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2023/2024  KAN-CCBLV1031U  Critical Cases in Environmental Social Governance (ESG) and Sustainable Investments

English Title
Critical Cases in Environmental Social Governance (ESG) and Sustainable Investments

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Min. participants 50
Max. participants 150
Study board
Study Board for BSc and MSc in Business, Language and Culture, MSc
Course coordinator
  • Kristjan Jespersen - Department of Management, Society and Communication (MSC)
Main academic disciplines
  • CSR and sustainability
  • Finance
  • Accounting
Teaching methods
  • Online teaching
Last updated on 02-02-2023

Relevant links
Learning objectives
  • Refine analytical skills and deep business knowledge linked to the critical issues faced by financial organizations when applying ESG to sustainable investments.
  • Articulate, show curiosity, and analyze the effectiveness of the range of impact tools and tactics currently available to impact investors. These include direct and fund investments, guarantees and credit enhancements, the role of subsidy, screening and shareholder engagement.
  • Understand the difficulties of financial experts to design tools that both meet fiduciary responsibilities and sustainable outcomes.
  • Map impact investing opportunities against existing product offerings and explore the gaps. Outline lessons and structures that can be applied from traditional capital markets to impact investing.
  • Reinforce active debate about the trade-offs and consequences faced when using ESG metrics and designing sustainable investments.
Examination
Critical Cases in Environmental Social and Governance (ESG) and Sustainable Investments:
Exam ECTS 7,5
Examination form Oral exam based on written product

In order to participate in the oral exam, the written product must be handed in before the oral exam; by the set deadline. The grade is based on an overall assessment of the written product and the individual oral performance, see also the rules about examination forms in the programme regulations.
Individual or group exam Oral group exam based on written group product
Number of people in the group 2-4
Size of written product Max. 30 pages
It is possible to write the exam assignment in groups of 2-4. Groups of 2 have to hand in no more than 20 pages, groups of 3 no more than 25 pages, and groups of 4 no more than 30 pages.
Assignment type Case based assignment
Release of assignment An assigned subject is released in class
Duration
Written product to be submitted on specified date and time.
15 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Grading scale 7-point grading scale
Examiner(s) Internal examiner and second internal examiner
Exam period Winter
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

Student groups will be tasked to conduct a research project into an aspect of ESG.

 

Examples of potential research projects of this type would be:

 

a.    An empirical study of the stock price reaction to an ESG event which would be expected to affect a number of firms. The analysis will include how the valuation of the firms changed after this event (i.e., how investors reacted to the event) and how firms themselves responded through any changes (or non-changes) in their ESG profile. It is expected that the first analysis would be statistical in nature while the second would be qualitative. 


b.    An examination of the returns to a portfolio of firms that are screened on past ESG factors. The student will decide which factors to employ for the screening for the inclusion of firms into the portfolio and explain the motivation for the factors chosen. The returns will be analysed in a statistical analysis which will include comparison to returns on index portfolios, controlling for risk. 


c.    Student groups will be tasked to design their own sustainable finance vehicle, based on the criteria and foci set out by the client.

 
Course content, structure and pedagogical approach

The purpose of this course is two-fold: (1) to provide a conceptual and theoretical foundation for corporate ESG (Environmental, Social and Governance) policies and actions and investors’ preferences regarding such policies and actions and (2) how such policies and actions affect firm performance and investor reactions.

 

Using a blend of readings, cases, discussions, and a major research project, students will learn to critically assess the actions of investors and corporations with regard to ESG policies, including the potential motivations and resulting consequences, that is, the valuation effects and externalities.

 

This course is designed as a case based indepth study of both theory and practice in the field of ESG and sustainable investments. Students will design and conduct their own independent research project on behalf of a major financial institution. 

 
Description of the teaching methods
The class will consist primarily of discussion with lectures included. It is essential that you come to class prepared to actively participate in the discussions of the day’s topic and with the knowledge from the previous class discussions. In particular, the readings are critical for being prepared.

Class participation is a significant part of the learning process. Thus, it is highly important that during class you are involved in the discussion by providing your own thoughts and by listening to and considering the thoughts of your colleagues. Our further goal is to get you comfortable expressing your ideas and opinions in a group situation. It is something you will be doing throughout your life, both at work and in extracurricular activities such as volunteer work, and it is important for leadership. During the presentation portion of the course and during the corporate representative visits, it will be important for full class participation.
Feedback during the teaching period
Students will receive feedback in the following forms
In class feedback based on the classroom discussions
Digital feedback in response to emails
Exam feedback following the exam
Student workload
Lectures 30 hours
Exam 35 hours
Preparation 141 hours
Total 206 hours
Expected literature

Li, Y., Gong, M., Zhang, X. Y., & Koh, L. (2018). The impact of environmental, social, and governance disclosure on firm value: The role of CEO power. The British Accounting Review, 50(1), 60-75.

 

Clarkin, J. E., & Cangioni, C. L. (2016). Impact investing: A primer and review of the literature. Entrepreneurship Research Journal, 6(2), 135-173.

 

Flaherty, M., Gevorkyan, A., Radpour, S., & Semmler, W. (2017). Financing climate policies through climate bonds–A three stage model and empirics. Research in International Business and Finance, 42, 468-479.

 

Clarkin, J. E., & Cangioni, C. L. (2016). Impact investing: A primer and review of the literature. Entrepreneurship Research Journal, 6(2), 135-173.

 

Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169-178.

 

Harvard Teaching Cases

 

Rogers, S., Mosley, V., (December 1, 2017). Vicki Fuller: Chief Inestment Officer of New York State's €150+ Billion Employee Pension Fund. Harvard Busines School. 5-318-007.

 

Singh, J., Dubrule, P. (2017) Credit Suisse: Building an Impact Investing Business in Asia. INSEAD Teaching Case. 

 

Henderson, R., Serafeim, G., Lerner, J., Jinjo, N. (March 1, 2019). Should a Pension Fund Try to Change the World? Inside GPIF’s Embrace of ESG. Harvard Business School 9-319-067.

 

Esty, B., Knoop, C.I., Sesia Jr., A. (January 30, 2017) The Equator Principles: An Industry Approach to Managing Environmental and Social Risks. Harvard Business School 9-205-114.

 

Serafeim, G., Healy, P., and Sesia, A. (January 4, 2018) Oddo Securities - ESG Integration. Harvard Business School. 9-111-085.

 

Gandhi, V., Brumme, C., Schwalb, N. June 24, 2019) The Velux Foundations: Selecting Impact Funds. Harvard Business School. 9-819-021.

 

 
Last updated on 02-02-2023