Making the sustainable investing case is a crucial skill for every type of professional, whether in the private, public, or not-for-profit sectors. This course takes lessons from the theories and practices of sustainable investment in the professional investment industry and makes them accessible to other disciplines. In every sector and situation, one is increasingly expected to identify, measure, and report material environmental, social, and governance (ESG) risks. Every investment has implicit ESG factors, because every decision made relies upon humans to buy, make, or do something and employs the rule of law to govern contractual relationships between investor and investee. Investment decisions are made daily for more than US $100 trillion assets under management in the global investment industry and projected to grow to US $145.4 trillion by 2025. This course explores capital allocation decisions more broadly, looking at decisions made every day by governments, companies, and non-governmental organizations (NGOs). Sustainable investment proactively considers themes and issues such as climate pollution, workplace safety, employee health and wellness, local community relationships, diversity, executive compensation, business ethics, corruption, and new market innovation. We explore critiques of sustainable investment to better understand theory and practice. While some have tried to tarnish what ESG is, and is not, the reality is every investment, business or government today is fast learning how best to integrate all factors, including ESG factors, into their investment decision-making practice. In a multi-polar world with interconnected decision-making processes and consequences, more stakeholders demand greater transparency, customers have expectations of their vendors, reputation and litigation risks are profligate, and regulators seek to reduce negative impacts on society. This course is grounded in industry experience, investment policies and portfolios, and cross-disciplinary academic literature. We teach using Harvard Business School case studies and case examples drawn from industry. The course blends the academic and practitioner literature with current academic research and industry activities to ensure students learn from the most relevant material. We promote students' experiential learning by building up components of simulated investment recommendations. Students have many opportunities to explore topics of interest to them, including those drawn from headlines.
