Making the Sustainable Investment Case

Making the sustainable investment case is a crucial skill for every type of professional, whether in the private, public, or not-for-profit sectors. This course takes lessons from the theories and practices of sustainable investment in the professional investment industry and makes them accessible to other disciplines and fields. Every investment has implicit environmental, social, and governance (ESG) factors, because every decision made relies upon humans to make, do, buy, or sell something, and relies upon the rule of law to govern contractual relationships between businesses and protect minority investors. In every sector and situation, one is increasingly expected to identify, measure, and report material ESG risks, returns, and impact. Investment decisions are made daily for more than US $100 trillion in assets under management professionally in the global investment industry. Bloomberg Intelligence forecasts investment decisions explicitly including ESG factors will reach, "US $35 trillion assets under management by 2030...factoring in an 85% growth slowdown, showing resilience against a widening backlash". The headwinds from political regimes have had an impact, but the field still grows, especially in Europe and Asia-Pacific. This course explores capital allocation decisions more broadly, translating the practices from the investment context to other situations of capital allocation. In a world with interconnected decision-making processes and consequences, more stakeholders demand greater transparency, customers have expectations of their vendors, reputation and litigation risks are profligate, and regulators seek to reduce negative impacts on society. Sustainable investment proactively considers themes and issues such as climate pollution, workplace safety, employee health and wellness, local community relationships, diversity, executive compensation, business ethics, corruption, and new markets for zero pollution innovation. Climate is the meta-theme overarching all investment strategies. This course is grounded in industry experience and cross-disciplinary academic and practitioner literature. We employ the Socratic method, empowering students to express their agency in covering the materials. We blend practitioner literature with current academic research to ensure students learn from the most relevant material, including Harvard Business School case studies, case examples drawn from the food and beverage sector, and expose students to current practice in Fund Labs (beta) with sustainable investment fund managers. We explore critiques of sustainable investment to better understand the gaps in theory and practice. We provide access to experts from across the spectrum so students may learn from multiple perspectives and engage with different roles. We promote students' experiential learning by building up components of simulated investment recommendations.