This course explores Impact Investing, a discipline that seeks to generate social benefits as well as financial returns. From tiny beginnings, the Impact Investment space has expanded and now commands significant attention from policymakers, wealthy and public-spirited individuals, academia and, not least, the world’s largest asset managers and philanthropic foundations. Evangelists believe it may be the key to freeing the world from poverty. Skeptics think it will remain confined to the boutique. Regardless, Impact Investing is becoming a distinct career specialization for finance professionals despite the diverse skillset each must have and the uncertainty of the new field’s growth. In addition to prerequisites, FNCE 2050 is recommended but not required.
Climate change represents one of the most urgent threats to humanity’s future. Transforming the global economy to manage this threat will require trillions of dollars in capital, creating unprecedented risks as well as opportunities in financial markets. This course uses the tools of financial economics to understand strategies for managing risks and financing climate technologies across a range of asset classes, including carbon markets, project finance, venture capital, private equity, public equities, fixed income, and real assets. Students will also explore how financing strategies interact with public policy and political risk in both the developed and emerging market contexts. The course concludes with debates on corporate purpose, including what role businesses and financial institutions should play in addressing climate change.