Finance students at NYU Stern School of Business learn about environmental, social and governance (ESG) investment with the help of hard cash as well as lectures. They invest real money through a teaching fund that is at the heart of an experiential learning course. But setting up an ESG portfolio proved to be an education for staff as well as students.
An array of ESG standards and metrics made the launch a time-consuming process. “Even once we’d started the fund and put the money in it, it took us at least a month before we bought our first stock,” says Anthony Marciano, a clinical finance professor at Stern, in New York City.
Prof Marciano teaches the course based on management of the Michael Price Student Investment Fund, a family of funds with a value of about $2m. “The other funds started from the get-go. With a value fund it’s easy to pick your benchmark,” Prof Marciano says. “But we ran into a lot of complexities [with the ESG fund] that we wouldn’t have had with the other funds.”
Finance academics and students are not alone in feeling perplexed. Over the past year, investors have poured money into stocks and portfolios with an ESG focus. Evidence shows that they perform well and may even weather global crises such as the coronavirus pandemic better than other funds.
But what is often described as an “alphabet soup” of acronyms denoting the different forms of ESG evaluation and reporting — from SASB and GRI to TCFD and GIIRS — leaves companies and asset managers, as well as finance professors, scratching their heads.
“Companies are sinking in a sea of too much data,” says Colin Mayer, professor of management studies at the University of Oxford’s Saïd Business School. “They are confused and irritated by the amount of information that they’re expected to provide.”
This makes it difficult to develop courses that cover ESG evaluation, says Prof Mayer. “One can teach the most widely used and accepted approaches,” he says. “But what is difficult to do in terms of designing a course at the moment is say: ‘This is the standard that will emerge as the one that is going to generally be applied.’ That level of clarity is not yet there.”
If the teaching of ESG investment evaluation is still evolving, so too is the inclusion of sustainable investing in core finance courses.
What is difficult to do in terms of designing a course is to say: “This is the standard that will emerge”
“There are very few finance programmes that include social responsibility, ESG and sustainability as dominant themes to be covered in all aspects of finance training,” says Bruno Gerard, who teaches ESG evaluation at BI Norwegian Business School, which is developing an MSc in sustainable finance.
When sustainable finance is taught, it is often through electives. Instead, it needs to be integrated into mainstream finance programmes, says Martina Macpherson, senior vice-president, ESG, at rating agency Moody’s, who in 2018 was part of a UK government-led task force on social impact reporting.
“Otherwise we are creating subject matter experts in silos,” she says. “So it ultimately has to be in the core finance course.”
She adds that part of the problem is that until recently publications such as academic journals seldom included research on evaluating the social and environmental impact of sustainable investments. “In finance-led journals it’s changing,” she says. “But it’s very recent.”
This has proved a challenge for Norway’s BI in the development of its MSc in sustainable finance.
“When we were looking around for textbooks that we could use, we only found two or three,” says Prof Gerard. “And they don’t build on a very strong academic tradition.”
“We’re looking at how to bring the next generation of sustainable finance leaders into the domain through education and through the forward-looking perspective of careers and opportunities,” she says.
Some courses are emerging from outside the business school sector. In April, for example the IIX Impact Institute — part of IIX, which was created to develop the world’s first listed exchange for impact investing companies — launched an online course called Measuring Impact for Sustainability.
Meanwhile, Prof Gerard believes other forces will accelerate the teaching of ESG evaluation in finance. “There is student demand for this,” he says. “But also in Norway all the asset managers come to us and say: ‘We have to run ESG funds, our clients want them, and we don’t have people who can run them.’ So there’s acute demand from the employer side.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
