Sustainable Investing and Green Finance - MAN00042I

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Related modules

Pre-requisite modules

• Finance Fundamentals (MAN00026C)
• Data Analytics for Accounting and Finance (MAN00041I)

Module will run

Occurrence	Teaching period
A	Semester 2 2026-27

Module aims

The module aims to provide students with an in-depth understanding of many aspects of sustainable finance and investment and a rounded perspective on the rapidly changing dynamics of the financial sector. The focus on sustainable investment is designed to deepen students' awareness of climate, environmental, and social sustainability factors, fostering an appreciation for the intricacies of responsible financial practices. The module analyses the range of sustainable products available to sustainable investors and highlights the differences between traditional and green and sustainable instruments. The exploration continues into advanced concepts, encompassing efficient diversification, asset allocation strategies, asset pricing models, and portfolio performance valuation. The module also delves into some of the distinctive features of short- and long-term Islamic finance and provides an understanding of Islamic financial instruments. The overarching aim is to prepare students for the complexities of the finance industry by fostering a comprehensive understanding of sustainable finance principles and practices, encompassing theoretical foundations and practical applications across diverse financial instruments.

Module learning outcomes

After successful completion of the module students will able to: Subject content: - Understand the fundamentals of sustainable finance and investment - Deepen awareness of climate, environmental, and social sustainability factors, fostering an understanding of responsible financial practices within the context of sustainable investment. - Outline the variety of financial products accessible to green and sustainable finance investors. - Understand and critically discuss issues related to investment selection and portfolio construction - Construct portfolios and evaluate portfolio performance from the perspective of sustainable investing. - Acquire insights into the principles of short- and long-term Islamic finance, encompassing an understanding of Islamic financial instruments and their governing principles. - Explore key areas of financial advice, comprehending the financial advice process and legal concepts within the framework of financial advice. - Use databases to collect and organise some of the financial data which is used in practice by investors. Academic and graduate skills - Advanced subject specific knowledge and understanding - Cognitive (thinking) skills: through self-study and assessments - Analytical skills required to undertake finance calculations and/or estimations. - Communication: via written assignments, online discussion boards, virtual study groups and tutorials; - Ability to conduct research into financial issues individually through data collection, analysis, synthesis and reporting.

Module content

1. What is sustainable finance and investment, and why does it matter? Financial and other objectives of profit and non-profit organisations. Explain the planet’s social and environmental challenges; the transition of the economic system; the main functions of the financial system and how to apply them to sustainability; and the various stages of sustainable finance. 2. Sustainable Equity Discuss the importance of sustainability in equities, emphasising its potential to improve both financial and non-financial returns. Explore the integration of sustainability into equity investing, highlighting the compatibility of fundamental equity investing with (ESG) factors compared to quantitative and passive investment approaches. Clarify that impact investing represents an advanced form of ESG integration, prioritising societal impact as the primary selection criterion. 3. Sustainable: Bonds Describe the range of debt products available to green and sustainable finance investors. Describe green and sustainable bonds' main types and features, including green sukuk. Explain ‘Green Bond, ’ ‘Social Bond’, and ‘Sustainability-Sustainability linked lending. 4. Sustainable Banking: New form of lending Explain the role of banks in screening and monitoring (potential) borrowers; explain the relevance of sustainability for banking; understand how ESG risks can be incorporated in the credit risk assessment; list the barriers and incentives to sustainable lending; understand the various forms of impact lending and micro nance. 5. Efficient Diversification Portfolio risk, asset allocation with stock, bonds and bills, the Markowitz portfolio optimisation model. 6. Single index model, CAPM and ESG-CAPM 7. Multi-factor models and APT 8. Portfolio Performance Valuation and sustainability Traditional portfolio performance measures and if sustainable Investing Hamper or Help Performance. 9. Short- and long-term Islamic finance Identify and discuss methods of raising short- and long-term Islamic finance, including i) major differences between Islamic finance and the other forms of business finance. ii) the concept of riba (interest) and how returns are made by Islamic financial securities. ii) Islamic financial instruments available to businesses, including: i) murabaha (trade credit) ii) ijara (lease finance) iii)mudaraba (equity finance) iv) sukuk (debt finance) v) musharaka (venture capital) (note: calculations are not required). 10. Financial Advice The main areas of financial advice, the financial advice process and the legal concepts.

Indicative assessment

Task	% of module mark
Closed/in-person Exam (Centrally scheduled)	70.0
Essay/coursework	30.0

Special assessment rules

None

Indicative reassessment

Task	% of module mark
Closed/in-person Exam (Centrally scheduled)	70.0
Essay/coursework	30.0

Module feedback

Students will receive written guidance on seminar questions/tasks at the end of seminar sessions. The module tutors are available to meet with students, providing personal feedback and additional assistance. Module assessment reports are written by the module leader for all assessments and placed on the VLE after the Board of Examination. Feedback and the timescale for the return of feedback will be given in accordance with the University Policy on feedback and in line with the School policy.

Indicative reading

Essential reading:

Bodie, Z. and Kane, A., 2020. Investments. McGraw-Hill Schoenmaker, D., & Schramade, W. (2018).

Principles of sustainable finance. Oxford University Press. (SS)