Sustainable Investing

Course goals

• To understand different forms of sustainable investing and their differences in terms of underlying motives and goals.
• To explain different scientific views on the relation between firms' social/environmental performance and the return-risk profiles of their traded securities.
• To understand how the investor and the firm engage to reach sustainability goals.
• Learn to develop sustainable investment strategies that align with a specific financial return-risk objective.
• Evaluate sustainable investment risk and return.

Content

Contents
This course provides an in-depth coverage of sustainable investments that both individuals and professional investment managers can undertake, with an emphasis on (the theory and practice of) investing in companies that are traded on the secondary capital market. Next to covering different ways to embed sustainability criteria in investment decisions, the course explains along which lines investors - or their clients - may have specific preferences for a certain sustainable investment, rooted in their financial return/risk appetite and their social preferences. Understanding these different preferences for sustainable investments adds important insights into the ways sustainable investments are (mis)valued in the capital market, and how the environmental and social performance of investable companies can be integrated in the risk-return optimization techniques that investors employ when building portfolios. Knowledge of all these topics, coupled with scientific empirical evidence on the financial materiality of specific corporate sustainability information, can be translated to practical implementation of sustainable investing. Content covered in this course includes:
 

• The principles of sustainable investing; the different ways investors can implement sustainable investing, ranging from screening companies to so-called ESG integration and shareholder engagement;
• Scientific views and empirical evidence on the question whether the financial market factors sustainability issues - such as companies’ carbon footprint, employment relations into prices, risks and expected returns of companies’ securities;
• How to integrate security-level environmental, social and governance (ESG) information in equity analysis, investment portfolio optimization, and performance analysis;
• How to determine which specific sustainability issues – carbon footprints, waste, or labor standards - are most financially material to investors’ portfolio returns and risks, using latest academic evidence;
• Behavioral factors that drive sustainable investment demand: how individual investors’ preferences for environmental and social sustainability shape sustainable investing