Source: University of Otago
Dr Quyen Nguyen
Otago’s Dr Quyen Nguyen’s road to an academic career in climate finance research was not a straightforward journey.
It began far from Otago, in the small town of Quang Tri in Vietnam where she grew up. Often helping her accountant mother complete spreadsheets, she found her passion for numbers.
This blossomed into an interest in finance and after getting a bachelor’s degree in 2010 at a foreign trade university in Vietnam, she decided to travel to the University of Minnesota to get her Master of Business Administration in 2015.
Dr Nguyen then spent several years working in a number of finance, risk management and business analytics roles for Intel, Pfizer and a healthcare start-up in both Vietnam and the US.
“She is a unique data scientist with amazing modelling skills and she even volunteers at the Southern Heritage Trust, helping them with their accounting needs.”
After gaining valuable work experience, she decided to complete a PhD in 2017 at the University of Otago – the quality of Business School’s teaching staff being her motivator to come to New Zealand.
It was under the guidance of her supervisors, Associate Professor Ivan Diaz-Rainey and Dr Duminda Kuruppuarachchi, that she began exploring the topic of climate finance.
“My PhD was an enjoyable journey where I feel as if I had the best supervisors who listened and supported me throughout the journey,” Dr Nguyen says.
“I also talk to my family and friends on daily basis and these long-distance calls are filled with all the love and encouragement I need to keep my passion going.”
Dr Nguyen’s PhD research resulted in several new perspectives on the topic of climate finance, including how machine learning can be used to help predict corporate carbon footprints.
Associate Professor Ivan Diaz-Rainey says she helped secure the first Marsden grant that the department has had in 15 years.
“Her PhD in climate finance generated such interest internationally and helped her secure a long-term relationship with the Australian start-up firm EMMI, as she continues to explore how machine learning can be used to forecast carbon emissions,” Dr Diaz-Rainey says.
“She is a unique data scientist with amazing modelling skills and she even volunteers at the Southern Heritage Trust, helping them with their accounting needs.”
Dr Nguyen says machine learning involves building statistical models from the training dataset which lets the machine learn the underlying patterns from the data to make predictions from these patterns.
“In climate finance, corporate carbon footprint is a popular proxy for climate transition risk,” says Miss Nguyen says.
Dr Quyen Nguyen is a member of Otago’s Climate and Energy Finance Group.
“The term measures the level of greenhouse gas emissions associated with the firm and indicates how much each firm contributes to or is liable for global warming.”
She goes on to explain that investors will use this information to figure out the likely bottom-line losses or hidden costs of a firm across different transition scenarios into the future.
This makes it an extremely important investment risk but the practice around identifying this is still in its infancy and so academics across the globe are trying to develop machine learning models that can accurately predict this.
She says developing these predictor models is a complicated process because an academic must consider every single part of a business’s supply chain process to see where it might leave a carbon footprint.
“The development of these models also has commercial value, as firms like Emmi needs prediction of corporate carbon emissions in the carbon financial risk products they offer,” Dr Nguyen says.
Dr Nguyen’s investigation resulted in the collaboration with EMMI, which provides clients with a financial perspective on carbon risk so that they can make better investment decisions.
Her PhD and collaboration with EMMI took Dr Nguyen’s research even further when she officially graduated and was able to secure a position as a postdoctoral fellow on the STRAND Marsden Fund Project which is hosted by the Climate and Energy Finance Group (CEFGroup) in Otago’s Department of Accountancy and Finance.
This grant has allowed her to continue her work in climate finance research as the principal modeller on an interdisciplinary project made up of finance, economics, surveying, geology and climate change academics, all working on the implications climate risks, like sea-level’s rising, and how this affects New Zealand.
Dr Quyen believes that it is critical to understand the impact of climate change on financial stability referencing how, in 2015, the former Head of the Bank of England, Mark Carney, described climate change as “the tragedy of the horizon” that will “impose a cost on future generations that the current generation has no direct incentive to fix”.
Though she believes that the modelling work she and her team is doing is in its infancy and has considerable challenges, with several layers of dynamic interaction between the climate system, land use, energy, the economy and the financial system, she believes that people cannot solely rely on observations or measurements of the past to characterize the climate risk of the future and that this will be an exciting and meaningful area of research.
Kōrero by Kelsey Schutte, Business School Communications Adviser
Emmi: Integrating carbon risk into investments
Predicting corporate carbon footprints for climate finance risk analyses: A machine learning approach
STRAND Marsden Fund Project
Climate and Energy Finance Group (CEFGroup)
Former Head of the Bank of England Mark Carney Speech 2015
