Fostering the Future of Green Finance: A Look Back at the Green Finance Challenge with HSBC Continental Europe

On 22 January 2025, we had the pleasure of celebrating the culmination of the 2024 Green Finance Challenge, an initiative launched by the European Chair for Sustainable Development and Climate Transition in partnership with HSBC Continental Europe. Over the past semester, 30 students from Sciences Po’s Paris School of International Affairs (PSIA) and École d’Affaires Publiques (EAP) worked in teams, mentored by HSBC Continental Europe experts, to tackle pressing challenges in sustainable finance.

Bridging Theory and Practice in Green Finance

The Green Finance Challenge was designed to provide students with hands-on experience in sustainable finance by examining real-world issues. Each group was assigned a theme and worked closely with HSBC Continental Europe mentors to produce a report on their findings. This initiative not only strengthened students’ technical knowledge but also deepened their understanding of financial sustainability, regulatory frameworks, and investment strategies.

• The first group of 10 students explored how EU regulations support SMEs in their green transition, particularly through the EU Taxonomy Regulation, the Sustainable Finance Disclosure Regulation (SFDR), the Corporate Sustainability Reporting Directive (CSRD), the EU Carbon Border Adjustment Mechanism (CBAM), and the EU Deforestation Regulation (EUDR). Their main findings indicated that, while these regulations aim to foster sustainability, they also create significant compliance challenges for SMEs due to their complexity and cost, although there are opportunities to leverage these regulations to gain a competitive advantage. For example, SMEs that treat the green transition as a business opportunity can gain significant advantages by focusing on compliance with EU regulations. These advantages include enhanced financial performance, a differentiated product offering, and a strengthened competitive position in the market.
  
  Students involved: Maria Sofia MALAVER SUAREZ, Linus MEHL, Karolina HAJKOVA, Paul THOMARÉ, Julianna PUETT, Lukasz KAZMIERCZAK, Daniel KACAROV, Lina LAUR, Vojtech OBUSKEVIC, Sabrina PFISTER

• The second group of students examined the relationship between ESG factors and financial performance within the life insurance sector, specifically investigating whether ESG funds outperform non-ESG funds. Their main findings indicated that while ESG compliance aligns with sustainability goals, it does not consistently lead to superior financial performance compared to non-ESG funds. The report also highlighted the challenges in ESG investing, such as greenwashing and lack of standardisation, emphasising the need for robust ESG frameworks, transparency, and stakeholder collaboration.
  
  Students involved: Mara CIU, Lea DAHLKE, Shashwat SEN, Hongxuan HE, Nicolas JULIAN, Marion JEANJEAN, Vick GU, Alex FERGUSON, Eduardo ROSALES MIRANDA, Tugay ÜNLÜ

• The third group of students studied the sustainability challenges of gold as an investment commodity and explored ways to reduce the environmental and social impacts of gold investments. Their report proposed three main solutions: a novel gold trading system called NextVault, a new gold trading system that would allow for the trading of tokenized, unextracted gold, significantly reducing the environmental impact by avoiding physical extraction. The second proposal focused on transition and green bonds, suggesting that these financial instruments can be used to fund the decarbonisation of gold mining operations, supporting a move towards more sustainable practices such as hydrogen smelting and renewable energy. Finally, their third proposal for a Recycled Gold ETC would see the creation of an exchange-traded commodity that is fully backed by certified recycled gold to meet the growing demand for sustainable investments and reduce the negative impacts of traditional gold mining.
  
  Students involved: Mathilda JILG, Seamas PORTER, Xavier EVANS, George LAMBERT, Henrik SCHMIDT, Elise DUBUCHE, Adrian GAO, Clara DEPALLENS, Max COCARD, Elise BARRET

The Closing Event: Celebrating Achievements & Building Connections

The closing event provided the students with the opportunity to present their research and engage in thought-provoking discussions with HSBC Continental Europe experts. Each group delivered compelling presentations, highlighting key insights and challenges within their assigned topics.

Following the student presentations, HSBC Continental Europe professionals delivered a series of insightful presentations on their sustainability initiatives and commitments to responsible finance. They shared their expertise on the evolving landscape of green finance, offering valuable insights into current industry trends. This session was a fantastic opportunity for students to bridge the gap between academic research and professional practice and learn about professional opportunities available at HSBC Continental Europe.

After an afternoon of engaging discussions, the event concluded with a networking cocktail, allowing students to connect with each other and HSBC Continental Europe professionals, exchange ideas, and discuss potential career paths in sustainable finance.

Final Reflections and Looking Ahead

This second edition of the Green Finance Challenge has once again proven to be an important platform for fostering dialogue between the world of academia and the financial sector. By working on real-world sustainability challenges, students not only expanded their expertise but also contributed meaningful insights to a rapidly evolving field.

A special thank you to HSBC Continental Europe for their excellent organisation, the mentors for their leadership and engagement, and, of course, the students for their dedication and hard work throughout the semester. We look forward to seeing how these future leaders continue to shape the landscape of green finance!

For students interested in joining next year’s challenge, stay tuned for the call for applications in the autumn!