This course provides a comprehensive introduction to sustainable and impact finance, focusing on how Environmental, Social and Governance (ESG) factors influence financial risk, valuation and long-term value creation. The course aims to equip students with a structured understanding of sustainability as a financial and strategic issue, rather than a purely normative or ethical concept. It integrates conceptual foundations with applied valuation across asset classes, and explores the broader systemic implications of sustainable finance, including externalities, market limits and real-world outcomes.

By the end of the course, students will be able to: Understand ESG as a risk and value framework rather than a normative concept Distinguish ESG, sustainability and impact Interpret ESG ratings and understand their methodological limits Identify financially material sustainability risks Understand how ESG factors affect cash flows, cost of capital and valuation Apply sustainability considerations to financial valuation across asset classes Recognize the difference between firm-level and system-level outcomes Understand the role of externalities and integrated value Critically evaluate the limits of market-based sustainable finance

The course is structured in three parts. The first part introduces the conceptual foundations of sustainable finance, presenting ESG as a risk-based framework, analysing ESG ratings and measurement issues, and introducing financial and double materiality. The second part applies these concepts to financial valuation across asset classes, examining how sustainability affects bonds, public equity and private markets, and how ESG factors influence cash flows, discount rates and long-term value. The third part expands the perspective beyond firm-level finance to explore externalities, integrated value, system-level sustainability risk, market limitations and the relationship between financial performance and real-world outcomes. The course concludes with a forward-looking perspective on the future of sustainable and impact finance.

D. Schoenmaker,W. Schramade, Corporate Finance for Long-Term Value, Springer 2023, available at https://link.springer.com/book/10.1007/978-3-031-35009-2 • Additional academic and practitioner materials will be provided during the course. [Additional readings may be assigned on a weekly basis to supplement in-class discussions and further develop understanding of the course topics]

Interactive lectures integrating conceptual and analytical perspectives Applied exercises on sustainability, risk and financial valuation Case-based learning using real-world corporate and market examples Structured group discussions on sustainability, value and systemic implications

For attending students: Continuous assessment (30%), consisting of a midterm test (10%) and a group project (20%), plus a final written exam (70%). For non-attending students: Final written exam (100%).