FM471      Half Unit
Sustainable Finance and Impact Investing

This information is for the 2024/25 session.

Teacher responsible

Professor Christopher Polk and Dr Greg Fischer

Availability

This course is available on the Double Master of Public Administration (LSE-Columbia), Double Master of Public Administration (LSE-Sciences Po), Double Master of Public Administration (LSE-University of Toronto), Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), MPA Dual Degree (LSE and Columbia), MPA Dual Degree (LSE and Hertie), MPA Dual Degree (LSE and NUS), MPA Dual Degree (LSE and Sciences Po), MPA Dual Degree (LSE and Tokyo), MSc in Accounting and Finance, MSc in Finance (full-time), MSc in Finance (full-time) (Work Placement Pathway), MSc in Finance (part-time), MSc in Finance and Economics, MSc in Finance and Economics (Work Placement Pathway), MSc in Finance and Private Equity, MSc in Finance and Private Equity (Work Placement Pathway), MSc in Finance and Risk, MSc in Management (1 Year Programme), MSc in Social Innovation and Entrepreneurship, Master of Public Administration and Master of Public Policy. This course is not available as an outside option.

No exceptions to the availability policy will be made, and audits of FM471 are not allowed.

This course is not capped for Department of Finance students; any students that request a place in Autumn Term will be given one. For students from other departments who meet the necessary criteria (if applicable), you are likely to be given a place, but this is not guaranteed. Chances of gaining a place on this course are increased if it is selected during initial course selection in the Autumn Term.

This course does not permit auditing students.

Pre-requisites

Students must take one of the following: FM423/FM423E Asset Markets, or FM436 Financial Economics, or FM429 Asset Markets A, or FM439 Asset Markets for MSc Finance & Risk or FM431A Corporate Finance A, or FM473A/FM473W Financial Markets, or FM474A/FM474W Managerial Finance. The pre-requisite may be taken concurrently.

Students who can demonstrate comparable background in a graduate-level course (which must be confirmed with a transcript and syllabus detailing course content, translated into English if necessary) may be granted an exemption from this requirement at the discretion of the course leader. Undergraduate coursework or professional experience / qualifications are not sufficient and will not be considered.

Course content

This course provides a conceptual foundation in sustainable finance and impact investing along with a clear understanding of the empirical facts associated with how sustainable finance and impact investing affect firm and fund performance. Using a blend of readings, lectures, cases, and discussions, participants will learn to critically assess the actions of investors and firms with regards to sustainable finance and impact investing, including both motivation and resulting consequences.

Topics addressed will include corporate ESG (Environmental, Social, and Governance) investing, climate finance, and various impact investing topics. Participants will take away from the course a solid understanding of 1) the evolution of sustainable finance and impact investing from niche field to mainstream; 2) the variety of ways in which sustainable finance and impact investing are implemented in practice, and 3) the tools, models and frameworks behind sustainable finance and impact investing.

Teaching

30 hours of seminars in the WT.

Formative coursework

Case studies and homework assignments will help communicate and develop understanding of course concepts.

Indicative reading

  • Freeman, Ed, 1997, "Stakeholder Theory of the Modern Corporation", Business Ethics, 5th Edition, 38-48.
  • Friedman, Milton, 1970, “A Friedman doctrine: The social responsibility of business is to increase its profits,” The New York Times Magazine, September 13, 1970.
  • Giglio, Stefano, Bryan Kelly and Johannes Stroebel, 2021, "Climate Finance", Annual Review of Financial Economics 13, 15-36.
  • Pastor, Lubos, Robert F. Stambaugh, and Lucian Taylor, 2021, “Sustainable Investing in Equilibrium,” Journal of Financial Economics 142 550-571.
  • Pedersen, Shaun Fitzgibbons, and Lukasz Pomorski, 2021, “Responsible Investing: The ESG-efficient Frontier,” Journal of Financial Economics 142 572-597.

Assessment

Continuous assessment (100%).

Key facts

Department: Finance

Total students 2023/24: 227

Average class size 2023/24: 77

Controlled access 2023/24: No

Value: Half Unit

Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Leadership
  • Self-management
  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills
  • Commercial awareness
  • Specialist skills