Global Sustainability Issues and Finance

Introduction

The course provides a broad introduction to the sustainability, climate change and social equity issues the world faces. It surveys the facts, values and challenges of sustainable growth. The focus is on the trade-offs that society and humanity at large face, and the role of business, financial markets, governments and regulation in achieving the UN 2030 Sustainable Developments Goals (SDG). The course provides a rigorous analysis of global sustainability related issues, covering the relevant theories of climate change, externalities and public goods, international cooperation mechanisms. The course’s central theme is role of financial markets, and financial management in addressing ESG concerns, and how the different sectors of the financial markets (equity, fixed income, banking and insurance) are incorporating sustainability issues.

Standard finance and economic models ignore environmental and social concerns. Nature and its services are assumed to be freely available. However, the world’s current situation clearly demonstrate that ecological resources are limited.  Business, finance and economic models of the future must therefore incorporate social equity concerns and scarcity of environmental resources if they are to be useful tools to address sustainability issues.

This introductory course gives students insight into; how can businesses internalise their footprint in society? How can Corporate Governance be adapted to accommodate a more sustainable business practice? How can long-term institutional owners contribute to making businesses reach their long-term sustainable development goals? What will this have to say for choice of strategies and business models? These questions and more will be addressed in this course - all in a global context.

Course content

• The history of our understanding of global sustainability from Hans Carl von Carlowitz, through the Brundtland Report and the Stern Report, to the UN SDGs.
• The challenges of sustainability: natural resources, climate, inequality, poverty.
• The different aspects or dimensions of sustainability: Sustainable development, sustainable finance and sustainable business models.
• Externalities, internalization and public goods
• The role of finance and financial markets to address sustainability issues
• The different levels or stages of sustainable finance; from finance as usual to sustainable finance 3.0.
• ESG and its integration through integrated value and reporting
• Corporate governance and sustainability
• Strategy and business models’ role in the transition to sustainable business.
• Investments and long-term value creation
• Banking and new assessments of lending
• The insurance market and long-term risk
• International political economy and the environment