Certificate in Sustainable Finance


WEEK 1: June 5th – June 8th , 2023

Session 1: Implications of Sustainability for Financial Markets, Dr Peter Mathis (Week 1 Day 1, Monday, June 5th : 9:00-12.30)

  • The basic economic problem. Self-interest, public goods and the free rider problem. Free market capitalism and externalities.
  • The role of politics, regulators and the legal system in Sustainable Finance.
  • Central Banks and Sustainable Finance.
  • The role of finance. Why is there even a need for “sustainable finance”? What makes finance special in this context?
  • Shareholder versus stakeholder orientation. Why should managers internalize externalities to the environment in their decision making?
  • Define E, S and G and to discuss the main challenges for each of those dimensions. (Focus on climate-related aspects of sustainability).
  • Green Bonds: Financing by Governments and Large Companies.
  • Responsible lending by Banks.
  • Microfinance and Sustainability.

Session 2: Financing Investments and Financial Instruments, Dr Peter Mathis (Week 1 Day 1, Monday, June 5th :13.30-15.00)

  • Fundamentals of Corporate Finance and Financial Markets: A refresher
  • Financial Instruments: Equity and Debt
  • Financial instruments from a contract theoretic perspective: How do different financial instruments affect incentives of management?

Session 3: “Climate, Energy, and Finance: how late are we?”, Dr Thomas Gibon (Week 1 Day 1, Monday, June 5th : 15:00-17:00)

  • Participants will receive a compact overview of the challenges we all face and why immediate action is needed.

Session 4: Integrating Sustainability into Asset Management, Prof. Michael Halling (Week 1 Day 2 and 3, Tuesday, June 6th  and Wednesday, June 7th : 09.00-12.30/13.30-17.00)

  • Participants will study the main techniques to incorporate ESG in investment strategies covering simple screening approaches as well as active engagement strategies.
  • Traditional portfolio construction concepts as well as the risk-return tradeoff will be briefly reviewed.
  • Implications of sustainable investment strategies for expected returns as well as risk profiles of ESG-portfolios will be reviewed, critically assessed and evaluated within a consistent and comprehensive economic framework.
  • In addition to equity markets, ESG-implications for other asset markets, in particular, corporate bond markets will also be presented.
  • The lecturing will be complemented by case studies that provide specific, real-world situations and ask students to use the concepts discussed in class to solve the problems described in the case studies.

Session 5: Regulation and Legislation related to Sustainable Finance, Dr Marco Bodellini and Prof. Dirk Zetzsche (guest speaker) (Week 1 Day 4, Thursday, June 8th : 09.00-12.30/13.30-17.00)

  • Participants will gain a comprehensive understanding of the Sustainable Finance Regulatory Horizon and the main obligations for financial market participants.
  • European Commission action plan on financing sustainable growth and the EU Green Deal.
  • Regulation 2020/852 on the establishment of a framework to facilitate sustainable investment (“Taxonomy regulation”).
  • Regulation 2019/2088 on sustainability-related disclosures in the financial sector (the “SFDR”).
  • Regulation 2019/2089 on low carbon and positive carbon impact benchmarks.
  • Amendments to UCITS, AIFMD, MiFID II, Solvency II, IDD directives.
  • Modifications to the Non-Financial Reporting Directive.

WEEK 2: June 19th – June 22nd , 2023

Session 6: ESG-related Risk Management, Prof. Michael Halling (Week 2 Day 1 Monday, June 19th : 09.00-12.30/13.30-17.00)

  • By the end of that day, participants will have an overview of sustainability-related risks (their identification, measurement, management and frameworks).
  • Detailed discussion of climate-related risks including physical as well as transitional risks.
  • Brief discussion of scenarios frequently used in ESG-related risk management.
  • Overview of quantitative methodologies to measure ESG-related risks including climate Value-at-Risk and climate-adjusted estimates of probabilities of defaults.
  • Financial instruments that can be used to hedge against ESG-related risks.

Session 7: Corporate Reporting of ESG-related information, Prof. Alexander Bassen, Prof. Kerstin Lopatta (Week 2 Day 2, Tuesday, June 20th : 9:00-12:30 / 13:30-17:00)

  • Participants will learn the major requirements of corporate reporting in relation to ESG-dimensions under different accounting regimes.
  • Standardization, disclosure and measurement problems of ESG dimensions.
  • EU Initiative on ESG disclosure – a critical analysis.
  • Different initiatives at international level for a harmonization of non-financial data.
  • Case study on ESG reporting.

Session 8: Disclosure of ESG-related information for financial products, monitoring of ESG information and reporting of ESG performance in line with product commitments, Jane Wilkinson (Week 2 Day 3, Wednesday, June 21st : 9:00-12:30 / 13:30-17:00)

  • Participants will learn about practical operation of the sustainable debt markets, including the required disclosures and reporting relating such financial instruments.
  • Participants will learn the major disclosure requirements at the level of financial products as well as for investment managers and financial advisors.
  • Participants will discuss the challenges defining sustainable investments and setting key performance indicators to measure ESG performance in financial products.
  • Study the expectations of the regulator, with regard to embedding and documenting ESG-related information as well as ESG-related risks, at manager and product level, considering regulatory developments in European legislation.
  • EU standards, labels and certification of financial products including requirements of EU Green Bond Standards, EU Ecolabel and other labelling schemes.

Session 9: Trends in the industry and in Luxembourg, Prof. Hakan Lucius, (Week 2 Day 4, Thursday, June 22nd : 9:00 to 12:30)

This session will feature a series of short guest lectures on current and upcoming topics in sustainable finance, possible followed by a panel discussion on next important steps and important challenges.

  • Overarching trends: What is driving the sustainability?
  • Sustainability – what will it look like in five years?
  • Sustainability reporting and accounting – A sea-change in the EU and around the World.
  • Mainstreaming Sustainability in Finance, a must-have: Central Banks’ new sustainability requirements
  • Are we revising shareholder value maximization? From shareholder to stakeholder value.
  • How to best internalize externalities?  What are best practices.
  • Is the corporate future carbon negative?
  • Integrating Externalities, a competitive advantage ? Does it outperform in the long term?
  • Emerging legal risks in sustainability
  • Biodiversity and Natural Capital, the next frontier in sustainability.
  • What is next? From Sustainability to .. ?! 
  • Wrap up.

Session 10: Exam (Week 2 Day 4, Thursday, June 22nd : 13:30 to 15:30)

Session 11: Get together and Round-up (Week 2 Day 4, Thursday, June 22nd : 15:30 to 17:00)


Assessment and Grading

The certificate in sustainable finance will be graded on a pass/fail scale. There will be a final exam on the last day of the second week. In addition to the final exam, active participation in class will also contribute to a successful completion of the certificate.