Insights of the Frankfurt School of Finance Programme: Certified Expert in Sustainable Finance

Insights of the Frankfurt School of Finance Programme: Certified Expert in Sustainable Finance

First weeks of Learning by Esther Meyer, Fondation de Luxembourg

An introduction.

As part of the scholarship programme, I´m attending the online course of Frankfurt School “Certified Expert in Sustainable Finance” programme.

By participating in the programme it is my intention to get a deep insight into our “future” world and economy where sustainability and sustainable finance play a more and more important role. I´m looking forward to the topics closely related to inclusive finance which I expect in chapter three when we look into the sustainable financial products.

I will update you on a regular basis on the programme and the content of my studies.

The programme is structured in eight units plus an assignment and a final exam at the end of the half-year programme. Focus is on:

  • Sustainable finance – the transformation from niche to mainstream
  • The financial sector-enabling the transformation
  • Sustainable financial products
  • Sustainable investment strategies and methodologies
  • ESG data
  • ESG labels and ratings
  • Climate scenario analysis
  • Case studies

After an introduction to the programme the scene is set and unit one starts with a review of the history of sustainability, the key definitions and an overview of the most important organisations and initiatives in this field.

The way from Corporate Social Responsibility with some minor single activities in a company back in the 1950s to one of the dominant topics and influence factors on corporate strategies today is outlined.

Focus is on the worldwide climate change and the severe impacts, which is very relevant for investors and the financial industry. Next to the potentially calculable financial and operational risks, the impact on reputational risks is hardly foreseeable.

For me, the most inspiring part of unit one is a video of a speech of former US Vice President Al Gore back in 2016 “The case for optimism on climate change”. He is not at all trying to whitewash the very serious situation we are in because of the climate change but is still able to demonstrate that there is hope to limit the dimension of climate change and the related impact.

Unit 2, which I successfully finalized today, focuses on the financial sector as enabler for the transformation. The objective of this section is to understand the basis functioning of the financial system and how the financial system can trigger structural change in the economy.

Prof Dr Ulf Moslener illustrates in his presentation the economic side of sustainable finance by explaining the financial system with the financial markets and its segments money market, capital market, FX markets and the respective characteristics of the segments.

He concludes in his presentation, that there are two approaches to achieve a more sustainable economic system:

  1. The mainstream approach = Improve functioning of the financial market and real economy separately
  2. The ambitious approach = Optimise the financial market and real economy as a joint system

Furthermore, market inefficiencies related to climate change are discussed. Spotlight is on regulatory instruments that could be applied to integrate sustainability aspects and provide the necessary market transparency in the financial sector such as Taxonomies, Disclosure Duties, Investors´ fiduciary duties and consumer transparency.

The unit closes with an overview about recent regulatory developments.

Next time you will read about the next units and I will as well provide some more insight to the programme.

Author: Esther Meyer