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Risk assessment from space: Integrating satellite-derived insights for ESG financial decisions

Author

Listed:
  • Morales, Adriano Barasal
  • Laurini, Márcio Poletti
  • Vrieling, Anton

Abstract

This paper explores how satellite data can be used in sustainable investment analyses by offering a granular approach that differs from conventional environmental, social and governance (ESG) scores. The paper showcases the spatial relationship between abattoir locations and deforestation in Brazil, using asset-level and land coverage data to assess the environmental risks tied to beef traders’ sourcing practices. This approach provides a tool for investors concerned with climate risks who seek alternatives to existing ESG metrics. The findings highlight the benefits of integrating satellite data to comprehensively address material risks associated with some industries.

Suggested Citation

  • Morales, Adriano Barasal & Laurini, Márcio Poletti & Vrieling, Anton, 2025. "Risk assessment from space: Integrating satellite-derived insights for ESG financial decisions," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002156
    DOI: 10.1016/j.frl.2025.106951
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    More about this item

    Keywords

    Environmental risk assessment; ESG; Asset-level data; Spatial finance; Deforestation; Remote sensing;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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