ESG and Sustainable Investing 101

Welcome to ED4S’s foundational course on ESG and Sustainable Investing.

This course is designed for professionals interested to get up to speed with the evolution of sustainable investing and environmental, social, and governance factors in the investing industry.

This entertainment driven, highly visual and laser-focused course will build a solid foundation in understanding the integration of the Environmental, Social, and Governance Factors in the investment decision process.

Course draws on the research and programs developed by the CFA Institute, Sustainability Accounting Standards Board, Principles of Responsible Investing and numerous other renowned resources.

COURSE INSTRUCTOR: Maria Maisuradze, CFA, FSA

COURSE NARRATOR: Rob Rankin

ABOUT US:

ED4S Academy draws on years of sustainable finance industry expertise and leading research to design and build engaging, visual and adaptive short courses in Sustainable Finance.

We help organizations to offer ESG training to their employees in a flexible, scalable and cost-effective manner.

ED4S is a Sustainability-Awareness-As-A-Service Platform.

OUR MISSION:

To accelerate adoption of sustainability practices by mainstreaming sustainable finance education.

ABOUT THE COURSE:

This is one of the 4 courses offered by ED4S and is a great place to start your journey in the Sustainable Finance space.

Course is designed for individuals with no background in ESG or Sustainable Finance that wish to create general understanding and transition their career to positions such as ESG Analyst, ESG Portfolio Manager, Financial Advisor, Sustainability Officer, ESG consultant.

IMPORTANT NOTE:  This course DOES NOT teach you how to manage your personal investments or how to construct an ESG portfolio.

This is an introductory course on Sustainable Investing and Environmental, Social and Governance (ESG) Factors.

The course is designed to meet the needs of individuals that would like to collaborate and have a common language with the sustainability professionals.

Level: Beginner

****Ideal for individuals with no background knowledge on ESG Investing topic***. For a more advanced courses on Sustainable Finance courses, please refer to ED4S website.

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, ✔️ Passionate about sustainability; this course will allow you to catch up and build awareness about interconnection of the ESG and investment management.

Financial industry is evolving at a rapid speed; demand for Sustainable and Socially Responsible Investments is rising on both individual and institutional investors’ 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.

The 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:

COURSE CURRICULUM

MODULE #1

• What is Sustainable Investing

• Sustainable Investing Overview

• Navigating ESG Investing Terms

• Market Size

• Terminology & Concepts

• Quiz

MODULE #2

• Investment Strategies

• Financial Performance

• Quiz

MODULE #3

• Environmental Factors

• Social Factors

• Governance Factors

• Bridging ESG Factors and Financial Performance

• Quiz

MODULE #4

• ESG Data and Ratings

• ESG Standards & Frameworks

• Quiz

MODULE #5

• Key Takeaways

• Assignment : Case Study

• Assignment: Test

• Assignment: Explanations

BONUS:

• ESG Integration in Practice

• Careers in Sustainable Finance

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

Music:  “Keys of Moon – The Epic Hero” is under a Creative Commons license (CC BY-SA 3.0)  Music promoted by BreakingCopyright

Who this course is for:

• Financial Advisors
• Portfolio Managers
• Investors
• Business Students
• Curious about Sustainability