THE UNIVERSITY of EDINBURGH

DEGREE REGULATIONS & PROGRAMMES OF STUDY 2024/2025

Timetable information in the Course Catalogue may be subject to change.

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Postgraduate Course: Climate Risk and Investment Alignment (CMSE11488)

Course Outline
SchoolBusiness School CollegeCollege of Arts, Humanities and Social Sciences
Credit level (Normal year taken)SCQF Level 11 (Postgraduate) AvailabilityNot available to visiting students
SCQF Credits10 ECTS Credits5
SummaryThe course provide students with an understanding of emerging financial sector management practice related to climate change. Across both public and private sector financial actors, two principal areas of focus are the management of risks associated with climate change and the alignment of assets and portfolios with climate goals agreed by governments. The course will provide an overview of the concepts and initiatives related to these management approaches (e.g. the Taskforce for Climate-related Financial Disclosures), and the skills and techniques necessary to implement these practices.
Course description The course provide students with an understanding of principal concepts emerging within the financial sector to taken climate change into account in decision-making and portfolio management. Across both public and private sector financial actors, two principal areas of focus are the management of risks and opportunities associated with climate change and the alignment of assets and portfolios with climate goals agreed by governments. The application and implementation of these management strategies, in turn, is highly dependent different types of forward-looking assessments such as scenarios, forecasting and modelling.

The course develops practical knowledge for implementing these practices. Students will develop the critical thinking skills to evaluate whether emerging practices are fit for purpose for use by different financial actors (banking, asset management, institutional investors) as well as for different mandates (impact-driven versus maximising financial returns).

The course builds on the Carbon Accounting course, using concepts introduced in the first semester to assess the exposure to climate-related risks and/or the consistency with national and international climate goals. The course complements and applies in part the concepts from the Climate Policy & Investment and Carbon Pricing course as carbon pricing is one of the principal policies and drivers behind different forms of climate-related risks. It also builds upon the International Climate Finance course as it explores how mandated financial institutions, ie those seeking to have a positive contribution to achieving climate-related goals, integrate this into their decision making strategies. It provides a complementary perspective to the Baseline-and-Credit course by introducing alternative methods of integrating climate change in to decision making. Finally, it is complementary to the Sustainable Finance course is complementary to the Sustainable Finance course, bringing a forward-looking perspective to the broader discussion of portfolio allocation.

Outline Content

1. Overview of the climate change investment and finance challenge - roles of public and private sector actors
2. Overview of the dominant logics for public and private sector finance and investment decision making
3. Climate investment decision making: principal components of decision-making toolkit (scenarios, modelling, taxonomies, etc.)
4. Overview of the current state of trends on climate-related risk management and Paris Alignment
5. Climate-related risks and the integration into investment & finance decision making
6. Critique of methodologies and resulting management strategies (such as divestment and tilting portfolios) with a focus on linking outcomes with impacts in the real economy.
7. Impact and 'alignment'-focused and integration into investment & finance decision making
8. Analysis of current initiatives and trends, such as the EU Sustainable Finance Taxonomy, the Taskforce for Climate-related Financial Disclosure and the MDB Joint Paris Alignment methodology, among others.

Student Learning Experience

The course will be taught through weekly lectures and will generally include a case study, group exercise or other interactive discussion component. The course will also include a small number of guest speakers. This provides useful real-world insights alongside the more theoretical aspects of the course.
Entry Requirements (not applicable to Visiting Students)
Pre-requisites Co-requisites
Prohibited Combinations Other requirements None
Course Delivery Information
Academic year 2024/25, Not available to visiting students (SS1) Quota:  None
Course Start Block 2 (Sem 1)
Timetable Timetable
Learning and Teaching activities (Further Info) Total Hours: 100 ( Lecture Hours 10, Seminar/Tutorial Hours 5, Programme Level Learning and Teaching Hours 2, Directed Learning and Independent Learning Hours 83 )
Assessment (Further Info) Written Exam 0 %, Coursework 100 %, Practical Exam 0 %
Additional Information (Assessment) 70% coursework (group) - Assesses all course Learning Outcomes
30% coursework (Individual) - Assesses course Learning Outcomes 1, 2
Feedback Formative: Feedback will be provided throughout the course.

Summative: Feedback will be provided on assessments within agreed deadlines.
No Exam Information
Learning Outcomes
On completion of this course, the student will be able to:
  1. Describe and critically evaluate the challenges and opportunities in using climate risk and alignment approaches in low-carbon, resilient investment.
  2. Understand and critically discuss the different types of financial institutional and individual investors: their business models, institutional framework, incentive structures and the role of low carbon/green investment opportunities on their dashboards.
  3. Understand and apply best practice for developing an investment proposal taking into account climate change impact outcomes.
Reading List
2DII. Tracking Real World Emissions Reductions The Missing Element in Portfolio Alignment and Net-Zero Target-Setting Approaches.; 2022. https://2degrees-investing.org/wp-content/uploads/2022/10/2DII_Real_final.pdf

Climate Finance Leadership Initiative. Unlocking Private Climate Finance in Emerging Markets: Private Sector Considerations for Policymakers.; 2021. https://assets.bbhub.io/company/sites/55/2021/03/CFLI_Private-Sector-Considerations-for-Policymakers-April-2021.pdf

Diener J. Impact case or impact washing? An analysis of investors strategies to influence corporate behavior. Sustainability accounting, management and policy journal (Print). 2023;14(5):1002-1021. doi:10.1108/SAMPJ-02-2022-0088

GFANZ. Measuring Portfolio Alignment: Driving Enhancement, Convergence, and Adoption.; 2022. https://assets.bbhub.io/company/sites/63/2022/09/Measuring-Portfolio-Alignment-Enhancement-Convergence-and-Adoption-November-2022.pdf

IIGCC. Net Zero Investment Framework Implementation Guide.; 2021. https://www.iigcc.org/resources/net-zero-investment-framework-implementation-guide

K├Âlbel JF, Heeb F, Paetzold F, Busch T. Can Sustainable Investing Save the World? Reviewing the Mechanisms of Investor Impact. Esty D, Cort T, eds. Organization & environment. 2020;33(4):554-574. doi:10.1177/1086026620919202

TCFD. TCFD Overview 2022.; 2022. https://assets.bbhub.io/company/sites/60/2022/12/tcfd-2022-overview-booklet.pdf

NGFS. Climate Scenarios for Central Banks and Supervisors.; 2023. https://www.ngfs.net/sites/default/files/medias/documents/ngfs_climate_scenarios_for_central_banks_and_supervisors_phase_iv.pdf
Additional Information
Graduate Attributes and Skills Practice: Applied Knowledge, Skills and Understanding

After completing this course, students should be able to:

Apply creative, innovative, entrepreneurial, sustainable and responsible business solutions to address social, economic and environmental global challenges.

Work with a variety of organisations, their stakeholders, and the communities they serve - learning from them, and aiding them to achieve responsible, sustainable and enterprising solutions to complex problems.

Communication, ICT, and Numeracy Skills

After completing this course, students should be able to:

Convey meaning and message through a wide range of communication tools, including digital technology and social media; to understand how to use these tools to communicate in ways that sustain positive and responsible relationships.

Critically evaluate and present digital and other sources, research methods, data and information; discern their limitations, accuracy, validity, reliability and suitability; and apply responsibly in a wide variety of organisational contexts.

Cognitive Skills

After completing this course, students should be able to:

Be self-motivated; curious; show initiative; set, achieve and surpass goals; as well as demonstrating adaptability, capable of handling complexity and ambiguity, with a willingness to learn; as well as being able to
demonstrate the use digital and other tools to carry out tasks effectively, productively, and with attention to quality.

Knowledge and Understanding

After completing this course, students should be able to:

Demonstrate a thorough knowledge and understanding of contemporary organisational disciplines; comprehend the role of business within the contemporary world; and critically evaluate and synthesise primary
and secondary research and sources of evidence in order to make, and present, well informed and transparent organisation-related decisions, which have a positive global impact.

Identify, define and analyse theoretical and applied business and management problems, and develop approaches, informed by an understanding of appropriate quantitative and/or qualitative techniques, to explore and solve them responsibly.

KeywordsNot entered
Contacts
Course organiserDr Ian Cochran
Tel: (0131 6)50 9295
Email: Ian.Cochran@ed.ac.uk
Course secretaryMr Pete Park
Tel:
Email: Pete.Park@ed.ac.uk
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