ESG and Sustainable Investing 101

This is a basic introductory course on Sustainable Investing and Environmental, Social and Governance Factors.

Level: Beginner

****Ideal for individuals with no background knowledge on ESG Investing topic***. For a more advanced course on Sustainability Accounting, please refer to our Sustainability Accounting Standards course on Udemy.

Learning Outcomes

Being educated on environmental, social and governance factors is becoming a key in successful integrated business and investment management.

Whether you are a ✔️ Financial advisor, ✔️ Finance professional, ✔️ Student, ✔️ Investor, ✔️ Passionate about sustainability; this course will allow you to catch up and build foundational knowledge on Socially Responsible and Sustainable Investing.

Financial industry is evolving at a rapid speed; demand for Sustainable and Socially Responsible Investments is raising on both individual and institutional investor's side.  Integration of material environmental, social and governance (ESG) factors into financial analysis has proven to enrich fundamental analysis and result in better risk adjusted returns.

This course will allow you to understand the difference between ESG or Sustainable Investing and Ethical or Socially Responsible Investing. You will learn about the foundation and current state of the market as well as basic terms and concepts used in the field. We will cover some more specific environmental, social and governance factors and risks (climate change, water scarcity, biodiversity loss, employee diversity, human rights, data privacy, board independence and cyber security). Bridging ESG factors and financial performance will bring clarity on interrelationship between these extra-financial issues and risk/return outcomes.

Course will give you an overview of the seven main ESG Investing strategies: negative screening, positive screening, best in-class , norms based screening, ESG integration, impact investing and shareholder engagement. It will provide examples of how ESG factors can be integrated into the financial valuation models.

Multiple quizzes and an assignment will keep you actively engaged in the course.

To apply your knowledge you will conduct a case study analysis on Putnam Sustainable Leaders Fund.

We will wrap up with key takeaways from the course.

All students are welcome to join our community forum where we continue to share knowledge with you by posting articles, research papers and announcing pertinent webinars.

COURSE OUTLINE:

• ESG, Sustainable Investing and Socially Responsible Investing

• Terms and Concepts (SASB, TCFD, PRI)

• Environmental Factors

• Social Factors

• Governance Factors

• Bridging ESG and Financial Performance

• ESG Investment Strategies

• ESG in Financial Analysis

• Performance of ESG Strategies

• Case Study Assignment - Putnam Sustainable Leaders Fund

• Key Takeaways

  
  

REFERENCES:

1. Sustainable investment: A new landscape, Monika Dutt, OECD Observer

2. Understanding sustainable investment and ESG term, Schroder Investment Management North America Inc.

3. HSBC Sustainable Financing and ESG Investing report, HSBC Bank, 2018

4. ESG Funds Might Soon Have to Prove to SEC They’re Actually ESG, By Benjamin Bain, March 2, 2020,

5. The Global Risks Report 2020, World Economic Forum, 15th edition

6. Global Climate Change, NASA

7. Investing in a Time of Climate Change — The Sequel, Mercer, 2019

8. BBC, Science & Environment, Climate change: Should you fly, drive or take the train?

9. Coffee’s Invisible Carbon Footprint

10. United States Environmental Protection Agency, Greenhouse Gas Equivalencies Calculator

11. A practical guide to ESG integration for equity Investing

12. Climate Transition Risk for General Insurers, the Actuaries Institute Climate Change Working Group, Michelle Dong, Sharanjit Paddam, Stephanie Wong, Nov 2018

13. ESG INTEGRATION: HOW ARE SOCIAL ISSUES INFLUENCING INVESTMENT DECISIONS?, UN PRI, Justin Sloggett, CFA, Bettina Reinboth

14. Most big companies failing U.N. human rights test, ranking shows, Umberto Bacchi, NOVEMBER 11, 2018

15. Green Finance Is Now $31 Trillion and Growing, By Reed Landberg, Annie Massa and Demetrios Pogkas, June 7, 2019

16. 2018 Global Sustainable Investment review, Global Sustainable Investment Alliance

17. RIA Canada website

18. Morgan Stanley, Sustainable Reality Analyzing Risk and Returns of Sustainable Funds

19. Better Munis Worse, Evaluating ESG Effects on Risk and Return, by Patrick Wang, Morningstar Quantitative Research, Feb 20, 2020,

20. From the stockholder to the stakeholder, How sustainability can drive financial performance, G. Clark, a. Feiner, M.Viehs, University of Oxford, Arabesque Partners, March 2015

21. Gunnar Friede, Timo Busch & Alexander Bassen (2015) ESG and financial performance: aggregated evidence from more than 2000 empirical studies, Journal of Sustainable Finance & Investment, 5:4, 210-233, DOI: 10.1080/20430795.2015.1118917

22. GIIN website

23. RBC, Does Socially Responsible Investing Hurt Investment Returns

CREDITS:

Content review: Marie-Josée Privyk, CFA, RIPC, SASB FSA Credential holder, ESG Advisor

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