SUSTAINABILITY GOALS AND CHALLENGES: TEACHING SUSTAINABLE FINANCE AND ESG RISKS USING MODERN METHODS
I. Mavlutova, A. Natrins, J. Kuzmina
The 2030 Agenda for Sustainable Development and a broad range of sustainable development goals to promote sustainable economic growth are among the strategic priorities. Implementing these initiatives would require innovative private and public sector financing models for a wide range of potential investors. Sustainable finance is understood as a long-term approach to financing and investments, emphasizing long-term thinking, decision-making and value creation, and is characterized as the interrelationship of environmental, social and governance (ESG) issues, as well as financing, lending, and investment decisions.
The Sustainable Finance study courses at universities provide the knowledge, competencies and tools needed to address these challenges and transition to a more sustainable economy, to understand the financial impact of this transition, as well as to manage ESG-related risks for aspiring financiers and risk managers, investment professionals, consultants and financial analysts.
Global sustainability challenges, including climate change, depletion of natural resources and growing inequality, are affecting the business environment and creating risks and opportunities for the financial sector.
The challenges of sustainable finance are difficulties in accessing sources of finance due to inadequate assessment of investors' expectations, non-receipt of sustainable finance due to fear of not meeting the conditions, and failure of financial institutions to receive sufficient data from applicants for financing.
The objectives of the course are to understand how the current financial system works to create better value for society and businesses, to be able to achieve financial success through sustainable approaches, to unlock new perspectives on how financial players and businesses are moving towards more sustainable business models to generate positive long-term returns for business and society.
Sustainable finance can be considered a development of green finance, as it takes into account ESG, issues and risks, and it is particularly important to select sustainability KPIs that are consistent with long-term goals. Students need to be aware of this set of financial and non-financial indicators, such as CO2 emissions reduction, energy consumption, water usage, waste reduction, plastic reduction, material efficiency in material input per unit of service, etc.
Unfortunately, today's sustainable finance study courses usually are more theoretical and characterized by the UN and EU guidelines, insufficiently practically oriented and not sufficiently balanced between traditional and experiential learning methods. It is especially important to use modern AI-driven digital tools in training, which is also indicated by conducted student survey.
Keywords: Sustainability goals, sustainable finance, ESG risks, teaching methods, experiential learning, digital tools.