Sustainable and Responsible Finance

Module title	Sustainable and Responsible Finance
Module code	BEA3028
Academic year	2024/5
Credits	15
Module staff	Dr Wei Xin (Lecturer)

Duration: Term	1	2	3
Duration: Weeks		11

Number students taking module (anticipated)	60

Module description

Sustainable finance integrates environmental, social and governance (ESG) criteria into financial decisions. This module will introduce students to the latest development of theory and practice in sustainable and responsible finance. Students will develop an understanding of the principles underlying sustainable and responsible decision-making in finance, their theoretical underpinning, and the guidelines on how to apply them in business and investment practice. The module is based on evidence from rigorous academic research. The teaching is organised in the form of weekly lectures and workshops.

Module aims - intentions of the module

To introduce students, through research-led teaching, to cutting edge theory and practice in sustainable and responsible finance.
To develop a critical orientation towards the subject matter and an understanding of how the principles are applied in practice.
To enhance student employability through engaging students in the latest development in sustainable and responsible finance and their implications for business and investment practice.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

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

1. critically discuss, compare and contrast key sustainable and responsible finance theories;
2. evaluate theory-practice links between ESG and financial decisions.

ILO: Discipline-specific skills

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

3. critically evaluate sustainable and responsible finance concepts, theories and techniques.

ILO: Personal and key skills

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

4. work independently and demonstrate self-motivated inquiry within the subject area;
5. work effectively in a group;
6. present arguments related to the module content to an audience.

Syllabus plan

The syllabus list is indicative.

Responsible business and firm value
Sustainable and responsible investments (SRI)
Environmental, social and governance (ESG) and finance in practice
Climate finance and Impact investing
Board of directors and its committees
Shareholder stewardship and engagement
Shareholder protection and agency issues
Executive pay
Share repurchases
Mergers and acquisitions

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

Scheduled Learning and Teaching Activities	Guided independent study	Placement / study abroad
30	120

Details of learning activities and teaching methods

Category	Hours of study time	Description
Scheduled Learning and Teaching Activities	20	Lectures
Scheduled Learning and Teaching Activities	10	Workshops (all students in one weekly session)
Guided Independent Study	120	Reading, research, reflection; preparation for lectures, workshops and assessments

Formative assessment

Form of assessment	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Discussion of academic papers	Assigned academic papers	1-6	Oral feedback from the module lead
Presentation of the proposal (group)	5-minute oral presentation in the workshop	1-6	Oral feedback from the module lead

Summative assessment (% of credit)

Coursework	Written exams	Practical exams
20	80	0

Details of summative assessment

Form of assessment	% of credit	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Presentation of real-life cases (group)	20	20-minute oral presentation in workshop and accompanying slides	1-6	Oral feedback from the class and written feedback from the module lead
Exam	80	2 hours	1-4, 6	General feedback provided on ELE

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

Original form of assessment	Form of re-assessment	ILOs re-assessed	Timescale for re-assessment
Presentation of real-life cases (group) (20%)	Individual written report on a case (20%, max.1,200 words)	1-6	August/September Reassessment Period
Exam (80%)	Exam (80%, 2 hours)	1-4, 6	August/September Reassessment Period

Indicative learning resources - Basic reading

Basic readings:

Brealey, R.A., Myers, S.C., & Allen, F. (2019). Principles of corporate finance (13^th ed.), New York: McGraw Hill. (Note: Selected chapters. Earlier editions can be used).

Edmans, A. (2020). Grow the pie: How great companies deliver both purpose and profit. Cambridge: Cambridge University Press.

Further readings:

Readings to accompany each lecture will be posted online. Examples include:

Albuquerque, R., Koskinen, Y., Yang, S., & Zhang, C. (2020). Resiliency of environmental and social stocks: An analysis of the exogenous COVID-19 market crash, Review of Corporate Finance Studies, forthcoming.

Albuquerque, R., Koskinen, Y., & Zhang, C. (2019). Corporate social responsibility and firm risk: Theory and empirical evidence. Management Science, 65(10), 4451–69.

Benabou, R., & Tirole, J. (2010). Individual and corporate social responsibility. Economica, 77(305), 1–19.

Edmans, A. (2011). Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, 101(3), 621–40.

Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. New York Times Magazine, pp. 122-126.

Gompers, P., Ishii, J. & Metrick, A. (2003). Corporate governance and equity prices. Quarterly Journal of Economics, 118(1), 107–56.

LaPorta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1998). Law and finance. Journal of Political Economy, 106(6), 1113-1155.

Renneboog, L., Ter Horst, J., & Zhang, C. (2008). Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking & Finance, 32(9), 1723-1742.

Renneboog, L., Ter Horst, J., & Zhang, C. (2008). The price of ethics and stakeholder governance: the performance of socially responsible mutual funds. Journal of Corporate Finance, 14(3), 302-322.

Renneboog, L., Ter Horst, J., & Zhang, C. (2011). Is ethical money financially smart? Nonfinancial attributes and money flows of socially responsible investment funds. Journal of Financial Intermediation, 20(4), 562–88.

Key words search

Finance, Sustainability, Governance, ESG, CSR

Credit value	15
Module ECTS	7.5
Module pre-requisites	None
Module co-requisites	None
NQF level (module)	6
Available as distance learning?	No
Origin date	03/07/2020
Last revision date	15/03/2021