Professor Christopher Polk and Dr Greg Fischer

This course is available on the MSc in Finance (part-time). This course is not available as an outside option.

No exceptions to the availability policy will be made, and audits of FM471E are not allowed.

Students must have taken FM422E and FM423E.

This course provides a conceptual foundation in sustainable finance and impact investing along with a clear understanding of the empirical facts associated with how sustainable finance and impact investing affect firm and fund performance. Using a blend of readings, lectures, cases, and discussions, participants will learn to critically assess the actions of investors and firms with regards to sustainable finance and impact investing, including both motivation and resulting consequences.

Topics addressed will include corporate ESG (Environmental, Social, and Governance) investing, climate finance, and various impact investing topics. Participants will take away from the course a solid understanding of 1) the evolution of sustainable finance and impact investing from niche field to mainstream; 2) the variety of ways in which sustainable finance and impact investing are implemented in practice, and 3) the tools, models and frameworks behind sustainable finance and impact investing.

30 hours of seminars in the WT.

Case studies and homework assignments will help communicate and develop understanding of course concepts.

• Freeman, Ed, 1997, "Stakeholder Theory of the Modern Corporation", Business Ethics, 5th Edition, 38-48.
• Friedman, Milton, 1970, “A Friedman doctrine: The social responsibility of business is to increase its profits,” The New York Times Magazine, September 13, 1970.
• Giglio, Stefano, Bryan Kelly and Johannes Stroebel, 2021, "Climate Finance", Annual Review of Financial Economics 13, 15-36.
• Pastor, Lubos, Robert F. Stambaugh, and Lucian Taylor, 2021, “Sustainable Investing in Equilibrium,” Journal of Financial Economics 142 550-571.
• Pedersen, Shaun Fitzgibbons, and Lukasz Pomorski, 2021, “Responsible Investing: The ESG-efficient Frontier,” Journal of Financial Economics 142 572-597.

Continuous assessment (100%).