ESG and other topics (MSB312)

ESG (Environmental, Social and Governance) issues have become central in modern finance. Sustainability affects corporate operations, either as an opportunity (e.g. green investment) or as a constraint (e.g. carbon pricing). It also affects financial capital markets. For example, a corporation's cost of capital is driven by the ESG properties of the corporations. For investors, ESG enters as a separate factor beyond risk and return when making asset allocations. To accommodate all these changes, the firms' corporate governance must adjust.

NB! This is an elective course and may be cancelled if fewer than 15 students are enrolled by August 20th for the autumn semester.

Not offered in 2025.

This course will consist of two parts

1. ESG topics
2. Other current financial topics

The first part of the course studies how firm objectives interact with social responsibility, the need to design incentives to achieve necessary changes for firms adjusting to the new circular economy. The E part looks at topics like: What do we mean by sustainability? What is Environmental economics, particularly the concept of externalities? How to incorporate sustainability in valuation models to value "green" projects and companies? How does sustainability affect financing decisions and possibilities for firms? The S component looks at ethics, human rights, and equity. The G component considers how power is distributed among the firms' stakeholders, and the need for behavioral finance.

The second part of the course covers current relevant topics in investments, risk management, securities issuance, and mergers and acquisitions.

Knowledge Upon completion of the course, students will have knowledge of

• assessing the objectives of the firm, including value and social responsibility
• how to design proper incentives for managers to achieve the firm's goal applying behavioral concepts associated with the governance of firms
• the concepts involved in sustainability challenges, particularly those linked to finance
• metrics related to sustainability from a finance perspective
• ESG and other concepts in applied finance situations

Skills Upon completion of the course, the candidate will be able to

• apply critical thinking on the pros and cons of the different governance mechanisms present in different markets (domestic and international)
• measure and manage the exposure of corporations and financial assets to sustainability risk, such as climate change
• identify sustainability issues related to corporate finance issues, such as valuation, corporate transactions, and investment financing
• ask critical questions about finance-related business situations; use of method, assumptions and calculated value.
• communicate central finance concepts, both written and oral, in business settings.

The same admission requirements as for the MSc program in Business Administration.

In addition: MSB309 Corporate Finance, MSB205 Investments and MSB210 Risk Management and Derivatives (required prerequisite knowledge)