Dr Danielle Kent is challenging Australia’s biggest institutions to invest their money with optimism. A finance expert with a background in neuroscience, humanitarian programs and government policy, Dr Kent knows the power of positive, targeted action and investment firsthand. Now she’s on a mission to speed up action on climate change by showing captains of industry that investing in green initiatives is investing in their bottom line.
Now working in the emerging field of behavioural finance, Dr Kent’s research uses a mixture of psychology and economic theory to help industry and policymakers find ways to strengthen the economy.
“Executive boards are very interested in efficiency but often hesitant to support sustainability initiatives. Reducing CO2 emissions isn’t considered part of their business’ core remit,” says Dr Kent, Sydney Horizon Fellow in the University of Sydney Business School and member of the Net Zero Institute.
“My research shows that customers actually want big institutions to take the lead on sustainability, and that green initiatives can result in both a significant return on investment for these companies, and customers rewarding these companies with their business.
“Now we’re exploring how boards can become more receptive to these ideas.”
Connecting with community
For Dr Kent, this is more than just an academic exercise. It’s the result of a life-long interest in how big decisions impact individuals and how they can be used to build a fairer society.
“I grew up in a small town in regional NSW where the local economy depended on good harvests and where there was an acute awareness that the decisions made in ivory towers and glass boardrooms could shutter our industries and hit families in small towns, like my own, really hard.
“Now the challenge is bigger than interest rates and tariffs affecting farm profits. Those things haven’t gone away, but farmers are also contending with climate change-fuelled natural disasters. How will they be able to feed themselves, or us, if their crops are washed away or burned down?
“Thinking about what kind of world my child will inherit made me realise taking action guarantees a better future for us and our children, more opportunity, and a better quality of life. It’s not just possible; it’s within reach if we choose to act.”
Thinking about what kind of world my child will inherit made me realise taking action guarantees a better future for us and our children, more opportunity, and a better quality of life. It’s not just possible; it’s within reach if we choose to act.
Dr Danielle Kent
Sydney Horizon Fellow
A solutions focus
This passion for helping individuals through affecting change at large scales has led Dr Kent on an interesting academic path, from implementing multimillion-dollar literacy programs in Papua New Guinea for the World Bank, through to working for the NSW Department of Premier and Cabinet on public policy to improve outcomes for citizens.
“I haven’t always had a policy focus, but I have always been interested in the effect institutions have on people. Since starting my PhD at the University of Sydney and working in academia, these experiences have really shaped my research.”
Dr Kent now works with the Net Zero Institute, using her finance background to support sustainable, economically viable development and policy.
“I actually started my career with a Bachelor of Science here at Sydney, so I understand the need for technology-based climate solutions like renewables or batteries,” says Dr Kent.
“I think it’s also important that we’re not just focusing on the technology needed to address the climate crisis, but also the policies and funding structures that will successfully bring these technologies to market. We need to direct these solutions to where they can have the biggest positive impact on vulnerable communities.
“Subsidies for rooftop solar panels have been a great example of this in action.”
Asking ‘is that true?’
In a recent project on ‘green’ investments, Dr Kent found that experienced investment professionals weren’t as objective as they often like to think.
“In our experiments, we tested positive investment communication that contrasted the short-term costs of change, like investing in solar, compared to the lasting benefits and increasing worth of assets with low carbon emissions.”
Rather than framing solar panels as a green initiative, they could be presented as a way to reduce the cost of running a warehouse while making that building more valuable to prospective buyers if the business outgrew the location and needed to sell.
“What was really unexpected was that this positive approach worked even on experienced investment professionals who had 20-years’ experience. It was generally thought that these seasoned, highly analytical investors couldn’t be influenced in this way.”
Another study, yet to be published, looked at customers’ attitudes to institutional spending on net zero initiatives. Using her expertise in behavioural finance, and her firsthand experience living in regional communities, Dr Kent pushed for the study to look more closely at the attitudes of people in regional Australia, challenging assumptions that they were less accepting of green policies.
“Asking simple questions like that means policy and products can better reflect the real needs of markets, meaning customers get what they actually need rather than relying on outdated assumptions about what they want. It’s a win-win for consumers and industry.”
Optimising for growth
“Behavioural economics is really about recognising that people are the foundation of our economic systems. People buy goods and services not just because we need to survive, but because we have desires and preferences.”
When it comes to climate change, it’s not just about upfront cost. The fact that rooftop solar has been so popular in Australia highlights the power of optimistic long-term thinking, whether that be for reducing carbon emissions or just to reduce electricity bills.
“At the end of the day, my research looks at how investing in people’s futures generates returns that benefit everyone. A rising tide lifts all ships.”
Dr Danielle Kent is a Sydney Horizon Fellow in the University of Sydney Business School. Sydney Horizon Fellowships empower the world's best and brightest emerging academics to undertake innovative research that will contribute to the common good by addressing the complex challenges of climate change, health and sustainability.
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