Singapore University of Social Sciences

This course ESG517 Environmental Economics and Sustainable Finance examines finance from the perspectives of banks. On the one hand, banks have extended loans to businesses that are exposed to not only physical climate change risks but also indirect risks such as stranded assets as the world transitions from brown to green. We will learn about climate stress testing to quantify the value at risk for a bank’s loan assets and the channels through which such value destruction can occur. On the other hand, banks are well-positioned to catalyse the transition to green by funding enabling activities. We will cover the major taxonomies that help to classify activities so that funds can be channelled to the right efforts. We will also study the features of the different types of sustainable financing instruments and the key principles and standards on which they are based. Finally, we will explore the role of technology in combating greenwashing and facilitating green and transition finance.