Impact investing: Where high finance meets high environmental goals

Among the most profound changes in financial markets in recent years has been the emergence of impact investing – investments made with the aim of realising social or environmental benefits along with financial returns. This is part of the overall greening of financial markets, which is seeing the environmental performance of companies increasingly being taken into consideration by investors.

The UCD Michael Smurfit Graduate Business School anticipated this trend when it established the MSc in Renewable Energy and Environmental Finance programme, the only such course in the world which offers in-depth coverage of environmental and impact finance along with green data science.

The course, which is available in one-year full-time and two-year part-time formats, is aimed at graduates with a background in a number of different fields including business, economics, finance, engineering, mathematics, environmental science and physics, who are keen to pursue a career in the growing number of industries in the sustainable business and finance industry.

"The course should appeal to anyone with an interest in finance [who] wants to make the world a better place," says course director Prof Andreas Hoepner.

Refresh and redesign

The programme has just undergone a significant refresh and redesign to bring it in line with the latest developments. “We have redesigned the programme in light of the Paris Agreement on climate change,” says Prof Hoepner, adding that the agreement’s long-term goal is to “keep the increase in global average temperature to well below 2 degrees above pre-industrial levels, and to limit the increase to 1.5 degrees”.

“The Paris Agreement has said that fossil fuels are not part of the future and our focus is now on renewable energy. We also look at environmental sciences, energy economics and policy, and portfolio risk management.”

Another pioneering aspect of the course is the green data science module. “We look at how big data can be used to assess the environmental performance of companies,” Prof Hoepner explains.

Prof Hoepner's credentials in this sphere are unparalleled. As professor of operational risk, banking & finance at UCD, he is a financial data scientist working towards the vision of a conflict-free capitalism and, since June of this year, he has served on the European Union's Technical Expert Group on Sustainable Finance as one of three independent members, where he specialises in developing low-carbon benchmarks.

“We are blending financial services with environmental science and the UN Sustainable Development Goals [SDGs] on the Masters programme,” he continues.

Full semester

The course includes a full semester on finance, where students study various cutting-edge aspects of financial services including quantitative methods for finance, financial econometrics, capital markets and instruments, commodity finance, financial theory and financial analysis. The second semester covers the environmental aspects while the third deals with ethics in financial services.

Fabiola Schneider from Frankfurt graduated from the programme earlier this year and has now gone on to do a PhD which examines how climate change is affecting access to finance for high-emissions companies. "It's getting more difficult for those companies to get access to finance from the markets," she says.

We have more employers looking to hire people from the course than we have students. Last year we had students literally recruited from the classroom

“I very much enjoyed the course,” says Schneider. “The class was made up of students from different backgrounds and that offered some great insights. My own degree is in chemistry and there were others with geography and business degrees. It’s quite an international class as well, with students from nine different countries in the class. Energy is so interesting. Every country has a different approach to it.

"I looked at all kinds of courses around Europe for something that would allow me to have an impact in later life," she continues. "The financial aspect of the course was very important. The combination of finance, impact, the alignment with the SDGs, and good values made me choose it."

Wide range

Graduates have a wide range of options open to them. “Two of us are doing PhDs, some are energy brokers and analysts, others are working for government bodies – they have gone on to work in a really broad spectrum of careers,” Schneider says.

"We have more employers looking to hire people from the course than we have students," says Prof Hoepner. "Last year we had students literally recruited from the classroom. One of our graduates is now working as a renewable energy broker in Puerto Rico. He is Canadian and was recruited by the CEO of the company who had flown in from Switzerland to give a lecture to the class. He was so impressed by the questions asked by that student that he recruited him on the spot. That really sums up the international dimension of the course."

Applications for the course are now open. People interested should feel free to email andreas.hoepner@ucd.ie or fabiola.schneider@ucdconnect.ie directly if they have any questions in relation to it.

[ smurfitschool.ie/programmes/masters/mscinrenewableenergyandenvironmentalfinance/ ]