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Sustainable Finance

Module description

This module builds upon your knowledge of corporate finance [developed in MBAM944/MBAM945].  You will explore in detail the realities of pursuing sustainable financial solutions and balancing conflicting investor agendas. 

Sustainability:  The “Beyond Fantasy Investment Game” allows you to choose, analyse and follow the performance of a single company to see if you can balance sustainability issues whilst achieving superior returns.

Internationalisation:    As corporation’s operations become ever more global, you are encouraged to explore the sustainability conflicts that arise within multi-national companies.  How these conflicts can be balanced whilst still achieving financial returns.  By choosing your own case study companies you can explore sectors and topics that are directly relevant to your life.

External Engagement:    Guest speakers have previously explored the topics of stranded assets and making sustainable profit in a finite and resource constrained world; particularly securing investment returns under carbon and water constraints.

Employability:     Many of you will work for smaller enterprises or establish your own business on completing your studies. The module considers the practical issues of funding and structuring smaller enterprises in a sustainable way. 

Ethics and Corporate Responsibility: the module allows you to explore sustainable finance in a real world context by asking you to undertake independent research into chosen companies and reconcile their financial performance with their declared ethical policies from a variety of stakeholder perspectives.

Research in Teaching:  The module builds on models, frameworks and theories in the field of Sustainable Finance.

Module aims - intentions of the module

This module builds on your knowledge of management, risk and return and sustainability.  It will focus on the frameworks, theories and practice of sustainable finance and investment and tools which you should be aware of and prepared to adapt and deploy in your roles as investors, business managers and other stakeholders.  It will prepare you to understand the connections between sustainability and capital markets and the opportunities to positively influence the path towards a low carbon, low water, climate resilient and inclusive economy.    

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. appraise contemporary issues and trends in sustainable finance.
• 2. appraise the implications of sustainability for financial tools and techniques and investment opportunities.
• 3. explain how ESG factors can be incorporated in investment decisions.
• 4. identify the challenges of implementing new financial initiatives.
• 5. apply financial tools and techniques explicitly in a green, cleantech and ethical context.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 6. apply appropriate theoretical principles to analyse complex financial problems or alternatives.
• 7. critically evaluate emerging financial tools and instruments.

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 8. analyse and appraise alternatives and make decisions based on evidence.
• 9. demonstrate effective written communication skills, particularly in explaining and justifying choices.
• 10. demonstrate effective debating and presentation skills.
• 11. demonstrate effective skills in independent private study.

Syllabus plan

Introduction to sustainable investment: the data and the market place.

• Dynamics of SI policies and examples from emerging economies.
• ESG integration.
• The role and challenges of sustainability indices: frameworks and principles in sustainable investment (including the UN PRI and Equator Principles for Project Finance); how sustainable investing has evolved; the drivers and indices (e.g. DJSI and FTSE RI). 
• Constructing a sustainable portfolio.
• Evaluating the research evidence on firms with a CSR agenda.
• The rise of new capital markets and project finance options: renewable energy, green property, forestry (REDD+) and carbon markets. 
• Growth prospects in emerging markets and the future of SI.
• Case studies on SI in private equity.
• Critiques of sustainable investment: failures, lessons and where to from here. 
• Frameworks and toolkits for SI and ESG integration.
• Microfinance and microinsurance: the role of small loans for small business; components of the microfinance ecosystem; gender, impact and alternatives; rates of return and cost of capital; management challenges of MFI. 

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

Krosinsky C and N Robins (2008) Sustainable Investing: The Art of Long Term Performance. London: Earthscan.

Resources will include an array of online and research materials, including a mix of existing theoretical and practitioner frameworks currently in use, including materials from asset owners, asset managers, stock exchanges, international organisations (EITI, CDP, investor initiatives (PRI, ATMI) and the financial sector (EP, PADI).

Key words search

Finance, Risk and Return