Syllabus on how we teach Sustainable Investing class @ Brown University
ENVS 1545: The Theory and Practice of Sustainable Investing
Course description:
21st century investors, and the companies they invest in, face a deepening array of Environmental, Social, and Governance (ESG) challenges. Climate change, water scarcity, community conflict and inequality, resource depletion, supply chain breakdowns, worker well-being and diversity are all seen as increasingly material opportunities for successful corporations, investors and countries to manage for.
This course will couple theory with the practice of Sustainable Investing. We will examine current ESG investment and corporate strategies, industry and other trends, future scenarios, players in the field and evolving frameworks, while integrating theory with practical investment performance analysis, metrics, and studies of data, screens, asset classes and diversification. The course maximizes student interaction with industry leaders and is taught through a mix of case studies, analyst reports, lectures and interactive discussions. Previous iterations of this class allowed students to build their understanding of sustainable investing and put this directly into practice, as students analyzed and recommended strategies and fund managers for partnership with the new Brown University Sustainable Investment Fund option for donors to the Brown Endowment, as well as developing stock pitches for possible direct investment as concentrated positions.
During this class, students will have a chance to follow a similar path, reviewing the choices made to date, providing updated recommendations and performing analysis on what Brown might otherwise consider as an investing institution across asset class. Students of all disciplines interested in the fields of investment and environmental/social policy are encouraged to attend the mandatory first day of class. This course is designed to be accessible to those with varying levels of knowledge of financial markets and economics backgrounds. Though there are high expectations for the quality of final stock pitches, mentoring and resources are readily available from the instructors and teaching assistants. The course will be capped at 36 students.
Course objectives: The objective of the course is to provide students with a firm grounding in a full range of pressing ESG concerns and a toolkit of investment solutions.
Specifically, The Theory and Practice of Sustainable Investing objectives are:
● Understand the theoretical relationship between finance and sustainability.
● Understand fiduciary duty of investors and how the Brown Investment Office and other university endowments manage for this.
● Connect students with industry-specific resources, including industry experts, latest research, tools.
● Review and construct a real SI portfolio, the Brown University Sustainable Investment Fund.
● Consider and explore other possible investment action Brown might consider across asset class.
Lecturer: Cary Krosinsky; cary_krosinsky@brown.edu
Guest speakers in past iterations of this course have included:
- Sophie Purdom ’16, Bain & Company/Kula Bio
- David Richardson ’08 (DR), Vision Ridge
- Jules Kortenhorst, CEO, Rocky Mountain Institute
- Surya Kolluri, Bank of America Merrill Lynch
- Joshua Kennedy ’97, Brown Investment Office
- Robby Klaber ’07, Parnassus Investments
- Barbara Tannenbaum, Brown University
- Seth Magaziner ‘06, Treasurer of the State of Rhode Island
- Jane Dietze, Brown Investment Office
Additional potential guest speakers this semester include Barrett Hazeltine (confirmed) as well as other possible prominent speakers such as Secretary of State John Kerry, Kerry Kennedy and Dr. Ma Jun of the People’s Bank of China and others as listed within individual class sessions below, to be updated as we receive further confirmation.
Readings:
Required: Krosinsky/Purdom ISBN 9781138678613
● Krosinsky, Purdom, Sustainable Investing: Revolutions in Theory and Practice, Routledge 2017
Required: Available on reserve at the Rockefeller Library:
● Meadows, Thinking in Systems: A Primer, Sustainability Institute, 2008.
Specific Chapters Required: Available online through Josiah:
● Krosinsky, Robins, and Viederman, Evolutions in Sustainable Investing: Strategies, Funds and
Thought Leadership, Wiley 2011.
Specific Chapters Required: Available on reserve at the Rockefeller Library:
● Krosinsky, Cort, Sustainable Innovation and Impact, Routledge, 2018.
Required Case studies:
● Sucher, Beyersdorfer, and Jensen, “Generation Investment Management,”
HBS No. 9-609-057, 2009.
Optional/Recommended Case studies:
● Bebb, Reichelstein, “Sustainable Investing at Generation Investment Management,”
Stanford Business No. SM-257, 2016.
● Eccles, Serafeim, Clay, “KKR: Leveraging Sustainability”, HBS No. 9-112-032, Revised 2012
All other readings listed on the syllabus can be accessed online through hyperlinks or will be provided as attachments.
Assignments:
● Investor compare and contrast: short response paper (due 9/17) – 10%
○ Select three investors from the Evolutions readings or similar
○ Compare and contrast their approaches, successes, challenges, etc. and if using the Evolutions book, see if you can find out how your chosen managers are doing today
○ Of the investors you chose to analyze, which do you find the most effective and why?
● In-class writing assignments (9/10 and 11/21) – 5% each
● Midterm: Option #1 – Quantitative Option – ESG Fund Manager Project (due 10/27) – 25%
○ Select 6 Fund Managers, compare them qualitatively, choose 3 to provide more detailed qualitative and quantitative profiles
○ Choose one or more hypothesis and test them out using ESG Analytics data and financial criteria
○ Recommend specific funds based on your findings
● Midterm: Option #2 – Qualitative Options – Paper (due 10/27)
○ Suggest a solution to an unsolved ESG problem – options include corporate strategy, investor strategy, policy – special request for 2018 involved performing a climate risk/stranded assets analysis & TCFD preparation papers requested by the Brown Investment Office, similar expected for 2019 (min. 10 page paper)
● Elevator pitch: 1-2 PPT slides (to be presented in class 10/31) – 5%
○ Analyze one publicly listed company of choice, and discuss why it is well-positioned for success.
○ Why should a sustainable investor consider adding it to his/her portfolio?
● Sustainable Investment Fund pitch:
○ Progress pitch: ~8-10 PPT draft slides (early/mid Nov)
■ Work in groups of 3 students, select one publicly listed company that would make a strong addition to the Sustainable Investment Fund (these can be sourced from the elevator pitch assignment.)
■ Outline the stock pitch presentation in “blank slide” format.
○ Final presentation: PPT presentation (to be delivered during final classes as below) – 30%
■ Expand on the progress pitch to deliver a roughly 10 slide investment pitch including working with your assigned industry mentor
■ Success will be determined by group’s presentation and Q&A performance in achieving the company being potentially added to our Sustainable Investment portfolio. Best 5 final presentations to be provided to the Brown Endowment for their review and consideration.