Tracking Sustainability Performance: Analytical Approaches and Challenges

This course introduces students to the latest developments in the analytical approaches to corporate strategy and investment decisions, integrating environmental, social, and governance (ESG) data. The course aims to answer the question of what is a sustainable company, and explores the question with data and analytics. The course takes a hands-on approach to assessing the difference between voluntary and mandatory frameworks that guide corporate sustainability reporting, including Global Reporting Initiative, Sustainability Accounting Standards Board/International Sustainability Standards Board, and Task Force for Climate-related Financial Disclosures, and recent mandatory disclosure requirements in the European Union, California, and other jurisdictions. The limitations of voluntary self-disclosure are debated within the context of greenwashing criticism and increased scrutiny of ESG ratings, green bonds, and net-zero target setting. ESG materiality as part of corporate disclosure is probed with reference to double materiality. The scientific basis for evaluating corporate sustainability is explored via impact measurement, net-zero target setting, and asset-level ESG risk analysis. Students learn about various roles in the sustainability reporting ecosystem, from corporate to auditor and investor perspectives, and the ESG tools and data used by each role along with the potential for artificial intelligence (A) applications. For their final project students—working in teams—have the choice to develop a corporate net-zero strategy that is scientifically credible and technologically feasible or to develop a sustainable investment strategy that creatively uses data available with a specific sustainability goal (ESG integration, ESG engagement, or sustainable impact). The course is by intention highly interactive with in-class activities and emphasizes teamwork, critical thinking, and peer review. Students are expected to manipulate data using Excel. Templates and explanations are provided.