In September 2020, Finance and Economics Masters students in their second year of study will be able to choose Sustainable Finance as their specialisation. This new track, which will also be supported by a Chair in Sustainable Finance, will give students the skills they need to face a rapidly evolving economic context where climate change is creating risk and uncertainty at all levels of the corporate structure.
We asked programme director, Professor Christos Koulovatianos, three questions to learn a little more about the programme and what it can bring to students.
Why did the University decide to open a sustainable finance track?
A growing area of focus for the Luxembourg, European and international financial centre – and for the community in general – is sustainable finance. Luxembourg is already a leader in this area, notably in sustainable investment funds and green bonds, however sustainable finance will ultimately touch upon all financial products and aspects of saving and investing.
The burden of financing green investments cannot be borne solely by governments. It requires a synergy between markets and governments. This synergy needs the development of a private sustainable finance industry that will design appropriate financial instruments and promote low-risk financing of sustainable-products innovation. Developing a critical mass of trained experts on Sustainable Finance is the key infrastructure ingredient for promoting this new area of private financial markets.
The Sustainable Finance Track is setting the course for educating about the emerging challenges and opportunities related to Sustainable Finance. The decision to launch the Sustainable Finance Track demonstrates leadership in shaping the future of the financial industry in Luxembourg and beyond.
What precisely will students learn on this track?
The Sustainable Finance Track has been designed and developed by academics and professionals working in the financial industry with hands-on experience in modelling and managing sustainability risks, performing ESG (Environmental, Social and Corporate Governance) due-diligence of investments and drafting CSR (Corporate Social Responsibility) reports. Students of this track will proactively and critically engage with case studies, green products, risk methodologies, reporting systems and practical solutions adopted by financial institutions in the area of sustainable finance and investment. The Sustainable Finance Track aims to equip students with the very latest knowledge on climate-related financial risks, as well as the expertise, networks, and skills to design and implement practical solutions for measuring and managing these risks.
What types of careers can students hope to begin after completing their degree?
Given the growing needs for professionals who understand the impact of climate change and current sustainability issues, the Sustainable Finance Track offers employability across various fields. Upon completion of this track, students can apply their sought-after skills and knowledge to the following fields:
- Enterprise and Finance Risk Management (EFRM) Departments – from 2021 banks will be increasingly looking for knowledgeable practitioners to perform and validate climate change stress testing exercises and frameworks. The students of this track will gain the necessary quantitative skills and understanding of the relevant framework to perform stress testing.
- Financial Supervisory Units – local and supranational supervisory authorities across Europe are increasingly recruiting open-minded individuals to perform onsite inspections and regulatory checks on the sustainability of banks.
- Governance Departments – ESG and CSR is no longer an added layer of doing business in the financial industry. Banks are recruiting experts to integrate ESG with their core strategies in order to save operational costs, gain new client base and address reputational risk.
- Credit Analyst Departments – the knowledge of pricing in environmental and social risks to investments and Project Finance is in high demand across the financial industry. The students of this track will gain expertise in performing ESG due diligence as well as sustainability assessments of investments.
To read more about this track or how to apply for admission, please visit the Master track’s website.