Undergraduate Finance Course Explores a Warming World

Sign at a protest reading "The climate is changing, so should we #ActNow"

Students in FIN T480: Finance and Climate Change engaged in deep analysis of the ways climate change impacts investors’ decisions as they consider value beyond the bottom line. Taught by LeBow Professor and Department Head of Finance Ed Nelling, PhD, the special topics course was offered for the first time this summer, complementing Drexel’s Climate Year initiative for 2020-21 and supporting LeBow’s role as a signatory to the United Nations’ Principles for Responsible Management Education.

“We use real-world cases and examples in the news to illustrate the link between climate change and finance because I’d like students to realize that thinking about climate change should not be limited to government regulators or a few people in a company’s headquarters,” Nelling said.

Nelling and the students treat climate change as scientific fact, rigorously exploring how the changing climate affects corporate investments; how investors can incorporate environmental concerns in their portfolios, including weighing ESG (environmental, social and governance) factors in their decisions; and how financial regulators and institutions are addressing climate change in policy decisions.

“The readings for this class have really motivated me to do my own research and learn more outside of class,” said Solomon Shilly, a fourth-year finance major.

Class sessions drew from business cases from the wine industry in the Napa Valley and carbon credits in Australia, approaching topics through Oxford-style debate, with teams of students arguing pro and con and the audience determining the most convincing argument.

Shefali Mahey, a fifth-year finance major, came to the course with knowledge of ESG investing from prior finance courses.

“I had previously taken Finance & The Healthcare Industry, and I’ve found that these special topics courses really expose you to a lot of different ideas and provide good examples for discussions with people from the finance industry,” she said.

Nelling plans to offer the course again in the 2021-22 academic year and will continue the conversation on ESG investing with an event this fall hosted by Drexel’s Finance Affinity Group. He hopes that LeBow students will become innovators within finance in addressing climate issues.

“Thinking about climate change needs to be embraced by business at the broadest possible level—by all employees, customers and suppliers,” he said. “It affects corporate performance and represents a source of systemic risk in global financial markets, and significant challenges often present significant opportunities.”

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