Karl Schmedders
Boards have signed up to net zero commitments and ESG language without testing the economics underneath. The gap between stated climate ambition and actual capital allocation keeps widening. When investors or regulators ask which parts of the plan survive a discounted cash flow, most organisations cannot answer.
Karl Schmedders, Professor of Finance at IMD, helps boards and senior teams test their climate, ESG, and capital allocation choices against the actual economics of the transition.
Full Profile
Why organisations work with Karl Schmedders
- He brings a computational finance lens to ESG, climate risk, and carbon pricing, so a net zero plan gets tested the way a capital project would be.
- On the just transition he argues the social and governance sides of ESG need as much attention as the environmental one, which gives executive teams a defensible position on the part of ESG usually left to communications.
- He directs IMD’s Strategic Finance program and has taught finance and decision science to senior executives since 1998, winning best-teacher awards in the Kellogg, Kellogg-WHU, Kellogg-HKUST, Kellogg-Recanati, and Rochester-Bern Executive MBA programmes.
- His work on computational economics, general equilibrium, and asset pricing has been published in Econometrica, the Journal of Finance, and the Review of Financial Studies. He is a Fellow of the Game Theory Society and an SAET Economic Theory Fellow.
- He sits on the boards of LPX Group and SYLVA AG, and has worked with ABB, Airbus, Evonik, Julius Bär, Maybank, and Orkla.
Biography highlights
- Professor of Finance at IMD; Director of the Strategic Finance program.
- PhD in Operations Research, Stanford University; Walter J. Gores Award for teaching at Stanford, plus best-teacher awards in the Kellogg, Kellogg-WHU, Kellogg-HKUST, Kellogg-Recanati, and Rochester-Bern Executive MBA programmes.
- Eighteen years at Kellogg School of Management, Northwestern University, where he earned tenure and was named L.G. Lavengood Professor of the Year, followed by Professor of Quantitative Business Administration at the University of Zurich.
- Published in Econometrica, Journal of Finance, Review of Financial Studies, Review of Economic Studies, Journal of Financial Economics, and Management Science; co-editor, Handbook of Computational Economics (Elsevier).
- Board member, LPX Group and SYLVA AG; Advisory Council member, Reward Value; Fellow of the Game Theory Society; corporate work with ABB, Airbus, Evonik, Julius Bär, Maybank, and Orkla.
- Regular columnist on ESG and climate finance in I by IMD.
Biography
ESG has spent a decade as a marketing layer over corporate strategy. Karl Schmedders treats it as a finance problem. He starts from the externality, then asks whether the company’s capital allocation reflects the climate position it has publicly committed to. The answer is arithmetic, and it is often at odds with the annual report.
He came to that position through operations research. A PhD at Stanford, where he won the university-wide Walter J. Gores Award for teaching, then eighteen years at Kellogg School of Management, where he earned tenure and was named L.G. Lavengood Professor of the Year in 2002. He was Professor of Quantitative Business Administration at the University of Zurich from 2008 before joining IMD in 2019, and still teaches on the Kellogg and Rochester-Bern Executive MBA programmes.
At IMD he directs the Strategic Finance program and teaches across the Executive MBA portfolio, covering capital allocation, decision-making under uncertainty, AI and data science for business, and the economics of the energy transition. He has worked with ABB, Airbus, Evonik, Julius Bär, Maybank, and Orkla, and sits on the boards of LPX Group and SYLVA AG. His writing in I by IMD argues that carbon taxes are still too low to price the “mother of all externalities,” that climate financial risk is being understated on corporate balance sheets, and that companies are quietly admitting their net zero promises were unrealistic.
His sharpest public argument concerns the social side of the transition. Ignoring the cost borne by lower income households and developing economies, he argues, is how the political consensus on climate breaks. The same machinery sits underneath his academic work on computational economics, general equilibrium, and asset pricing, published in Econometrica, the Review of Economic Studies, and the Journal of Finance.
Key speaking topics
- Capital allocation and the cost of capital
- Decision-making under uncertainty
- Climate financial risk
- Carbon pricing and the economics of net zero
- ESG strategy and sustainability reporting
- Just transition and the social side of climate policy
- Strategic finance for non-finance executives
- Sustainable investing and stranded assets
Ideal for
- Boards and CFO offices stress testing climate commitments against capital allocation
- Investment committees, asset owners, and asset managers reviewing ESG and sustainable investing strategies
- CSOs and Heads of Sustainability who need a finance-grounded counterpart to the consulting view
- Executive education audiences in Strategic Finance, EMBA, and senior leadership programmes
Audience outcomes
- Where their net zero plan holds up under financial scrutiny, and where it does not.
- Language for separating ESG substance from ESG narrative when investors and regulators ask.
- How carbon pricing, stranded assets, and climate risk feed into corporate valuation.
- An economist’s case for the just transition that holds up in front of a sceptical board.
- Sharper questions for the next investment committee or strategy meeting.