The Massachusetts Institute of Technology Sloan Sustainability Initiative received a $750,000 grant from the William and Flora Hewlett Foundation to develop an online database assessing the carbon footprint of financial institutions.
The database would provide businesses, foundations, universities and the general public with the information about financial services firms. The ultimate goal of the project would be to drive the reallocation of capital away from carbon-intensive activities to lower-carbon assets to reduce emissions and the adverse effects on the environment due to climate change.
Jason Jay, a senior lecturer at MIT Sloan and director of the MIT Sloan Sustainability Initiative, said in a phone interview that the initiative currently has two major focuses: improving the quality of the ESG decision-making process in the financial industry and accelerating the move toward evidence-based climate-change policies. So, officials at the $9.9 billion William and Flora Hewlett Foundation, Menlo Park, Calif., approached the MIT Sloan Sustainability Initiative with an idea that combined these two goals.
"We co-developed this idea with the foundation that intersects our two streams of interest," Mr. Jay said. "It met with our respective missions and goals."
Marilyn Waite, program officer at the foundation, said in an email that the grant was given as part of the foundation's long-term goal "to help mobilize at least $1 trillion annually to support interventions that further the goals of the Paris Agreement" by 2050 through its climate finance portfolio.
"We hope that MIT Sloan's work provides a valuable information resource that any firm or institution can use to align its financial decisions with sustainability and climate-change mitigation," Ms. Waite added.
The three-year project will start with a feasibility study set to begin this summer. The second phase would be to develop a prototype, and the third and final phase would be to deploy the database to the public.