2025 Moskowitz Prize awarded to research on blended finance for sustainability projects
From a field of 101 submissions, Blended Finance has been named winner of the 2025 Moskowitz Prize at Northwestern University, and Coordinated Engagements is the sole Honorable Mention. The award goes to the authors of high-quality, applicable research in sustainable finance.
This year’s winning researchers are Caroline Flammer (Columbia University), Thomas Giroux (ETH Zürich), and Geoffrey Heal (Columbia Business School). The authors of the Honorable Mention paper are Elroy Dimson and Oğuzhan Karakaş, both from the Cambridge Judge Business School, along with Xi Li from the London School of Economics. The latter team also won the 2012 Moskowitz Prize for their paper on Active Ownership.
The Moskowitz Prize, awarded annually, celebrates its 30th year this year and continues its leadership role in recognizing highly rigorous research with strong potential impact on sustainability-related business and investment practices. This year’s field of candidate papers was sufficiently strong that the judges named a winner and one Honorable Mention.
On this major milestone for the Moskowitz Prize, Lloyd Kurtz, founder of the Prize and one of the judges, offers these words of commemoration:
“This year marks the 30th anniversary of the Moskowitz Prize. During our discussions about the inaugural prize in 1996, the late Milton Moskowitz — an early and highly innovative investigator in sustainable finance—agreed to let us use his name on two conditions: that we honor only first-rate work, and that we buy him lunch every year to let him know how the Prize is going. By the time Milt passed in 2019, he was delighted to have had 24 lunches at our expense!
“Having kept our second promise to him, we remain bound by the first. The task of identifying excellent, high-impact work in sustainable finance has grown more challenging over the years, as both the volume and quality of research have increased. Thanks to our outstanding judges, sponsors, and the support of Northwestern colleagues, we’re fortunate to be able to continue our journey.
“We’ll always strive to highlight work that meets high academic standards, matters (or should matter) to investment professionals, and points the way to positive change. We offer our deepest gratitude to all who have contributed to the success of the program over the years, and thanks again to those supporting us as we move forward.”
Blended finance investment in sustainability projects
The researchers behind the winning paper seek to understand the decision-making dynamics of blended-finance deals—those offered by development finance institutions (DFIs) like the International Finance Corporation (IFC) to attract private capital to sustainability projects by improving their-risk-return profiles. Projects related to renewable energy, climate-tech, and others are typically funded by public funds and private philanthropy, leaving a significant gap. Blended-finance deals help close those gaps by subsidizing and de-risking private capital.
Specifically, DFIs apply concessional mechanisms such as below-market interest rates and risk-mitigation components to prospective blended-finance deals. To understand which types of deals DFIs are more likely to allocate their limited resources to, the authors developed a framework for associated tradeoffs among concessionality (below-market rate subsidization), expected societal impact, and potential risk. They hypothesized that DFIs would provide more concessionality to projects predicted to have higher sustainability impact and to those with higher risk such as political risk in the project’s target country. In short, concessionality would be linked to higher projected impact and risk.
To test that, they analyzed the concessionality of 173 recent IFC blended-finance deals in industrial and finance sectors over the time period from 2018 to 2023. Roughly half of the projects were based in Africa, with the rest in Asia and the Pacific, the Middle East, Eastern Europe, and Latin America and the Caribbean.
Results confirmed the researchers’ hypothesis: concessionality was associated with projects with larger anticipated impact and higher perceived risk. For example, a one-standard-deviation increase in expected sustainability impact corresponds to a 1.9–2.3-percentage-point higher blending subsidy. The findings suggest DFIs use perceptions of impact and risk to make blended-finance decisions, with implications for how to wield this valuable tool effectively to support global sustainability efforts and drive meaningful change.
“I was impressed by how this paper opens the black box of catalytic capital with unique deal-level concessionality data, showing how perceived impact and country risk shape the structure and scale of blended finance,” says Moskowitz judge Hao Liang. “Its careful empirical design and transparent robustness work make the findings both credible and policy-actionable for a credible transition in emerging markets—while ex-post impact measurement remains a clear and fixable next step.”
Kurtz says, “This paper represents an important step forward, providing both a useful decision framework and empirical evidence on the current state of practice. Impact investing often depends on mixed pools of capital, sourced from governments, NGOs, and private capital. The authors focus on development finance institutions, which are particularly important because they can offer capital on attractive terms when potential impact is judged to be significant. Investors and policymakers need to understand these dynamics so that projects can be structured to make the most efficient use of available resources and deliver the greatest possible impact for the capital deployed. The paper’s insights may also be useful as investors consider how to respond to ongoing changes in the global policy environment.”
The study’s authors say, “Our findings suggest that blended finance—when carefully designed—can serve as catalyst and meaningfully expand investment in high-impact projects that would otherwise struggle to attract private capital. By showing how concessionality is targeted toward projects with strong sustainability potential and to countries facing greater risk and information frictions, this research highlights a potential path for scaling climate, biodiversity, renewable energy, and social inclusion-focused investments. In essence, blended finance can help turn promising solutions into investable ones, accelerating progress toward global sustainability goals.”
“We are deeply honored to receive the prestigious Moskowitz Prize,” they continue. “This recognition affirms the importance of understanding how public and philanthropic capital can effectively help mobilize private investment toward sustainable development, especially in low-income countries where capital is most needed. It is tremendously encouraging to see blended finance being recognized as critical for the sustainable finance research agenda.”
The leadership structure of coordinated E&S engagements
The authors of the Honorable Mention study explore an important question: How does the leadership structure of an investor coalition influence their success in efforts focused on the environmental and social (E&S) responsibility of an investee company?
Answering this has become increasingly important due to the growth in focus on E&S issues and concomitant pressure on businesses from institutional shareholders. Yet little is known about how such engagements’ structures affect both their success driving E&S change and the financial performance of investors and investees.
To shed light on these dynamics, the authors studied coordinated, intra- and inter-country E&S engagements and outcomes — specifically, a sample of 31 projects coordinated through the UN-supported Principles of Responsible Investment network and targeting 960 publicly listed firms between 2007 and 2015. They hypothesized that E&S-focused coalitions with leaders that signal their commitment to the effort — through devotion of significant resources — and hold reputational and informational (location in same country as target firm) assets will be more successful with influence than engagements without leaders.
That is, indeed, what they found. Overall, 52.7% of all E&S engagements were successful, but those with a clear leader were 23-31% more likely to succeed in effecting change. Moreover, coalitions with committed leaders displaying informational advantage and reputational credibility were more likely to find success. Investor and target firms were shown to experience post-engagement financial benefits of such leadership as well: investors enjoyed increased fund flows and target firms had an average increase in abnormal buy-and-hold stock returns of 4.7%, among other indicators.
The findings suggest that coordinated E&S engagements achieve their objectives and contribute to shareholder value, and that clear coalition leadership enhances the chances and impact of success.
Kurtz says, “This study is the culmination of over a decade of research on the efficacy of shareholder engagement. Of the two broad approaches responsible investors might take—engagement or divestment—only engagement offers the prospect of direct impact. But engagements are costly, and often fail. It is crucial to identify the factors associated with success, so that investors can allocate capital to the opportunities mostly likely to yield positive results. The authors demonstrate that choosing the right partners and following a structured process greatly enhance the probability of success, and document that successful engagements are associated with better financial outcomes.”
Fellow Moskowitz judge Dave Chen says, “This paper provides activist fund managers with both the data and a usable framework for effective shareholder engagement, including indications on who among the shareholder class should lead and the criteria to increase the likelihood of a successful campaign.”
Study author Dimson says, “Companies listen to their shareholders. Our evidence shows that when a firm’s owners speak with one voice, their impact is elevated.” Co-author Li says, “Our rigorous research has confirmed the benefit of PRI engagements, not in just one country but all over the world.” Co-author Karakaş says, “Our research has been cited extensively. The impact of our work has now been boosted by twice being recognized by the Moskowitz Prize.”
The researchers collectively say, “Our study documents favorable environmental and social impact from corporate engagements. From a fiduciary point of view, we show that coordinated engagements are financially advantageous to stockholders. Engagement does not undermine share price performance; on the contrary, it improves investment returns.”
They also describe the value of the Moskowitz Prize: “The award provides highly visible recognition of our research by esteemed academic peers and eminent practitioners. In addition, we are grouped alongside an impressive cohort of researchers who, over the last three decades, have made substantial contributions to responsible investing. Finally, we could not have completed this research without the involvement of the Principles for Responsible Investment, and we thank PRI as our important data provider.”
Learn more about the award-winning studies
Moskowitz Winner Research Brief: Blended Finance
Moskowitz Honorable Mention Research Brief: Coordinated Engagements
Support for the Moskowitz Prize
The relevance of the Moskowitz Prize to the business domain is reflected in the financial institutions that sponsor the prize, led by Premier Sponsor Bailard, as well as Trillium Asset Management and Boston Common Asset Management. All are global leaders in sustainable finance practices, and their support for the Moskowitz Prize incentivizes and motivates the critical academic research helping to shape this field.
More about the Moskowitz Prize at Northwestern University
The Moskowitz Prize is named for Milton Moskowitz (1932-2019), one of the field’s first and most innovative investigators, whose pioneering legacy continues through the Moskowitz Prize. Moskowitz rose to prominence through his ‘100 Best Companies to Work For’ lists, one of the most influential early incentives for responsible corporate governance, and an early examination of the relationship between responsible practices and financial returns.
In 2020 the Moskowitz Prize became an initiative of Northwestern University’s Kellogg School of Management. First presented in 1996 by the U.S. Social Investment Forum, the Prize was founded by Lloyd Kurtz, currently Senior Portfolio Manager at Montecito Bank and Trust and a Visiting Scholar at Kellogg. The Moskowitz Prize was awarded by UC Berkeley's Haas School of Business from 2005-2019.
Judging for the Moskowitz Prize is completed by a panel of some of the world’s most accomplished sustainable finance researchers and practitioners. In 2025, the panel comprised seventeen judges from universities and financial firms from all over the world, including the Kellogg School at Northwestern University.
Learn more about the Moskowitz Prize or sign up to receive future Moskowitz Prize announcements.
More about Northwestern University’s Kellogg School of Management
The Kellogg School of Management is a global business school with a vibrant community of faculty, staff, students and alumni who shape the practice of business and organizations around the world. Kellogg brings a blend of theory and practice to its rigorous academic experience, creating a dynamic research and learning environment. Kellogg’s purpose is to educate, equip and inspire brave leaders who build strong organizations and wisely leverage the power of markets to create lasting value.
Media Contact:
Tania O’Connor
Senior Program Manager of Social Impact and Sustainability
Kellogg School of Management