FM201: Sustainable Finance and Impact Investing

The challenges of climate change and sustainability are reshaping how we think about finance and investment. Investors and business leaders have an unprecedented opportunity to drive meaningful change, but only if they understand how to integrate purpose with profit and make sound decisions about sustainable capital allocation.

This course introduces you to the essential tools and frameworks of sustainable finance and impact investing. You will explore how ESG principles shape investment decisions, how to evaluate the trade-offs between financial returns and social impact, and how sustainable finance drives capital allocation and firm behaviour. Drawing on cutting-edge research from LSE's Department of Finance, you'll learn to navigate the complexities of responsible investing and understand where investors and industry need to focus to support the transition to a more sustainable economy.

Focusing on two key areas, the course equips you to analyse how sustainable finance and impact investing create value while also developing the skills to lead organisational change toward more sustainable practices.

Our approach is practical and highly applied. You will work with real-world cases and master both established and emerging tools in ESG investing and impact measurement. By the end, you'll be prepared to apply these frameworks to drive responsible investment decisions and build toward a more sustainable future.

Prerequisites: Any undergraduate-level course with some finance or economics content. Basic mathematics and statistics recommended.

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: One midsession examination (50%) and a final examination (50%)

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is ideal if you are seeking to understand how finance and investment can drive meaningful change toward a more sustainable future. You will gain critical skills for careers in asset management, ESG investing, climate finance, corporate sustainability, or impact-focused finance. The course will also be valuable if you are interested in climate risk, sustainable investment strategies, or ESG integration in financial markets, and want to master the frameworks used by today's leading investors and institutions.

• Understand how sustainable finance and impact investing have evolved from niche concepts to mainstream investment practices
• Analyse how ESG principles, climate risk, and sustainability factors shape capital allocation, firm behaviour, and investment returns 
• Evaluate the trade-offs between financial performance and social impact in responsible investment strategies 
• Apply frameworks and tools used by leading investors and institutions to assess sustainability, measure impact, and integrate ESG factors into financial decision-making 
• Critically examine real-world cases of sustainable finance and impact investing to understand both the motivations and consequences of these practices

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.