FOR16 Sustainable investments

• Topics

  Corporate managers frequently make decisions on how to support and maximize the value of the firm. However, can an investment boost a firm's profitability without benefiting the environment, employees, or community? Financial decisions must increasingly consider sustainability concerns to ensure ongoing commercial and societal success. This course connects these concepts by covering key topics at the intersection of sustainability and investment through an applied and case-oriented approach.

  The course will explore the concepts of sustainability in economics and the economics of sustainability, focusing on how corporate managers can make investments that are both sustainable and economically beneficial in the long term. In this course, the term "sustainability-related investments" will refer to investments focused on human, social, and environmental factors. We will examine the main environmental, social, and governance (ESG) measurement methodologies and provide insights into how ESG ratings can help investors identify, assess, and measure financially material ESG risks and opportunities.

  Economics and finance professionals typically view investments in terms of costs, benefits, cash flows, and risks. Building on knowledge of capital budgeting and project analysis, we will explore the specific assumptions and factors necessary for the valuation of sustainability-related investments. Therefore, the main goal of this course is to equip students with practical business skills for project valuation and investment analysis, with a focus on the intersection of sustainability and investment.

• Learning outcome

  Knowledge

  Upon successful completion of the course, the students will have knowledge about:

  • the concept of value and how to measure it
  • the role of firm's stakeholders in the firm's success and value
  • definition of sustainability of economic and economic of sustainability
  • valuation of sustainable financial investments
  • specific assumptions and factors that need to be included in the valuation of sustainability-related investments
  • project valuation and how sustainability considerations may affect investment decisions

  Skills

  Upon successful completion of the course, the students will be able to:

  • identify and evaluate relevant and important sustainability considerations in various projects and investments
  • perform project valuation and investment analysis while integrating sustainability factors into the valuation process
  • apply theories of sustainable investment on concrete projects and investment decisions

  General competence

  Upon successful completion of the course, the students:

  • will be well-versed in the above-mentioned elements related to knowledge and skills
  • will be able to apply these insights on practical investment problems'

• Teaching

  The teaching plan includes a combination of plenary lectures and a flipped classroom approach. In addition to traditional lectures, sometimes students will be required to engage in self-study on specific topics prior to the class, and class time will be used for problem solving.

  The course will include several individual problem-solving exercises, group case studies, and one mandatory group case assignment. The discussion and analysis of the exercises and cases are a crucial part of the course structure. The investment analysis will be conducted in Excel.

• Recommended prerequisites

  BED3

• Compulsory Activity

  One compulsory group case assignment, with a maximum of three participants per group, must be approved. The assignment is graded as approved, revise/resubmit, or rejected. Taking the final home exam requires an approved assignment.

• Assessment

  Individual 3 day home exam (from day 1, 09:00, to day 3, 14:00).

• Grading Scale

  A-F.

• Literature

  Bolton, Brian. Sustainable Financial Investments: Maximizing Corporate Profits and Long-term Economic Value Creation. Springer, 2016.

  In addition, some book chapters / articles will be available online.