The goals of this course are to discuss sustainable and responsible investment in the context of various asset classes, through both an academic and practitioner’s lens. Students learn how environmental, social, and governance factors can affect the decisions of investors who seek for a specific return/risk profile of their portfolios, whether sustainable investments can contribute positively to a sustainable society, and how important it is to understand the financial and nonfinancial preferences of investors in order to develop investment vehicles that cater to clients.

This course fully focuses on the theory and practice of sustainable investments. It demonstrates how corporate-, investor-, and country-specific sustainability issues affect the development of financial products and may influence investment strategies. The first part of the course explains how sustainable investing translates to the management of investment portfolios in traditional asset classes, such as the optimization of return/risk characteristics of equity portfolios and fixed-income portfolios by means of Environmental, Social, and Governance (ESG) Factors. The course subsequently moves on to sustainable investments that are explicitly intended to achieve positive impact on sustainable development in emerging markets, such as “impact investments” and “microfinance” vehicles. Finally, the course explains in detail how analyzing the (non-) financial preferences and behavioral characteristics of prospective clients/customers are important in developing and successfully marketing sustainable financial products.

The course is taught using use a collection of top-ranked academic and high-impact practitioner-oriented articles, and cases that help students to confront theory with practice.

Courses and workload are demanding for all IB Master courses. Exchange students need to have obtained a Bachelor degree in business. The course touches on topics from the finance domain (and investments in particular) and economics. Students are expected to understand the key basic concepts in investment analysis and portfolio theory (such as CAPM, Modern Portfolio Theory, and investment performance evaluation). Analytical skills, understanding of excel, statistics, and an advanced level of English are required.