Our economic models were developed in the age of resource abundance when natural resources were plentiful and carbon emissions limited. No environmental concerns were factored into these models, only labour and capital. Likewise, financial theory does not account value to natural resources beyond their near-term cash flows[1].
The financial system is integral and crucial to achieving a smooth transition to a low-carbon economy!
This course will provide insights into sustainable finance aspects like governance and financial behaviour, changing financial strategies, integrated reporting, investing for long-term value creation, equity investing, impact investing, green bonds, new forms of lending, microfinance, sustainable project financing, social entrepreneurship and transition management.
Building on the basics of finance, the topics addressed will give students tools to invest and fund businesses in a more sustainable way. Application of the theory in a practical way is of course part of the course, and supported by the book on Principles of Sustainable Finance several articles and cases. [2]
Topics that are covered by the course are:
- Stakeholder vs shareholder value
- Short-term profits vs long-term goals value creation
- Behavioural finance
- Role of institutional investors
- Sustainability indices and ratings
- Funding of circular business models
- CSRD and metrics
- Performance measures
- Risk management
- Values-based banking
The lecturers have extensive experience in the international financial world and in teaching finance and banking courses in an international setting.
Also, guest lectures will be part of the course, with presentations by e.g. Ecovadis and a Bank. As one of the project assignments, students will develop a financial plan. Students will also work on a (financial) assignment provided by a real-life (social) company. Visit tot he ECB in Frankfurt is evt. possible.
Additional literature:
Net positive by Andrew Winston and Paul Polman, former Unilever CEO
The Value of a Whale by Adrienne Buller,
Regenerative Finance by John Fullerton https://capitalinstitute.org/
[1] Schoenmaker, D. and W.Schramade (2019), “Principles of Sustainable Finance”, Oxford University Press
2] eg Verdoliva, V., & Vigne, S. A. (2022). An introduction to the
special issue on Green Finance and sustainability. Journal of International Financial
Management & Accounting, 33, 379–382; A. Buller, (2022), The value of a whale;
Paine, L.S., Fetter, H., (2020), US Private Equity Firms: ESG and Impact, HBS
This course is a logical follow-up on the course (B23) 'Introduction to Finance and Banking' (the week before this course).
Also, many students combine this course with "Sustainable Investing" (the week after this course).
What previous students (summer 2023) say about this course
"Amazing. Never thought learning finance could be this interesting, fun and enjoyable"
"I enthusiastically recommend this course to all future students seeking a transformative learning experience. From the outset, it captivated my curiosity and fueled my passion for the subject matter. The engaging curriculum, expert instructors, and collaborative atmosphere fostered a profound understanding of the material. Undoubtedly, enrolling in this course will be a decision you won't regret, as it equips you with invaluable skills and knowledge that extend far beyond the classroom."
Lecturers
Frans Boumans, MSc MBA
Target audience
This course is open to students of advanced Bachelor or at Master's level. A background in Business Studies is not required. Instead, students are expected to have an interest and/or background in either finance or banking and have to be curious to explore new financial models and innovations.
In case you have no or limited background in finance or banking, we advise you to first take part in the five-day course ‘Introduction to Finance & Banking’ and then take this course as a follow-on.
In all cases, a good command of English is necessary.
Aim of the course
The course aims to reach to following learning aims:
The student can explain the (changing) role of finance due to increasing focus on sustainability by companies:
- Explain how loans are issued, capital markets work in relation to innovations
- Explain financial failures and successes in the past and determine measures taken to avoid risks in the future
- Show they understand cycles and crises in the economy
The student can appraise relations between sustainable risks and funding.
- Explain the input variables that influence the funding for the firm
- Understand the impact of sustainability on risks and returns for a company
- Determine the elements that effect the return for a project in new industries or markets with different risk profiles
The student can identify the steps necessary for financial practices for a better future for next generations
- Describe the steps (or flow of information) needed to implement sustainable financial practices in corporates
- Convert existing (centralized) processes into new decentralized organizations, include smallholders and other stakeholders
- Use practices of change management (including behaviouralism) in order to adapt to this new (financial) world
Students will prepare a project proposal that identifies a hypothetical project for a real company which meets the goals of the company (including ESG goals), facilitates the company’s strategic mission, includes the impact on the financial results, the project evaluation and a discussion identifying project risks and ways to mitigate or manage these risks.
Study load
50 hours of lectures/field excursions including assignments (self-study).
Costs
The Student Fee (= reduced price) applies to all students currently enrolled in a Bachelor, Master or PhD programme and to 'Fresh Alumni' of any of these programmes. If this applies to you and you therefore believe that you are eligible for the reduced student fee, please include this in your motivation.
We are currently planning to teach this course in a physical setting. If this changes you will be informed via this page and via email.
Additional information
The housing fee includes 50 Euros for the USS sleeping bag and pillow which you can take home (small and light package) after the course. If you do not want to buy the USS sleeping bag, please notify us and we will give you a discount on the housing fee. In that case, do not forget to bring your own bed linen and pillow! In all cases, do bring your own towels, please.