• University of Exeter Business School
• Module

Sustainable Finance

Module description

This course will introduce you to the fundamentals of sustainable finance. Finance is a key element to international business as financial decisions help to drive business strategy and growth.  Confronted with the worldwide challenges and opportunities in business operations, global communities have raised concerns about the role of sustainable finance in areas suchas climate change, biodiversity, human rights and carbon emissions. This module is dedicated to addressing these concerns with new ways of thinking about finance and its role in business and society.  ESG (Environmental, Social, Governance) issues have become a major risk factor for investments. ESG data now forms an integral part of decision-making by companies and investors alike. This module will introduce you to key aspects of ESG, focusing on how to apply it in business and investment practice. You will develop an understanding of how ESG considerations form the base for sustainable and responsible decision-making in finance.

Module aims - intentions of the module

This module will help you to develop the knowledge and skills to understand and apply key concepts of sustainability finance in a business context. You will learn about a wide range of sustainability topics such as carbon emissions, human rights, biodiversity, and community involvement. We will base our learning process on recent research insights for a sound theoretical foundation. We will look at best practices from leading industry peers to provide you with a sophisticated toolset that allows you to apply key concepts of sustainable finance in everyday business practice. While you will learn to appreciate the opportunities and competitive advantages linked to ESG, you will also understand to view ESG topics as a major risk factor of firms and investors alike. By looking at major scandals and lawsuits linked to ESG, we will elaborate critical features of these events and how these issues might have been mitigated.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. identify best practices for key sustainable and responsible finance elements derived from recent research insights
• 2. assess major ESG disclosures and their relevance from a wide range of stakeholders such as management, investors, and society

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 3. critically discuss sustainable finance topics involving a wide range of theories
• 4. analyse the interrelations between business, society, and the environment and derive related trade-offs and opportunities for companies

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 5. apply ideas and experiences from different academic and professional disciplines and acknowledge differences related to culture, generations, and societies
• 6. engage independently with and make reasoned judgements about research on sustainable finance

Syllabus plan

• Sustainability and stakeholder theory
• What is sustainability and why is it important in a business context?
• Financial Markets and investors decision-making
• Corporate responsibility and Governance
• Current stage of ESG in the UK and internationally
• Community involvement & philanthropy
• Accountability & human rights
• Corporate carbon performance
• Biodiversity
• Sustainability reporting and sustainability assurance

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

• Edmans, A. (2020). Grow the pie: How great companies deliver both purpose and profit. Cambridge: Cambridge University Press. (updated/new edition expected Q4 2021; either version can be used)
• Gray, R., Adams, C. A., and Owen, D. (2014). Accountability, social responsibility and sustainability: Accounting for society and the environment. Harlow: Pearson.

Further specific readings will accompany each topic and will be posted along the online videos. Examples include:

• Albuquerque, R., Koskinen, Y., & Zhang, C. 2019. Corporate social responsibility and firm risk: Theory andempirical evidence. Management Science ,65(10), 4451–69.
• Dowell, G. W. S., S. Muthulingam. 2017. Will firms go green if it pays? The impact of disruption, cost, and external factors on the adoption of environmental initiatives. Strategic Management Journal, 38(6) 1287–1304.
• Howard-Grenville, J., S. J. Buckle, B. J. Hoskins, G. George. 2014. Climate change and management. Academy Management Journal, 57(3) 615–623.
• KPMG. 2020. Towards net zero: How the world's largest companies report on climate risk and net zero transition.
• Krueger, P., Z. Sautner, L. T. Starks. 2020. The importance of climate risks for institutional investors. Review of Financial Studies, 33(3) 1067–1111.
• Lewis, B. W., J. L. Walls, G. W. S. Dowell. 2014. Difference in degrees: CEO characteristics and firm environmental disclosure. Strategic Management Journal, 35(5) 712–722.
• Renneboog, L., Ter Horst, J., & Zhang, C. 2008. Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking & Finance, 32(9), 1723-1742.
• Strand, R. 2013. The chief officer of corporate social responsibility: A study of its presence in top management teams. Journal of Business Ethics, 112(4) 721–734.

Indicative learning resources - Web based and electronic resources

ELE: https://vle.exeter.ac.uk/

Indicative learning resources - Other resources

https://www.business-humanrights.org

Key words search

Sustainable Finance, Corporate Social Responsibility, Accountability, Biodiversity, ESG (Environmental, Social, Governance)