B0344 - SUSTAINABLE FINANCE

Learning outcomes

The course will investigate the links between financial dynamics and environmental sustainability, with a special focus on climate change and the low-carbon transition. After an introduction to sustainability and environmental economics, the course will analyse: i) the actors, assets and strategies to finance a sustainable economy; ii) the risk posed by both environmental and transition risks to financial institutions and the stability of the financial system. Finally, the course will offer an overview of the ongoing and possible sustainable finance policy strategies.

Course contents

The course will cover the following topics:

• Introduction to the economics of climate change and sustainability: drivers, impact, climate scenarios and policies for decarbonization.
• The effects of climate change on financial systems: physical, transition, and liability financial risks.
• ESG risk: what is it and how do we measure it?
• Sustainable investment strategies, impact investing, green assets and portfolios.
• Sustainable finance policy-making: taxonomy, benchmarks, standards, and regulation.
• Central banks and climate change; green monetary policy; climate stress testing
• Practical use cases of climate finance: public finance for adaptation, public finance for mitigation, net-zero portfolios.

Readings/Bibliography

Most of the readings will be in the form of lecture slides, academic papers or news. All readings will be available on Virtuale.

Useful textbooks interested students can refer to are:

• Roncalli, T (2025) Handbook of sustainable finance. Freely available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4277875
• Tol, R. (2025) Lectures on Environmental economics. Cheaply available at: https://buymeacoffee.com/richardtol/extras

Teaching methods

The course will be a combination of frontal lectures and student presentations/discussions.

Assessment methods

The grade for the course will be the weighted average of:

• Student class participation (10%);
• Group-work. Each student will self-allocate to a topic group (of between three and five members). Topics will be chosen from a list of options, but topic proposals are encouraged. Each group will: i) present the conclusions of their work to the class (25%); ii) submit a related essay via Virtuale (25%);

• Individual final exam. Each student will submit, by the date of the final exam, a written essay based on the individual reading of a research paper. Details of the requirements of the essay will be provided during the course (40%).

Teaching tools

All the course material (slides, readings etc.) will be made available on Virtuale.

Office hours

See the website of Francesco Giovanardi