Sustainable Finance
Summary
The Sustainable Finance course provides an overview of how climate change and sustainability concerns are reshaping financial markets, and of how financial markets can help address these challenges.
Content
This interdisciplinary course will equip students with an understanding of how climate change and broader sustainability concerns interact with financial markets.
We will start by covering foundational topics in climate science and the economics of public goods, describing the main difficulties in addressing climate change. This will include an overview of climate risk measurement, an assessment of ESG scoring methodologies and their limitations, and other challenges in the field.
Equipped with these foundational sustainability notions, we will examine the integration of climate risks into asset pricing models and how ESG preferences and risks shape the cross-section of returns. We will then move to an analysis of sustainable investing across several asset classes, particularly equity and debt. We will explore how to incorporate ESG considerations into investment decisions and their potential to influence corporate behavior. Topics covered will range from the design of green financial instruments and the financing of climate adaptation to the consequences for the financial system.
Guest speakers from various backgrounds will offer practical insights and industry perspectives (exact lineup to be confirmed).
Keywords
Public Goods Economics
Climate Risk
Corporate Disclosures
Climate-related Financial Risk
Asset Pricing
Sustainable Investing
Impact Investing
Incentive Design
Financial Regulation
Climate Policy
Insurance Markets
ESG (Environmental, Social, Governance)
Transition Finance
Learning Prerequisites
Important concepts to start the course
Students should have prior exposure to asset pricing, corporate finance, and econometrics, and be comfortable setting up and solving optimization problems. To explore practical applications of the course's core concepts, programming experience (e.g., Python, R) is recommended but not required.
Learning Outcomes
By the end of the course, the student must be able to:
- Analyze
- Apply
- Discuss
- Synthesize
- Argue
Transversal skills
- Take account of the social and human dimensions of the engineering profession.
- Demonstrate the capacity for critical thinking
- Evaluate one's own performance in the team, receive and respond appropriately to feedback.
- Communicate effectively, being understood, including across different languages and cultures.
- Access and evaluate appropriate sources of information.
- Make an oral presentation.
Teaching methods
slides
reading list
guest speakers
class discussion
Expected student activities
Group assignment with a class presentation (approx group of 4 students, depending on capacity) and evaluation.
Assessment methods
Assignments (30% of the final grade)
Written exam (70% of the final grade)
Supervision
| Office hours | No |
| Assistant.e.s | No |
| Forum | No |
In the programs
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional
- Semester: Fall
- Exam form: Written (winter session)
- Subject examined: Sustainable Finance
- Courses: 3 Hour(s) per week x 14 weeks
- Type: optional