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OEBU 2180A - Sustainable Development In Finance

Type d'enseignement : Elective

Semester : Autumn 2018-2019

Number of hours : 24

Language of tuition : English

Pre-requisite

Macroeconomics, Financial Markets, Sustainability, ESG, Climate Change.

Course Description

Reshaping the global financial system first requires the integration of so called non-financial indicators in order to expand the scope of risk management to emerging issues such as climate change, inequality, human and natural capital. While financial stability is increasingly threatened by the effects of today's unsustainable economy, better assessing the global risk profile of assets for both equity and credit valuation implies to access and embed common methods, tools and standards across new KPIs, known as ESG (Environment, Social and Governance). The objective is twofold: to prevent new financial crisis and meet the global social and ecological challenges faced by the humanity. It also requires mobilizing most of the existing financial flows to support the needs of the low carbon economy as well as of the sustainable development goals. Greening the trillions cannot be achieved without building capabilities across the financial system with contribution and innovation from public and private sectors as well as clear policy signal and regulatory incentives. The objective is to familiarize students with the way these emerging risks are being addressed by financial institutions (e.g. ESG) as well as supervisors (e.g. TCFD) and their related tools. It divides into 3 parts: 1. Overwiew of Risk management in banking 2. ESG valuation and integration methods in both banking and investment industry. 3. Meeting the Paris 2015 Agreement target with Climate Finance.

Teachers

  • BEACCO, Jean-Michel (Head of Institut Louis Bachelier)
  • VOISIN, Stephane (Green Finance and Sustainable Finance Manager)

Pedagogical format

SSeminars are made of lectures, exercises, group case studies (South African Equity Boycott, Norwegian Pension Funds policy, Oil stranded Assets, Low Carbon Indices, Green Bonds issuance, etc..) as well as materiality matrix for specific sectors

Course validation

The course will be graded based on presentation of case study or a final exam in class.

Workload

12 seminars of two hours each (24 hours). Credits: 4.

Required reading

  • 1. Evolutions in Sustainable Investing, Cary Krosinsky
  • 2. Green Finance, Beat Bürgenmeier (Person)
  • 3. The Economics of Sustainable Development, Jean-Michel Lasry & co, (Economica)
  • 4. Positive Finance, Philippe Zaouati (édition de l'Echiquier)
  • 5. La Finance Autrement, Bernard Paranque, (Revue Banque édition)

Additional required reading

  • 6. La Finance Climat, Pierre Ducret et Maria Scolan (les petits matins)
  • 7. Financer la Transition Energétique, Alain Grandjean et Mireille Martini (l'Atelier)
  • The role of ratings in structured finance: issues and implications (http://www.bis.org/publ/cgfs23.pdf)
  • Ratings in structured finance: what went wrong and what can be done to address shortcomings? (http://www.bis.org/publ/cgfs32.pdf?noframes=1
  • Risk Management Lessons from the Global Banking Crisis of 2008: http://www.sec.gov/news/press/2009/report102109.pdf
  • Report on issues regarding the valuation of complex and illiquid financial instruments http://www.eba.europa.eu/documents/10180/592844/20080618b_valuation.pdf
  • OCC supervisory guidance on model risk management http://www.occ.gov/news-issuances/bulletins/2011/bulletin-2011-12a.pdf
  • PWC Risk in Banking http://www.pwc.com/en_GX/gx/banking-capital-markets/banana-skins/assets/pwc-banking-banana-skins-2014-v2-april.pdf