Overview

In this course, you will analyze the importance of assessing stakeholder interest or salience in different ESG factors and industry variances. You will also evaluate the importance of ESG factors in your investment decisions, including how you can use them to create socially responsible portfolios with better-than-average returns. You will also examine the risks associated with ESG investing and how they can affect the corporation’s profitability. Next, you will review the concepts of positive and negative screening and identify the ESG factors that cause investors to divest from or negatively screen certain assets. You will review ESG risks associated with climate, diversity, executive compensation, governance issues, and evaluate how corporate performance and stock prices correlate to ESG scores. You will also examine how ESG adoption could accelerate the growing trend of fossil fuel divestment, its minimal impact on returns, and what this means long term. Finally, you will analyze quantitative and qualitative measurements and explore different protocols, such as MSCI, to evaluate and provide ESG ratings that can affect stakeholder and investor interest. By the end of this course, you will have explored how ESG investing has grown, assessed the variety of ways it has been integrated into the market, and analyzed the complex indexing and measurement techniques employed in the ESG space today.

Syllabus

Module 1

In this module, you will explore how an investor can use ESG factors to maximize positive returns and minimize downside risks. You will examine the significance of screening stocks with ESG factors to inform portfolio construction as well as the relative significance of positive versus negative screening. You will analyze the importance of assessing stakeholder interest or salience in different ESG factors and industry variances. Next, you will assess the importance of ESG factors in your investment decisions, including how they can be used to create socially responsible portfolios with better-than-average returns. By the end of this module, you will have identified the best methods of screening stocks to account for ESG factors, the costs associated with ESG strategies, and the importance of diversification.

Module 2

In this module, you will explore the complex relationship between ESG and the stock market, from the inclusion of companies with a large ESG profile to the exclusion of those that refuse to adopt a green agenda. You will also assess the risks associated with ESG investing, and how it can affect a company's profitability. Next, you will examine how to avoid greenwashing by measuring the impact of a corporation’s green initiatives through inclusionary screening. You will review ESG risks associated with climate, diversity, executive compensation, and governance issues, and will examine how corporate performance and stock prices correlate to ESG scores. By the end of this module, you will have differentiated between ESG exclusion and inclusion of companies, identified how to avoid greenwashing and measuring corporate social impact, and reviewed the influence of ESG risk factors on stock prices, including their relationship to ESG scores and their impact on pension plans.

Module 3

In this module, you will analyze the upward growth curve of ESG incorporation over the last 15 years as well as the main types of assets that are driving this growth. You will also review the motivating ESG factors that cause investors to divest from or negatively screen certain assets. You will also assess the way that large investment firms such as BlackRock, Fidelity, and Vanguard are engaging with ESG initiatives and making sustainability a prominent driver in their investment selections. Lastly, you will examine how ESG adoption could be accelerating the growing trend of fossil fuel divestment, its minimal impact on returns, and what this means long term. By the end of this module, you will have analyzed ESG incorporation and its driving factors, reviewed educational institution endowments’ growing ESG investment commitments, and examined the rise of fossil fuel divestment and why this matters.

Module 4

In this module, you will assess the various methods for measuring and indexing ESG factors in the investing space, the inherent challenges in calculating these values, and how to go about overcoming these challenges. You will examine how ESG indices are created, how firms can evaluate their efficacy, and how the creation of a sustainability index has made impact measurement easier to gauge. Next, you will analyze quantitative and qualitative measurements, and explore different protocols, such as MSCI, to evaluate and provide ESG ratings. Finally, you will assess the various tools that you can use to measure ESG investments and how they compare to one another. By the end of this course, you will have differentiated between how investors can use these tools to monitor ESG practices and build indexes that better align with their values.