O7IM 2305A - Financial Markets and Sustainable Investment

This seminar course aims at providing students with the required analytical framework and scientific references to develop a critical understanding of major issues associated with sustainable investing in financial markets (e.g., ESG investment funds). The pedagogical approach blends a detailed presentation of the standard toolbox in finance (risk and return, portfolio choice, standard models of returns, stock and bond valuation, efficiency hypothesis…) and discussions of the new challenges involved by (i) adding a sustainability objective to the standard risk-return framework and/or (ii) incorporating financial risks associated with climate change and other ESG issues. These discussions will exploit key findings of recent academic research published in top finance and management journals. Short outline: I. Introduction: financial markets and the sustainability issue. II. Equity markets and sustainability. III. Bond markets and sustainability. IV. Information disclosure and the regulation of sustainable investment.

Jean-Stéphane MESONNIER

Enseignement électif

English

Basic notions of statistics, probability and accounting are a prerequisite. Solving application exercises implies using basic mathematic tools (cf. level I-math course in Sciences Po's Bachelor program). A strong interest in economics and finance, sustainability issues and for applying outputs of scientific research to practice is expected.

Spring 2023-2024

Students are expected to do required readings ahead of class, including skimming some textbook chapters in advance, attend the course and actively participate in the discussions in class. For lectures exploiting empirical research papers (circulated in advance), students who volunteer for making a short, non-technical, presentation of one of them (5-6 slides) and kick-start the discussion will earn one bonus point. The technical part of the course will be evaluated with short quizzes in class. Last, students will have to write a short review essay on one of the key topics of the course, due two weeks after the last lecture.