What was your main reason for choosing the MAS in Sustainable Finance?

I chose to attend the MAS in Sustainable Finance because the combination of finance, with its emphasis on economic principles and figures, and sustainability, with a touch of idealism, has always fascinated me. As we have seen in recent years, the concept of sustainable finance and its application sometimes exhibit flaws. But that’s what makes it so interesting for me. It has ultimately sparked my motivation to enrol in a program that allows me to gain an in-depth understanding of sustainable finance and use the skills acquired in my professional role.

What inspired you to choose this topic for your thesis?

In the courses "Sustainable Development and Impact” and "Sustainable Investing" at the University of Zurich, we learned about the aforementioned SDG financing gap and the immense amount of USD 4 trillion annually that is lacking to cover essential needs, especially in developing countries. This stands in complete contrast to the myriads of “sustainable” investment opportunities that have been issued during the last decade and have attracted trillions of USD. That divergence of capital flows was a puzzle to me, and I wanted to learn more about it and determine if there are ways to address it.

What methodologies did you use and what were the findings?

I evaluated whether investing in SDG financing gap-relevant investment funds yields improved risk-return ratios in diversified portfolios. This analysis was based on 40 constructed portfolios covering monthly fund returns from 2019 – 2023 and applying two distinct weighting methodologies. My findings suggest that adding a 5% share of selected impact funds to well-diversified portfolios increases the Sharpe ratio for half of the constructed portfolios. Especially, microfinance and small and medium-sized (SME) finance funds have proven to be well-functioning portfolio diversifiers, as they have reduced standard deviation in most portfolios. This indicates that the addition of investments relevant to the SDG financing gap could benefit risk-adjusted returns at the portfolio level, enticing both impact-oriented and traditional investors.

What is the conclusion and practical application of your thesis?

The conclusion of my thesis is that impact investing, specifically in SDG financing gap-relevant investment funds, can potentially play a significant role in bridging the underfunding of the Global Goals. By adding a minor share of selected impact funds to diversified portfolios, investors could not only achieve beneficial risk-adjusted returns but also contribute to the realization of the SDGs. However, it's important to note that high SDG ratings do not always guarantee impactful conduct. Therefore, investors need to exercise due diligence and consider multiple factors when making investment decisions. Overall, my thesis underscores the potential of impact investing as a tool for achieving both financial returns and sustainable development objectives.

What were challenges you faced during your thesis writing?

To stay focused on the narrowly defined topic and not get lost by covering too many other exciting aspects around the core part. I needed to maintain the perseverance required when it felt like it would never end. On top of that, before I started working on my thesis, my wife and I became proud parents of a son. This new setting proved challenging in many ways and resulted in a number of short nights. Thanks to the crucial support of my wife, Nora, who took care of so many other tasks during that period, I was able to dedicate the countless hours needed to bring everything on paper.

Looking back, how has this program shaped your understanding and your perspective of sustainable finance?

The MAS in Sustainable Finance has significantly shaped my understanding and perspective of sustainable finance. Its strong practical orientation allowed me to immediately benefit from some courses and apply what I learned in my professional activities. Above all, I was able to acquire the necessary knowledge to critically assess sustainability in the financial sector. The exchange with classmates from various companies and industries was also invaluable, enriching my learning experience during the almost three years of the program.

Thank you very much, Philipp Bamert!

Interested in learning more about Philipp Bamert's thesis? Read the Executive Summary. Further information about the MAS in Sustainable Finance can be found here.)