While some evidence suggested they might, other factors – such as investor pressure – may also play a role, according to an analysis by Pincha Rutchatawuttipong, Jinghan Chen, Alexander Genoe and Stella Kotzabasakis, members MIT Sloan School of Management’s class of 2025.

They’re also alumni of the school’s Finance Lab, which aims to bridge the gap between theory and practice by engaging students with leading practitioners to solve complex financial challenges.

The findings and the analysis that produced them mark 10 years of teamwork between MSCI and the MIT Sloan Finance Lab, or Fin-Lab, as the graduate-level course is known. Projects in recent years have examined questions ranging from the challenges of reducing the emissions of investments while investing energy sector to the relationship between sustainability strategies and risk-adjusted returns.

The collaboration benefits both students and practitioners, according to Xinxin Wang, a fellow at the MSCI Sustainability Institute and a leader in ESG and climate research for the Americas. “We think we know everything about a topic, and then a student brings a fresh perspective, uncovering insights we hadn’t considered,” says Wang. “There are always pleasant surprises.”

Fin-Lab students and MSCI researchers gather following the students’ final presentation. (Left to right, Alexander Schober of MSCI ESG Research; Alexander Genoe, Stella Kotzabasakis, and Pincha Rutchatawuttipong of MIT Fin-Lab; Xinxin Wang of MSCI ESG Research; Jinghan Chen of MIT Fin-Lab; and Chris Cote of MSCI ESG Research).

Gita Rao, a senior lecturer in finance and associate faculty director of MIT Sloan’s Master of Finance program, echoes this sentiment. “Our collaboration with MSCI connects the classroom to the real world, surfacing insights that bridge the gap between financial theory and practice,” she says.

The team of Fin-Lab students that examined low-carbon strategies in the energy and utilities sectors presented its findings to researchers at MSCI in Boston and their colleagues who joined remotely from offices around the world. The students described the experience as both challenging and rewarding. “It was an immersive, fast-paced introduction to the intriguing field of climate and ESG analytics,” Rutchatawuttipong reflected in a LinkedIn post. “This incredible experience served as a solid foundation for future endeavors in the area.”

The collaboration between MSCI and MIT Fin-Lab serves as model for the Institute’s Climate Scholars Program, which brings master’s-level students from universities in Switzerland and Singapore with researchers at MSCI’s Climate Risk Center to examine emerging topics in the field of climate finance.

The partnership between MSCI and the Fin-Lab meanwhile, has entered its second decade, with the latest cohort of students examining whether data from MSCI’s Climate Target and Commitments dataset, which evaluates a company’s climate commitments based on their comprehensiveness, ambition and feasibility, can serve as a meaningful tool for investors who are analyzing corporate bonds. The research explores the potential relationship between the cost of financing and a company’s progress toward its climate targets, with the goal of surfacing actionable signals for investors and insights for policymakers who aim to develop effective climate policies.

Wang emphasizes the mutual rewards of the partnership. “When we share these ideas, it generates ripple effects,” she says. “You drop a pebble in the water, and you see the ripples.”

See highlights from the collaboration between MSCI and the MIT Sloan Fin-Lab here.