FIN 454: Sustainable Investing

Contents
What can investors do against global warming and to promote gender equality? Initially, sustainable investing was viewed as a niche topic, discussed in the media but rarely implemented in practice. However, it has now become a core strategy within the global investment industry. With this growth, though, has come criticism, particularly accusations of “greenwashing”. Does sustainable investing fulfill its promise? And what exactly is it, given the wide zoo of buzz words, i.e., “green investing”, “carbon neutral investing”, “socially responsible investing”. When even the European Commission classified nuclear energy as sustainable, at least part of the (German) public got additionally irritated. What is driving sustainable investing to the forefront of public discourse, and why is it now even facing restrictions in parts of the U.S.? This course will provide you with the necessary foundation to critically assess whether and how sustainable investing can generate both social and financial value.
The course is systematically building the foundation for understanding and assessing sustainable investing. To do so, the investment eco­system as a whole and the fundamentals of the portfolio management process and theory will be introduced. Active and passive asset management strategies will be explained and compared, not only theoretically, but down to actual financial products. In parallel, different approaches and concepts for sustainability will be categorized and their inclusion in the investment management process discussed. The course not only introduces theoretical concepts but also gives hands-on practical insights into (professional) investing.

Learning outcomes
After participating in this course, students should be able to:

• Identify key players in the investment management industry and explain their roles and functions.
• Understand the fundamentals of portfolio theory, asset management structures, and processes. Compare and contrast active vs. passive asset management strategies, critically analyzing their advantages and disadvantages.
• Explore the wider sustainability ecosystem, understanding the contributions of various stakeholders and detailing the impact of sustainable investing also by assessing real-world examples.
• Assess different approaches to sustainable investing, applying these frameworks to real-world case studies and investment strategies. Explain and compare actual financial products with respect to their investment approach and their sustainability focus. Review and evaluate the impact of regulatory and self-regulatory initiatives.
• Navigate the current debate around sustainable investing, considering its ethical, economic, and regulatory dimensions.

Necessary prerequisites
Semester 4 or higher

Recommended prerequisites
Introductory course in finance and econometrics is strongly recommended.

Examiner Performing lecturer

Prof. Dr. Alexandra Niessen-Ruenzi Dr. Hartmut Graf