Essentials of Sustainable Finance

Welcome to Lesson 1.1! Here, we'll define sustainable finance, distinguish it from traditional finance, and explore the key drivers accelerating its growth.

Welcome to Lesson 1.2! This lesson traces the journey of sustainable finance from its nascent beginnings as niche "ethical investing" to its current status as a mainstream and powerful force in global financial markets.

Welcome to Lesson 1.3! This lesson will introduce you to the fundamental concepts and guiding principles that underpin sustainable finance, providing a solid theoretical framework for the rest of the course. These principles help financial professionals navigate complex decisions where financial returns intersect with environmental and social outcomes.

Welcome to Lesson 2.1! This lesson focuses on the "E" in ESG: Environmental factors. These factors relate to a company's or an investment's impact on the natural world, as well as how environmental issues impact the company itself.

Welcome to Lesson 2.2! This lesson delves into the "S" in ESG: Social factors. These factors relate to how a company manages its relationships with its employees, suppliers, customers, and the communities where it operates. A company's social performance can significantly impact its reputation, operational stability, and long-term financial viability.

Welcome to Lesson 2.3! This lesson focuses on the "G" in ESG: Governance factors. These factors pertain to a company's leadership, internal controls, and the rights and responsibilities of its stakeholders, particularly shareholders. Strong governance is often seen as the bedrock upon which sound environmental and social performance can be built.

Welcome to Lesson 2.4! This lesson brings together the "E," "S," and "G" by exploring how financial professionals actively integrate these factors into their investment analysis and decision-making processes. ESG integration is not just about having data; it's about making that data actionable to enhance financial outcomes.

Welcome to Lesson 3.1! Investors employ a range of strategies to incorporate environmental, social, and governance (ESG) considerations into their investment decision-making. These strategies vary in their depth of integration and their primary objectives, from simply avoiding certain industries to actively seeking positive social and environmental outcomes.

Welcome to Lesson 3.2! For investors to implement the strategies discussed in the previous lesson, they need reliable information on companies' ESG performance. This lesson explores the critical role of ESG screening and the methodologies used by various rating agencies to provide this data.

Welcome to Lesson 3.3! This lesson focuses on Impact Investing, a rapidly growing segment of sustainable finance that goes beyond traditional ESG integration by explicitly seeking to generate positive, measurable social and environmental impact alongside a financial return. We'll also explore a specific innovative instrument: Social Impact Bonds (SIBs).

Welcome to Lesson 3.4! Theory is important, but seeing how sustainable investment strategies play out in the real world provides invaluable context. This lesson will present a few diverse case studies to illustrate the application and outcomes of sustainable finance principles.

Welcome to Lesson 4.1! Building a sustainable portfolio goes beyond simply avoiding "bad" companies or selecting "green" ones. It involves a systematic approach to asset allocation, diversification, and investment selection that aligns with specific sustainability goals while still meeting financial objectives.

Welcome to Lesson 4.2! Just as ESG factors present opportunities, they also introduce unique risks that traditional financial risk management might overlook. This lesson focuses on identifying, assessing, and mitigating ESG-related risks at the portfolio level, ensuring that sustainable portfolios are truly resilient.

Welcome to Lesson 4.3! While constructing a sustainable portfolio and managing its risks are crucial, proactive involvement with investee companies—known as active ownership or engagement—is a powerful strategy for driving positive change and enhancing long-term value. This lesson explores the various facets of active ownership and its increasing importance in sustainable finance.

Welcome to Lesson 4.4! Measuring the performance of sustainable portfolios presents a dual challenge: you need to assess both financial returns and the achievement of sustainability objectives. This lesson explores how to measure and report on both aspects, highlighting the complexities and best practices in this evolving area.

In this foundational lesson, you will learn to view the Sustainable Development Goals (SDGs) as the closest thing we have to a global business plan. Adopted by all United Nations Member States in 2015, the 2030 Agenda for Sustainable Development, with its 17 SDGs, is an urgent call for action by all countries in a global partnership.

ow that you understand the "what" of the SDGs, let's focus on the "how." How do you, as a finance professional, translate these global goals into a concrete investment thesis?

Investing with an SDG-focus is powerful, but it comes with a critical responsibility: proving the impact. This lesson is about moving from "I think this helps" to "I can demonstrate how much this helps." This is the world of Impact Measurement and Management (IMM).

In this lesson, we move from theory to reality. We will analyze real-world examples to see how innovative finance is being deployed to tackle the SDGs.