https://doi.org/10.1016/j.eneco.2022.106281
Singapore uses public media campaigns to motivate public housing residents to conserve energy as part of its strategies to achieve sustainable energy goals. In this research, we aim to identify if these campaigns actually work in practice. Using the energy conservation campaign conducted in Singapore in January 2016, we found that in areas with the campaigns, people living in public housing used about 0.4% less electricity compared to those in places without the campaigns. We also discovered that this saving effect was not a one-time occurrence but has persisted even after the campaign. When we calculated its value in currency, we found that this program brought about S$350,000 in benefits for the people.
Water Conservation Policies: Pumbling Upgrades & Nudging
Agarwal, S., Araral, E., Fan, M., Yu, Q., & Zheng, H. (2022). Water conservation through plumbing and nudging. Nature Human Behaviour, 6, 858–867, https://doi.org/10.1038/s41562-022-01320-y
In this paper, we explore the effectiveness of two approaches in addressing urban water challenges: “plumbing upgrades” and “nudging.” Utilizing data from 1.5 million accounts in Singapore over ten years, we discovered that a nationwide Home Improvement Programme, designed to enhance plumbing efficiency, reduces residential water use by 3.5%. Moreover, upgrading plumbing enhances the effectiveness of other water-saving initiatives and proves beneficial during extreme weather conditions. While the cost savings on utility bills from plumbing upgrades may not be substantial, the rise in home values justifies the investment. However, a large-scale nudging program that encourages water conservation through peer comparison did not show clear evidence of reduced water use.
The Value of Corporate Social Responsibility: Decomposing Positive and Negative Deviations from the Norm
Zhang, W., & Zhang, H. (2019). The value of corporate social responsibility: decomposing positive and negative deviations from the norm. Nomura Journal of Asian Capital Markets, 4(1), 26-31. https://www.nomurafoundation.or.jp/en/wordpress/wp-content/uploads/2019/09/NJACM4-1AU19-06.pdf
Environmental Regulations & Housing Markets
Agarwal, S., Deng, Y., & Li, T. (2019). Environmental regulation as a double-edged sword for housing markets: Evidence from the NOx budget trading program. Journal of Environmental Economics and Management, 96, 286-309. https://doi.org/10.1016/j.jeem.2019.06.006
In this paper, we investigate the impact of the NOx Budget Trading Program (NBP), a cap-and-trade system, on housing markets. Our analysis reveals that the effect of the NBP on housing prices in participating states varies, growing in low-manufacturing-intensity regions and decreasing in high-manufacturing-intensity regions. We propose two channels—health and labor-market channels—to explain this phenomenon. Specifically, for the labor-market channels, we suggest that the NBP discourages manufacturers from employing labor due to increased production costs, resulting in reduced housing demand and a decline in housing prices in high-manufacturing-intensity areas. Additionally, we found that in high-manufacturing-intensity areas, loan application volume declined, rejection rates increased, and the probability of loan default rose, contributing to the overall decrease in the housing market of those areas.
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