Achieving the climate targets of the Paris Agreement requires both a massive scaling up of investments in low-carbon energy technologies and sectors of economic activities, and divesting from high carbon technologies and sectors. Nevertheless, investments and financial portfolios are still highly exposed to activities that are not aligned to the climate targets. In this context, a disorderly transition to a low-carbon economy, i.e. a sudden introduction of climate policies (e.g. carbon tax) that cannot be fully anticipated by investors, could lead to asset price volatility and financial instability. In addition, the characteristics of interconnectedness and complexity of the financial sector could amplify losses, with implications on systemic risk.

The course focuses on the role that business and finance could play, either as an enabler or a barrier, in the low-carbon transition, providing a comprehensive overview of the interaction between climate change and the financial sector.

In particular, we will:

- Analyse the characteristics of climate change physical and transition risks, the climate scenarios and shocks produced with climate economic models (e.g. Integrated Assessment Models) reviewed in the IPCC report;

- Identify the political and market conditions for carbon stranded assets to emerge in the economy and finance;

- Compare the features and limitations of main methodologies, taxonomies and rating criteria to assess the carbon intensity and climate relevance of individual economic activities, including issues related to greenwashing;

- Discuss the challenges to move from an economic classification of firms (e.g. NACE) to a climate financial risk classification;

- Present science-based and practitioners’ metrics and methods to integrate forward-looking climate risks into financial risk assessment, i.e. Climate Value at Risk and Expected Shortfall, Climate Spread, Climate Stress-test based on financial valuation in network models;

- Present the most relevant initiatives implemented by central banks, financial regulators and supervisors to foster climate-related financial disclosure and assessment of investors' portfolios.

The course will use a mix of theoretical concepts, empirical analysis and real-world case-studies.

After completing a ZuWi II course the students are aware of the social and environmental context of economic activities. They have a holistic perspective, seeing both the economy and society as embedded in biophysical systems. They understand the effects business has on these dimensions. Throughout the course, students learn to take into account the impact of their later actions on society and the natural environment, their social responsibility and their contribution to a long-termsustainable development. Students develop the ability to consider ethical, social and environmental issues implied in their decisions in both private and professional spheres. They acquire skills such as self-reflection, openness and sensitivity to diversity, and understanding of complexity. They learn to conduct team projects effectively, to listen attentively and to present their ideas in convincing ways. Having completed the course, they are able to process information, to understand ideas and problems, to develop solutions and to communicate them to both expert and non-expert audiences.

Extensive feedback from both the course instructors and peers helps students to understand their shortcomings and to improve.

According to the didactic orientation performance will be evaluated multidimensionally. At least 3 criteria are to be considered in the assessment (e.g. presentation + partiicpation/quizzes + final exam including a critical essay). Particular emphasis is placed on teamwork skills and reflective thinking and experiential knowledge.

By the end of the 'Finance and Sustainability' course, students will have developed an in-depth understanding of the links between financial, socioeconomic and environmental systems. They will be able to understand and comment on current news and research on the topic, and connecting them to the business, policy and academic debate. The course aims at being useful to both students interested in developing theoretical/applied research on these topics and students interested in developing hands-on knowledge to look for a job in the sector.

Examination-immanent courses (PI) have compulsory attendance.
In case of absence the lecturer is to be informed in advance if possible.
More detailed regulations on absenteeism will be explained in the first unit.

The course will be divided into two main parts:

• Frontal teaching by the lecturer.
• Student-led part: students' presentations, exercises, collective discussion, Q&A

Students will be graded as follows:

• Work in group project and presentation (30%)
• Final exam (70%)

Course enrollment is on the basis of "first-come, first-served” principle. If you have registered but cannot participate in the course, please de-register via LPIS during the registration period so that your course is available to students on the waiting list.

If there is a waiting list for enrollment in the course, students at the waiting list will be notified after the end of the enrollment period, and will be allocated to available places. Students will be ranked by their study progress not by their rank on the waiting list.

This procedure, however, is not to be understood as a place guarantee!

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After each class, 16-17