MOOC 4 – Climate Aware Investing

Course description

Finance may have a central role to play against climate change on the condition that risks are properly measured and managed. In this course, learners will be introduced to the latest academic research findings and the most commonly used methods in industry to cope with climate change financial risks.

How do we assess these kinds of risks?
Can our portfolios perform well and at the same time contribute to the transition towards a low-carbon economy?
How do climate change risks affect financial markets?

This course starts with an overview of climate change and the tools at the disposal of policymakers to curb this phenomenon. These tools, when used to their fullest extent, will have a big impact on businesses and this impact may spill over into the financial markets even before the policies are fully implemented. The risks associated with these changes are grouped under the definition of transition risks.

In this MOOC learners will analyse these risks and also discuss the methodologies most widely used by asset managers to manage their portfolios’ carbon exposure. The final module of this course shows a real-world example of implementation.

At the end of the course, learners will understand how to maximize the contribution of their investments to the fight against climate change.

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Faculty

Lionel Martellini

Professor of Finance, EDHEC Business School

Scientific Advisor, EDHEC-Risk Climate Impact Institute

PhD UC Berkley

Emanuele Chini PhD Candidate in Finance, EDHEC Business School Teaching assistant, EDHEC Business School

Emanuele Chini

PhD Candidate in Finance, EDHEC Business School

Teaching assistant, EDHEC Business School

Learning objectives

Understand how to measure climate risk in equity portfolio
Learn how to manage climate risk in equity portfolio
Implement climate aware decisions
Understand how to design low-carbon-tracking-index portfolio (on Excel)

About EDHEC

Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.

About EDHEC-Risk Climate Impact Institute

Marking the priority assigned by the School to sustainability issues and building on its research programmes exploring the relationships between climate change and finance, EDHEC-Risk Institute became EDHEC-Risk Climate Impact Institute in October 2022. The Institute's mission is to help private and public decision-makers manage climate-related financial risks and make the best use of the financial tools available to transition to low-emission and climate-resilient economies. The Institute’s research programmes explore the relationships between climate change and finance and our key ambition is to become a leading academic reference point for long-term investors, helping them to manage the asset-pricing implications of climate change as well as mitigation and adaptation efforts.