GRA 6566 ESG Risks, Reporting and Regulation
GRA 6566 ESG Risks, Reporting and Regulation
The objective of this course are three fold
- Identify the activities/operations of the firm which create or destroy environmental and/or social value (ESG risks)
- Understand and become familiar with the different regulatory and voluntary frameworks used to assess, disclose and report ESG risks, and the economic tools to measure the positive and negative impacts of ESG risks
- Integrate ESG risks in Enterprise Risk Management (ERM) and combine with other financial and operational risks to optimally enhance positive impact and minimize negative impacts
To help identify the positive and negative ESG impacts of corporate operations, we will first review the major environmental, sustainability and social challenges that frame the discussion of ESG impact, in particular within the context of the UN Sustainable Development Goals (SDG) and Climate Change challenges. In the process of integrating ESG risks in ERM, the students will need to become familiar with ESG impact measurement standards, impact materiality determination, ESG reporting frameworks, and both voluntary and regulatory ESG disclosure standards, like the EU Sustainable Finance Disclosure Standards (SDFR), of December 2019 or the SEC forthcoming Regulation on ESG Disclosure.
By the end of the course, the students will
- Have good knowledge of ERM, and understanding of how different risks, including ESG risk are incorporated in ERM.
- Be familiar with the different frameworks used to measure impact and assess materiality.
- Be cognizant of the major global reporting frameworks for disclosure of ESG metrics and performance.
- Be knowledgeable of the scope, extent and differences of voluntary (CFA, IIRC, GRI) and regulatory (EU, SEC, …) disclosure standards.
- Be familiar with the different sources of ESG performance and risk data, their history, weaknesses and strengths.
- Identify the activities/operations of the firm which create or destroy environmental and/or social value (ESG risks) – using the SDG as reference
- Measure the positive and negative impacts of ESG risks using the GRI or the IIRC frameworks
- Integrate ESG risks in enterprise risk management (ERM) and combine with other financial and operational risks to develop action plans to optimally enhance positive impact and minimize negative impacts, provide appropriate reporting and comply with industry standards or regulatory disclosure requirements
- Able to access various databases of corporate ESG performance and assess the quality and weaknesses of different measures and sources.
Since the field is in rapid change, the students will learn to identify the appropriate sources of ESG risk measurement, reporting and disclosure, and how to keep track of relevant regulatory changes. In addition, they will also learn how integrate new sources of risks and opportunities within ERM, how to assess their materiality and how to adjust the firm’s optimal risk management, reporting, disclosure and compliance procedure accordingly.
- General introduction to the sources of ESG Risk for corporations and investors
- Introduction to Entreprise Risk Management (ERM):
- Traditional ERM
- Integrating ESG Risks into ERM
- Assessing ESG Risks and Opportunities
- Identification of an organization main impacts: where the organization creates (positive impact) or destroys value (negative impact), in terms of financial, environmental and social performance
- Measuring impact and identifying what really matters.
- Measurement frameworks: UN SDG, GRI, WBCSD
- Materiality determination: SASB, GRI 101
- Managing ESG Risks and Opportunities
- Controlling material ESG risks
- Optimizing profitable positive impact opportunities
- Reporting and Disclosing ESG Performance
- Reporting Standards: GRI, IIRC, TCFD (Task force on Climate related Financial Disclosures), etc.
- Disclosure standards – voluntary (GRI, IIRC, CFA, …) and regulatory (EU SDFR, SEC, …)
- Compliance
- An integrated approach ESG risk management: the TCFD approach on governance, strategy risk management and performance indicators on climate related impact.
- Assessing corporate ESG performance
- Main firm ESG performance data sources: KLD, Sustainalytics, Robeco, Refinitiv, Bloomberg, ...
- Strengths and weaknesses of different sources.
- Parsing and combining ESG performance data for improved assessments.
The learning activities will combine for 2/3 lectures, 1/6 case discussions, and 1/6 external guest speakers. Students are expected to prepare the lectures and guest speakers by reading assigned materials and participate actively in the discussion of the lecture topics and guest speakers presentations. The course will include the preparation and discussion of two to three cases or applied assignments on ESG risk management and compliance. There will be various assignments throughout the course, including preparing reports for each of the cases, and in class presentations of the case reports. Most learning will take place through student discussions of papers, cases, and other assignments.
The current reading list is preliminary and incomplete. Further articles and readings may be assigned at the start and during the course of the semester.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course starts.
At resit, all exam components must, as a main rule, be retaken during next scheduled course.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have spesific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Covid-19
Due to the Covid-19 pandemic, there may be deviations in teaching and learning activities as well as exams, compared with what is described in this course description.
Teaching
Information about what is taught on campus and other digital forms will be presented with the lecture plan before the start of the course each semester.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 60 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Individual written exam under supervision Exam code: GRA65661 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 30 Grouping: Group (3 - 4) Duration: 11 Week(s) Comment: Group written assignments Exam code: GRA65661 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Activity Form of assessment: Class participation Weight: 10 Grouping: Individual Duration: 1 Semester(s) Exam code: GRA65661 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
| Activity | Duration | Comment |
|---|---|---|
Teaching | 36 Hour(s) | |
Group work / Assignments | 30 Hour(s) | |
Student's own work with learning resources | 48 Hour(s) | |
Examination | 3 Hour(s) | |
Prepare for teaching | 54 |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.