LL4GJE Half Unit
Legal Aspects of Sustainable Finance
This information is for the 2025/26 session.
Course Convenor
Dr Alperen Gozlugol
Availability
This course is available on the Executive Master of Laws (ELLM). This course is not available as an outside option to students on other programmes.
Available to Executive LLM students only. This course will be offered on the Executive LLM during the four year degree period. The Law School will not offer all Executive LLM courses every year, although some of the more popular courses may be offered in each year. Please note that whilst it is the Law School's intention to offer all Executive LLM courses, its ability to do so will depend on the availability of the staff member in question. For more information please refer to the Law School website.
Course content
In this course, we will closely examine regulatory and non-regulatory developments in sustainable finance, focusing mainly on the EU but also on the UK as the international pace-setters with a comparison to the US as a home to many international financial players. The course will remain highly relevant to students from other jurisdictions as we will discuss theory and regulatory approaches on a higher level before or after we tackle specific legislative pieces.
We will start the course by first discussing whether changes to how corporations are governed are necessary and to what extent they will contribute to sustainable value creation. This discussion will concentrate on the debate on corporate purpose (shareholder value vs. stakeholder value), fiduciary duties and executive remuneration. We will then move on to scrutinize the contribution that finance can make towards sustainability and therefore, whether and to what extent policymakers should place hopes on sustainable finance initiatives. We will closely look at the policy rationales of specific measures and evaluate whether they will have the intended impact. In particular, we will discuss whether disclosure-oriented measures in sustainable finance will achieve intended outcomes or become a regulatory distraction. Furthermore, we will look at the incentives of financial players (institutional investors, asset managers, banks etc.) to use their leverage to push companies towards more sustainability in the current regulatory framework as well as regulatory and non-regulatory constraints they face when pursuing purely pro-social goals without any link to financial returns. We will integrate the risk perspective into our sessions and discussions as a means for positive sustainable impact or as a regulatory concern in itself. As any evaluation involves comparative advantages of different tools to address the current problems, we will close the course with a debate on alternative measures to address corporate harm or externalities (such as tax, duties and liabilities).
Below is a breakdown of topics that will be covered:
• Session 1: Introduction to sustainable finance and ESG
• Session 2: Corporate purpose (I): shareholder vs. stakeholder value
• Session 3: Corporate purpose (II): cont’d and ESG-tied executive remuneration
• Session 4: Sustainability reporting (I): legal regimes and what are sustainability disclosures for?
• Session 5: Sustainability reporting (II): cont’d
• Session 6: Mechanisms of sustainable finance: theory and practice
• Session 7: Financial market participants: fiduciary duties and sustainability reporting
• Session 8: Investor engagement in sustainability: mechanisms (voice or exit), incentives and constrains
• Session 9: Sustainable banking and financial stability
• Session 10: A debate: what are the alternatives? Carbon tax, duties and liabilities
Teaching
24-26 hours of contact time.
Formative assessment
Students will have the option of producing a formative exam question of 2000 words to be delivered one month from the end of the module’s teaching session.
Indicative reading
- Milton Friedman, The Social Responsibility of Business Is to Increase Its Profits (Sept. 13, 1970), The New York Times
- Lucian A. Bebchuk & Roberto Tallarita, The Illusory Promise of Stakeholder Governance, (2020) 106 Cornell Law Review 91
- Oliver Hart & Luigi Zingales, Companies Should Maximize Shareholder Welfare Not Market Value, (2017) 2 Journal of Law, Finance and Accounting 247
- Tobias Tröger & Sebastian Steuer, The Role of Disclosure in Green Finance, (2023) 8 Journal of Financial Regulation 1
- Ben Caldecott et al., Sustainable Finance and Transmission Mechanisms to the Real Economy (Oxford Sustainable Finance Group Working Paper No. 22-04), available at https://www.smithschool.ox.ac.uk/sites/default/files/2022-04/SustainableFinance-and-Transmission-Mechanisms-to-the-Real-Economy.pdf
- Dirk Schoenmaker and Willem Schramade, Principles of Sustainable Finance (OUP 2018)
Assessment
Assessment Pathway 1
Essay (100%, 8000 words) in Autumn Term Week 1
Assessment Pathway 2
Legal problems (100%)
Key facts
Department: LSE Law School
Course Study Period: Autumn Term
Unit value: Half unit
FHEQ Level: Level 7
CEFR Level: Null
Total students 2024/25: Unavailable
Average class size 2024/25: Unavailable
Controlled access 2024/25: NoCourse 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
- Self-management
- Problem solving
- Application of information skills
- Communication
- Application of numeracy skills
- Commercial awareness
- Specialist skills