Derived from
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21210454 Sustainable finance and ESG investing in Environmental Economics, labour and sustainable development LM-56 MORRESI OTTORINO
(syllabus)
- Finance as usual (shareholder value theory): traditional tools to analyze stocks, bonds, and their portfolios ➡️Basics of fundamental analysis of stocks and estimating their financial value ➡️Basics of bond and credit risk analysis ➡️Basics of portfolio performance and risk analysis - From shareholder value to sustainable finance: theory, approaches, and ongoing debate ➡️Finance as usual and Milton Friedman ➡️Enlightened shareholder value ➡️Stakeholder value (Triple Bottom Line) ➡️Pieconomics and common good value: Principles of materiality, comparative advantage, and multiplication - Estimating social and environmental values ➡️Determining relevant social and environmental issues: the concept of materiality ➡️Quantifying social and environmental impacts ➡️Monetizing social and environmental impacts: the concept of shadow prices ➡️Discounting social and environmental impacts: the social discount rate - Externalities and internalization ➡️Pricing externalities ➡️How to internalize social and environmental externalities into the financial value ➡️The concept and estimation of integrated value - Social and environmental risks ➡️Risk forms: physical, transition and litigation risks ➡️Incorporating social and environmental risks into the cost of capital: multifactor pricing models ➡️The cost of integrated capital ➡️The impact of social and environmental risks on bond valuation and credit risk - Sustainable financial products ➡️Green bonds ➡️Social bonds ➡️Sustainability-linked bonds ➡️Social impact bonds - Integrating ESG issues in equity investment strategies ➡️Negative screening, integration, best-in-class, impact investing, and other strategies ➡️Is sustainability a source of higher investment performance? Evidence from ESG funds’ performance and risk - The role of a firm’s corporate governance for creating long term value ➡️Optimizing executive and employee compensation ➡️Investor engagement: the role of hedge funds; mutual, pension, and index funds ➡️Incorporating sustainability into the board of director and internal committees ➡️Investment coalitions for sustainability: PRI and other initiatives - Measuring and disclosing a firm’s sustainability ➡️Common metrics and Integrated Reporting ➡️ESG data providers: scores and rating ➡️Pros and cons of ESG ratings ➡️Sustainability reporting standards: IFRS S and ESRS - EU Regulation on sustainability ➡️Taxonomy (Regulation (EU) 2020/852) ➡️Non-Financial Reporting Directive (2014/95, NFRD) and Corporate Sustainability Reporting Directive (2022/2464, CSRD) ➡️Sustainable Finance Disclosure Regulation (2019/2088, SFDR) ➡️Greenwashing: supervising sustainability issues - Firm performance and sustainability: Empirical evidence - The bottom line: conclusions, proposals, guidelines, and challenges of tomorrow’s sustainable finance
(reference books)
Textbooks
a) Schoenmaker, D., & Schramade, W. (2023), Corporate finance for long-term value, Springer b) Edmans, A. (2021). Grow the pie: How great companies deliver both purpose and profit, updated and revised version. Cambridge University Press c) Schoenmaker, D., & Schramade, W. (2018). Principles of sustainable finance. Oxford University Press.
Detailed outline of chapters and sections for each book will be explained during the course
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