Sustainable Investment: Integrating ESG Analysis with Financial Returns

Introduction:

During the Sustainable Investment: Integrating ESG Analysis with Financial Returns course, participants will gain a solid understanding of the fundamentals of ESG investing, which is guided by social, environmental, and governance principles. This approach emphasizes responsible investing by selecting enterprises that not only avoid social harm but actively contribute to positive social and environmental outcomes. Central to this course is value-based investing, which extends beyond traditional security analysis by integrating ESG factors into investment decision-making.

Conversely, values-based investing involves making investment decisions based on an investor’s personal preferences, such as favoring or avoiding companies based on their activities. This course will explore these differing approaches and focus on the practical application of ESG factors. Participants will develop skills in ESG financial planning, learn how investments are made based on ESG analysis, and understand how ESG reporting fosters corporate transparency and serves stakeholders.

This course will prepare participants to become effective practitioners with a strong emphasis on ESG financial analysis, enabling them to assess a company's ESG performance and understand its implications for long-term viability and profitability. Participants will gain insight into the importance of ESG principles and how combining ESG and sustainable investing strategies can enhance market stability and create long-term value.

Throughout the training, participants will delve into all aspects of ESG, recognizing its importance as a tool for sustainable investment that enhances financial performance while ensuring environmental protection.

Objectives:

At the conclusion of this Sustainable Investment: Integrating ESG Analysis with Financial Returns course, participants will be able to:

• Use exclusionary tactics to identify the negatives and positives in investments.
• Apply best practice exclusionary methods.
• Incorporate ESG considerations into traditional investment decision-making processes.
• Utilize portfolio shift strategies.
• Identify investments with risk factors or risk premiums that can contribute to profitability.
• Evaluate systemic risk related to ESG factors and allocate investments accordingly.
• Focus on thematic investing as a primary strategy.

Training Methodology:

• Exercises involving ESG data analysis
• Projects with practical market applications
• Collaboration with fellow participants
• Instructor-led demonstrations
• Concept clarification sessions

Course Outline:

Unit 1: Introduction to ESG Analysis and Its Impact on Financial Profitability

• Negative aspects of capitalism and production on society and the global environment.
• Five theories on managerial roles, responsibilities, and actions:
  • Government and international regulation: The UNFCC
  • The Kyoto Protocol: Clean development mechanisms for emissions trading and carbon reduction
  • The Paris Agreement on climate change
  • Decade of action on the 2030 Agenda and Sustainable Development Goals
• Corporate arguments: Groupings and frameworks of industries and financials

Unit 2: Practical Aspects of ESG in Sustainable Investment Decisions

• Concept integration: ESG
• ESG evaluation: Typology and rationale behind the methods
• The use of ESG ratings: Categories for investment and other sustainable practices

Unit 3: Strategic ESG Investing – Is It Profitable?

• Market perspective: Time series indicators
• Credit risks: Assessing pollution and other ESG factors – A review of recent literature
• Internal perspective: Effects on corporate intangibles:
  • Net sales
  • Operating expenses
  • Financial expenses and DCF valuation
• Transaction perspective: Impact on relative valuation

Unit 4: Understanding the Positive Relationship between ESG-Sustainable Finance and Financial Performance

• Portfolio characteristics:
  • Companies
  • Data
  • Methodology
  • Results

Unit 5: Portfolio Characteristics – Funds

• Data
• Methodology
• Results