Předměty

Sustainable finance and ESG are rapidly growing phenomena in modern finance, spanning across asset pricing, banking, corporate finance, and corporate governance. In this course, we introduce into main terms, topics, instruments, trends, and issues in sustainable finance and ESG. We will cover reporting, indexing, and risk management. Our focus will be on both green and sustainable bonds and ESG investing. Additionally, we cover the recent theory and evidence on both financial and real consequences of sustainable finance in economies where investors, workers, and consumers have heterogeneous views over the value and impact of ESG.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (29.09.2025)

Having passed the course, the students will be able to

Evaluate sustainability and ESG metrics and indices
Apply the essentials of carbon footprint reporting methodology (especially the GHG protocol)
Build a credit-risk scoring model with the ESG data
Understand the construction of green and sustainable products, including ESG portfolios
Describe and analyze the market-wide consequences of ESG investing

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (17.09.2025)

30% assignment
15% attendance (2 guest lectures, 3 presentation sessions)
30% presentation of a selected academic paper (6 teams per 3 students)
25% final test (40 minutes), covering all material from the lectures and main results from all presented papers (cumulative, closed book, in Moodle with your notebooks)

If you are an international exchange student and need to take an early exam (as you will be leaving Prague and not returning in January), please let us know as soon as possible.

Assignments

Assignment: Risk Management with Proprietary ESG Data (20%)

You will receive instructions by email. The assignment must be submitted to Moodle on time!

Presentations

You are expected to create a team of 3 members and prepare the presentation together.
Please choose a paper from the list on the course webpage or find another recent paper with a similar level of analysis (you may use the links provided on the course webpage).
Please send the names of the team members and the proposed paper by email to Martin Gregor (martin.gregor@fsv.cuni.cz) with the title “JEM339 Team” by Thursday, October 16. Put the emails of all team members into CC.
Wait for confirmation by email. The first-come-first-serve rule applies. Be ready to have an alternative paper in the case your paper is not eligible or is already taken by another team.
Our goal is to complete the list by October 21.

Guide for presentations

Your team has 25 minutes for the presentation. The presentation can be interrupted by clarifying questions from the audience.
The papers are very complex: We recommend focusing on the main (narrow) message and covering only those details that can be thoroughly explained.
Please practice before the talk to learn how to manage time.
It is good if the team members can follow up on parts presented by other members, but in the interest of time, avoid being repetitive (especially in the survey part).
Think about the best way to explicitly refer to the content of the lectures.
You are restricted to a maximum of 30 slides.
On the course page, we provide a template for a presentation, but your team can, of course, change it depending on the content of the paper.
The discussion is approximately 10-15 minutes. We ask all students to be active during discussions.
Be ready and able to answer even the trickiest questions.

Evaluating presentations

25% Introduction, Motivation, Background (Parts I-III) - Is the key problem in the paper clearly explained? Is the problem sufficiently well-motivated?
25% Methods (Parts IV-V) - Is it clearly explained how exactly the problem is solved/addressed in the paper? Is the method introduced in an accessible way?
25% Results and Interpretation (Parts VI-VII) - Are results clear and unambiguous? Is there a discussion of robustness? Is it explained how the paper fits the broader literature in economics and finance?
25% Questions - Are questions addressed satisfactorily and succinctly?

Final exam

The exam is always in Room 105. Please arrive at least 5 minutes before the exam. Bring your own laptop.

16 December 15:30 (early exam)
7 January 14:00
27 January 11:00
3 February 11:00

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (01.12.2025)

A few copies of the books are available in the Opletalova library; try also online access through: https://knihovna.fsv.cuni.cz

Aracil, E., & Sancak, I. (eds.). (2023). Essential Concepts of Sustainable Finance: An AZ Guide. Taylor & Francis.
CFA Institute (2024). Certificate in ESG Investing Curriculum: ESG Investing Official Training Manual, CFA Institute.
Keeley, T. (2023). Sustainable: Moving Beyond ESG to Impact Investing. New York: Columbia Business School Publishing.
Kräussl, R., Oladiran, T., Stefanova, D. (2024). A review on ESG investing: Investors’ expectations, beliefs and perceptions. Journal of Economic Surveys, 38, 476–502.
Madera, S. (2024). Navigating Sustainability Data: How Organizations Can Use ESG Data to Secure Their Future. Kogan Page Limited.
Matos, P. (2020). ESG and responsible institutional investing around the world: A critical review. CFA Institute Research Foundation.
Pastor, L., Stambaugh, R. F., & Taylor, L. A. (2024). Sustainable Investing. Chicago Booth Research Paper. Available at SSRN: https://ssrn.com/abstract=5045806
Purcell, K., Vivari, B. (2023). Sustainable Investing: An ESG Starter Kit for Everyday Investors. Business Expert Press.
Schoenmaker, D., Schramade, W. (2021). Principles of sustainable finance. Oxford University Press.
Shmatov, C., Castelli, C. R. (2022). Quantitative methods for ESG finance. John Wiley & Sons.
Starks, L. T. (2023). Presidential address: Sustainable finance and ESG issues—Value versus values. The Journal of Finance, 78(4), 1837-1872.
Thompson, S. (2023). Green and sustainable finance: principles and practice. 2nd edition, London: Kogan Page.

Proposed Topics for Presentations

ESG Ratings: Retail Investors

Berg, F., Koelbel, J. F., Rigobon, R. (2022). Aggregate confusion: The divergence of ESG ratings. Review of Finance, 26(6), 1315-1344.
Moss, A., Naughton, J. P., Wang, C. (2024). The irrelevance of environmental, social, and governance disclosure to retail investors. Management Science, 70(4), 2626-2644.
Li, W., Watts, E.M., Zhu, C. (2024). Retail investors and ESG news. Journal of Accounting and Economics, 101719. https://doi.org/10.1016/j.jacceco.2024.101719 + discussion at: Sloan, R. G. (2024). Retail investors and ESG news: A discussion. Journal of Accounting and Economics, 101730. https://doi.org/10.1016/j.jacceco.2024.101730

ESG Ratings: Impact on Portfolios and Volatility

Ceccarelli, M., Ramelli, S., Wagner, A. F. (2024). Low carbon mutual funds. Review of Finance, 28(1), 45-74.
Krueger, P., Sautner, Z., Tang, D. Y., Zhong, R. (2024). The effects of mandatory ESG disclosure around the world. Journal of Accounting Research. https://doi.org/10.1111/1475-679X.12548

Negative ESG News

Colak, G., Korkeamäki, T. P., & Meyer, N. O. (2024). ESG and CEO turnover around the world. Journal of Corporate Finance, 84, 102523.
Park, M., Yoon, A., & Zach, T. (2024). Sell-Side Analysts’ Assessment of ESG Risk. Journal of Accounting and Economics, 101759. https://www.sciencedirect.com/science/article/pii/S0165410124000892

Understanding Impact and Pro-social Investors

Cole, S. A., Jeng, L., Lerner, J., Rigol, N., Roth, B. (2023). What Do Impact Investors Do Differently?. NBER Working Paper 31898. https://www.nber.org/papers/w31898
Jeffers, J., Lyu, T., Posenau, K. (2024). The risk and return of impact investing funds. Journal of Financial Economics, 161, 103928.
Pegoraro, Stefano and Rizzo, Antonino Emanuele and Zambrana, Rafael, Corporate Misconduct and the Capital Allocation of Prosocial Investors (November 27, 2023). Available at SSRN: https://ssrn.com/abstract=4645547 See also ECGI Blog: https://www.ecgi.global/publications/blog/corporate-misconduct-and-prosocial-investing?mc_cid=feb3de0fe0&mc_eid=9b03118bce

Understanding Institutional Investors

Starks, L. T., Venkat, P., & Zhu, Q. (2025). Corporate ESG profiles and investor horizons. Journal of Finance, forthcoming. https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3049943

Non-financial Preferences of Investors

Bonnefon, J. F., Landier, A., Sastry, P., & Thesmar, D. (2025). The moral preferences of investors: Experimental evidence. Journal of Financial Economics, 163, 103955. https://www.sciencedirect.com/science/article/pii/S0304405X24001788
Andersen, S., Chebotarev, D., Filali-Adib, F. Z., Nielsen, K. M. (2024). Rich and responsible: Is ESG a luxury good? (No. 202). Danmarks Nationalbank Working Papers. Available at SSRN: https://ssrn.com/abstract=4615424
Zhang, Y., & Zou, E. (2025). ESG Aversion: Experimental Evidence on Perceptions and Preferences. NBER Working Paper 34048: http://www.nber.org/papers/w34048

Real Effects of ESG Divesting: Are There Any?

Berg, F., Heeb, F., Kölbel, J. F. (2022). The economic impact of ESG ratings. Available at SSRN: https://dx.doi.org/10.2139/ssrn.4088545
Heath, D., Macciocchi, D., Michaely, R., C. Ringgenberg, M. (2023). Does socially responsible investing change firm behavior?. Review of Finance, 27(6), 2057-2083.
Berk, J. B., & Van Binsbergen, J. H. (2025). The impact of impact investing. Journal of Financial Economics, 164, 103972. https://doi.org/10.1016/j.jfineco.2024.103972
Duchin, R., Gao, J., Xu, Q. (2025). Sustainability or greenwashing: Evidence from the asset market for industrial pollution. Journal of Finance, forthcoming. https://doi.org/10.1111/jofi.13412

Asset Pricing: Green and Carbon Premia

Boermans, M. A., & Galema, R. (2025). Carbon home bias of European investors. Journal of Corporate Finance, 102748. https://doi.org/10.1016/j.jcorpfin.2025.102748
Feldhütter, P., & Pedersen, L. H. (2025). Is capital structure irrelevant with ESG investors?. The Review of Financial Studies, 38 (2025) 2362–2385.
Gormsen, N. J., Huber, K., Oh, S. S. (2024). Climate capitalists. NBER Working Paper 32933. https://www.nber.org/papers/w32933
Eskildsen, M., Ibert, M., Jensen, T. I., Pedersen, L. H. (2024). In search of the true greenium. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4744608
Pástor, Ľ., Stambaugh, R. F., Taylor, L. A. (2022). Dissecting green returns. Journal of Financial Economics, 146(2), 403-424.

Dark Side of ESG: Greenwashing and Weak Incentives

Parise, G., Rubin, M. (2025). Green window dressing. Journal of Finance, forthcoming. https://doi.org/10.1111/jofi.13499
Michaely, R., Ordonez-Calafi, G., Rubio, S. (2024). Mutual funds’ strategic voting on environmental and social issues. Review of Finance, 28(5), 1575-1610.
Flugum, R., Souther, M. E. (2025). Stakeholder value: a convenient excuse for underperforming managers?. Journal of Financial and Quantitative Analysis, 60 (1), 135-168. https://doi.org/10.1017/S0022109023001308

Sustainable Finance and Sustainable Policy: Interactions

Inderst, R., & Opp, M. M. (2025). Sustainable finance versus environmental policy: Does greenwashing justify a taxonomy for sustainable investments?. Journal of Financial Economics, 163, 103954. https://www.sciencedirect.com/science/article/pii/S0304405X24001776
Kwok, T. C., Spiro, D., & van Benthem, A. A. (2025). Firm Ownership and Pollution NBER Working Paper 34203, Available at SSRN: https://ssrn.com/abstract=5455843
Rajgopal, S., Srivastava, A., & Zhao, R. (2025). Economic substance behind Texas political anti-ESG sanctions. Management Science. https://doi.org/10.1287/mnsc.2024.05180

Consider also choosing a paper of interest from the following lists:

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (01.10.2025)

Use of Generative AI Tools

You are allowed to use AI tools such as ChatGPT, Copilot, Claude, or similar technologies to prepare a basic summary of the paper for the presentation. You are also allowed to use the AI tools to investigate and discuss the related work in economics and finance.
Nevertheless, you are required to read the full paper, look into potential issues in the basic summary, and edit the summary.
You are expected to answer very detailed questions about any point you are making during the presentation, and your failure to address any question satisfactorily will impact the evaluation of your work.
Any use of AI tools must be explicitly stated and must adhere to the broader ethical recommendations provided by Charles University.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (17.09.2025)

Schedule (2025/2026)

30.9. Introduction to Sustainable Finance and ESG
7.10. Green and Sustainable Bonds
14.10. ESG and Risk Management
21.10. ESG Data and Credit Risk Management (CRIF Czech Credit Bureau)
28.10. - - - no class
4.11. ESG Equity Investing
11.11. Can ESG Lending Deliver Financial Value? (McKinsey Prague)
18.11. ESG Data, Scores, and Indices
25.11. ESG Evidence: Risk and Returns of Green Assets
2.12. Presentations: Week A
9.12. Presentations: Week B
16.12. Presentations: Week C

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (11.11.2025)

The course is running in a small room with a capacity of at most 25 students. We are allocating 20 slots based on the first-come-first-served system and 5 extra spots are reserved for the students who show the strongest interest and need to sign in (i.e., seniority, match with the rest of their curriculum, and motivation). Therefore, if you are interested and on the waiting list, come to the first class, and we’ll see if we will be able to accommodate you in the class.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (17.09.2025)