Sustainable Finance (research)

Course goals

Learning objectives
At the end of the course, the student can:

• Understand and interpret concepts, methods and applications  of research in Sustainable Finance
• Read and critically review research in sustainable finance presented in class
• Develop and write a research proposal: formulate research questions, review the relevant literature, structure data and methods, and apply and discuss results
• Provide constructive feedback to peers (assigned discussant groups to final presentations)

Content

This course introduces the field of sustainable finance, providing an overview of key concepts, methods and metrics to analyse the relation between climate change, sustainable development, and finance. In particular, the course aims to equip participants with the background knowledge and tools to understand and analyse why sustainability and climate change matter for financial institutions, financial markets and the financial system.

In light of recent literature in asset pricing, corporate finance and risk management, we will discuss whether sustainability and climate risks are priced by financial markets across securities, instruments and legislations; how material such risks are for financial and non-financial firms, and for financial stability; the role of reporting (and misreporting), disclosure, risk assessment and stress testing to identify and quantify risks, and detect greenwashing; the role of corporate structure on sustainability commitments; implications for financial policy and regulation e.g. banking regulation and supervision for managing such risks; the practice of climate financial risk assessment and risk management in central banks and financial supervisors in Europe.

Students are encouraged to read and critically discuss climate and sustainable finance research, and how research can inform policy making, financial regulation, supervision, and investment decisions.

The course has the dual objective of (i) expanding students’ fundamental knowledge in the domain of climate finance and sustainable finance and (ii) further strengthening the research skills students need to complete their bachelor’s thesis.

The course features tutorial sessions and seminars. During the tutorial sessions students learn how to structure a research proposal in sustainable finance, presenting and discussing their work in class.  Students are expected to develop a research proposal, which will be evaluated. The research proposals should include   the research question, hypotheses, literature review and the contribution to the state of the art, the operationalization of the research question, data and data collection strategy, the identification and application of methods to implement the research, the discussion of results, and the implications for policy and investment decisions.  Students are also encouraged to provide comments on the research presented in class by their peers.  

Academic skills
This course focuses on developing the following academic skills, and by the end of the period students should be able to:
 
Communication skills

• Read and understand climate and sustainable finance research
• Develop a research proposal in sustainable finance
• Write and present the research proposal
• Provide critical and insightful feedback on peers’ presentations.
• Accept and process feedback from other students.

Information processing

• Detect and avoid any kind of plagiarism.
• Provide correct references in APA style.
• Comply to course guidelines on the use of AI

Academic research

• Formulate a research question and several testable hypotheses.
• Place your research in the state of the art and highlight the contribution
• Identify and select data sources for the relevant research question.
• Identify and explain relevant methodology to address the research question considering data availability
• Discuss and present results effectively, by also using tables and figures
• Draw clear conclusions and recommendations.

Effort requirements

• Attendance in tutorials for at least 80%

Place of the course within the curriculum:
Students are expected to have knowledge of:

• Introduction to Finance and Accounting (ECB1IFA)
• Corporate Finance and Behaviour (ECB2FIN)
• Econometrics (ECB2METRIE)

Courses that build on this course

• Applied Economics Research Course (ECB3OKVECO, bachelor’s thesis)

In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not reusable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN. Separate or spare codes are usually not available.