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The financial sector has a major role to play against climate change on the condition that risks are properly measured and managed. In this introductory course you 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? How will our portfolios react to these climate and ancillary risks as well as the financial impacts 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 and approaches at the disposal of FIs to mitigate this phenomenon. This will have a big impact on businesses and this impact may spill over into the financial markets including on societies and the environment even before the policies are fully implemented. The risks associated with these changes are commonly grouped under ESG risks, with the direct impact on the sustainability of the assets and businesses. In this course, we will analyse these risks and also discuss the methodologies most widely used by asset managers to manage their portfolios’ ESG exposure, including case studies of real-world examples of implementation.

Target Audience

  • Private Bankers
  • Financial Advisors
  • Retail/Priority Relationship Managers
  • Investment Professionals

Course Objectives

  • Will understand what the impact of climate change has on the investments and portfolios of your FIs and clients
  • Will understand how to maximize the contribution of your clients’ investments in the fight against climate change
  • Will be aware of the climate change impact on the sustainability of certain business models, sectors and investments
  • Will learn and understand how to mitigate such ESG risks and impacts on the investments and portfolios based on global best practice in risk-based performance approaches

Course Outline

Introduction & Rationale to Climate Investing

  • Climate change: The Basics
  • Current ESG Trends
  • Transmission of climate and environmental risks to financial risks
  • Implications of the Paris Agreement and post-COP26
  • Top concerns of investors

Linkage to ESG and Sustainable Finance

  • Economics of Climate Change
  • Environmental, Social & Governance Dimension of Climate Change
  • Criticality of Foundational Governance

Investing Channels

  • A Green Agenda to Investing
  • ClimateTech & CleanTech, incl. Carbon Mgt and Natural Capital
  • Low-Carbon Real Assets
  • Energy incl. Green & Renewable Energy
  • Energy Intensive Industries
  • Transport & Logistics
  • Climate & Environmental Resilience
  • Forest & Agri-based Investments
  • Waste & Pollution Control
  • Nature-based Assets
  • Water
  • Food, Water & Energy Security
  • IT & Communications
  • Environmental (ESG) Data / Alt Data Analytics (lifecycle value-chain)

Climate Investing Asset & Product Types

  • ESG rated and other ESG investing types, e.g. Activist, Stakeholder Engagement, SRI, Exclusion / Screening-based, etc.
  • Green & SLBs
  • PPP projects esp. infrastructure
  • ESG thematic & growth IP stocks

Challenges and Other Issues

  • Lack of global standard
  • Green and ESG-Washing
  • Evolving regulations, e.g., EU Taxonomy
  • Climate and Sustainability Reporting: TCFD evolving to TNFD
  • Scarcity of Science-based Climate Expertise and Data
  • Q&A