Reflecting sustainability criteria, especially climate change, in financial markets is increasingly gaining attention as opportunities and risks arising in this context are changing business practices. The course will prepare participants to understand major drivers and constraints of transforming the financial system into a more sustainable one. Furthermore, it will familiarize participants with the business, regulatory, and technical perspective of sustainable finance and will acquaint them to take an active part in the discussion around the topic. The course aims to enable financial professionals to integrate Sustainable Finance related aspects into their work through new knowledge and tools for advising their clients and business partners.

Environment Social and Governance criteria (ESG) and Impact Investing have gained a lot of traction in recent years and will continue to do so in the (post-) Corona world. Calls for a green and socially equitable re-start are very prominent. The EU’s Green New Deal (“Green Deal”) and the UN`s Sustainable Development Goals (SDGs) are good examples of how ESG criteria and ideas of Impact Investing are being incorporated into policy objectives. International development agencies have embraced ESG and impact criteria to guide investment decisions, as have many family offices, investment vehicles, and other institutional players, ranging from foundations and philanthropists to the private sector. ESG and Impact Investing are approaches to finance that are related to each other, although they may occupy different ends of the spectrum in terms of methodological intensity or operational mindset.

Climate change presents a risk to the global economy and consequently the finance sector. However, it also presents an opportunity for innovative financing to increase the economic and social resilience to climate impacts. As facilitators of the economy, financial institutions have a central role in the transformation to low carbon and climate-resilient development. Their responsibility is twofold: greening their portfolios towards Paris compatible financing and investments, and reflecting and integrating climate-related risks into their risk management processes. This gradual process involves harmonizing short-term business cycles and investment horizons with systemic and long-term thinking by all actors from the financial sector (e.g. banks, asset managers, insurers, pension funds, investment consultants, regulators, rating agencies). This process is supported by public actors who moderate the structural change required for a transition to climate-resilient economies. This course provides the basics of finance and investment for assessing the financial viability of investments in adaptation projects. It clusters business models to provide an understanding of the parameters according to the project scale and, for example, revenue models, ownership structure, and value proposition, and will link to the financing perspective. Different investors and intermediaries have very different investment strategies, levels of risk appetite, return expectations, and investment horizons. Crowding in the right investor for a project is essential to ensure their long-term involvement and the required scale-up of investment volumes.