Sustainable Finance – Hoax or necessity. A global perspective

Anne Löscher
Summer Academy 2022 for Pluralist Economics, 2022
Level: leicht
Perspektive: Diverse
Thema: Ressourcen, Umwelt & Klima
Format: Syllabus

This workshop was originally taught at the Summer Academy for Pluralist Economics 2022
Instructor: Anne Löscher (University of Siegen, Germany)

Background and aim of the workshop

The world is on fire – as Greta Thunberg put it. Though we have “only” reached an average global rise in temperature of 1.2°C compared to preindustrial levels, we already experience dramatic changes: extreme weather events have quadrupled since the 1980ies. If we continue on the current emission path we might cause the earth to warm up by 4°C on average until the end of this century (IPCC, 2019). The resulting storms, droughts, floods, desertification, extreme temperature shifts etc. have fundamental macroeconomic consequences: food inflation is projected to rise, imperilling food security; the destruction of infrastructure, production sites and household wealth as a result of the physical effects of the climate crisis impact balance sheets of countries, firms, households and financial institutions with destabilising effects for the financial system and the economy as a whole; and transitional risks coming with policy decisions to shift towards a low-carbon economy such as the EU’s plan to become carbon-neutral till 2050 yield the risk of stranded assets with further destabilising effects (Batten, Sowerbutts and Tanaka, 2020; Bolton et al., 2020).

These developments also affect financial markets, its agents and regulatory bodies. The volume of financial assets classified as environmentally or socially sustainable has jumped from around US$400billion in 2012 to about US$1.300billion in the second quarter of 2020 (Belloni et al., 2020) – a rise by 325%. The Task Force on Climate-related Financial Disclosures (TCFD) was founded in 2015 as result of a G20 summit’s decision to include financial risks in financial regulation frameworks. Institutions like the Network for Greening the Financial System (NGFS) – a conglomerate of different central banks and supervisory bodies – followed in 2017. The worlds’ biggest financial investors such as BlackRock (BlackRock, 2021) and JPMorgan (JPMorgan Chase&Co., 2021) are jumping on the train by promising enormous portfolio restructurings. 

Aim of this intensive workshop is 1.) to introduce the participants to the macroeconomic workings of the climate crisis as the background of sustainable finance; 2.) to introduce financial assets with ESG (Environmental, Social and Governance) criteria attached to them and their markets and important institutional players; 3.) to provide a critical perspective on the current setup of sustainable finance; 4.) and to work on in-depth case studies illustrating the workings on ESG-finance markets, its emitters and traders as well as their macroeconomic implications.

Previous knowledge on financial markets is not required. ECTS-points can be collected in this workshop. The workshop will be conducted in English, however, brief explanations can be given in German, too, if needed.

 

Selected literature:

Here is some introductory material (not necessarily endorsement!):

Readings:

Videos:


Preliminary outline

  • Day 1: Macroeconomics in times of the Climate Crisis
  • Day 2: Workings of ESG-instruments, financial markets and its big players
  • Day 3: Greening the financial system: policies and regulations;  pros and cons of sustainable finance and of its possible alternatives
  • Day 4: In-depth case study analyses
  • Day 5: Buffer day and wrapping up
  • Day 6: Presentation of group work, feedback round 

 

Download syllabus here

Tags: climate | climate change | climate related risks | finance | macroeconomic | macroeconomics | sustainable
Nach einem kurzen wissenschaftstheoretischem Einstieg zur prä-analystischen Vision der Ökologischen Ökonomik, präsentiert Bernd Siebenhüner die Kernideen der Theorieschule. Dabei grenzt er diese von der Umwelt- & Ressourcenökonomik ab und erläutert auch Unterschiede zur Neoklassik. Während dieser Einführung in die Ökologische Ökonomik erläutert Siebenhüner Begriffe wie planetare Grenzen, Nachhaltigkeit oder Thermodynamik. Dabei gebt er insbesondere auf die Leitvision „Komplementarität statt Substituierbarkeit“ ein und stellt diese den in Kontext von schwacher und starker Nachhaltigkeit. Im Anschluss präsentiert Siebenhüner die Debatten um Wachstum und Ökosystemleistungen in der Ökologischen Ökonomik. 2015 Level: leicht Ökologische Ökonomik Bernd Siebenhüner Netzwerk Plurale Ökonomik Économie de l’environnement, des ressources naturelles, du développement durable, green economics, sustainability science, bioéconomie, écodéveloppement : nombreux sont les disciplines et les concepts qui croisent considérations environnementales et économiques. On revient ici sur l’économie écologique, qui a réussi à investir le champ académique et à démultiplier les débats. 2012 Level: leicht Que peut-on apprendre de l’économie écologique ? Albert Merino-Saum & Philippe Roman La vie des idées Eine Paneldiskussion der Online-Konferenz "Next Generation Central Banking", die im Rahmen des Projekts "Transformative Responses" von Finanzwende und in Kooperation mit der Heinrich-Böll Stiftung organisiert wurde. 2021 Level: leicht NextGen Central Banking: Die Rolle der Zentralbanken in der sozial-ökologischen Transformation Finanzwende e.V. & Heinrich-Böll-Stiftung, Claudia Buch (Vice President Bundesbank), Adam Tooze (Columbia University), Daniel Stelter (Beyond the Obvious) & Michael Peters (Finanzwende) Transformative Responses, Heinrich-Böll-Foundation & Finanzwende Um der Klimakrise zu begegnen, müssen wir unsere Art zu wirtschaften radikal verändern. Ein großes Hindernis auf diesem Weg könnte die vorherrschende ökonomische Theorie sein. Denn der neoklassischen Wirtschaftswissenschaft ist es methodisch unmöglich, alternative Wirtschaftsformen abzubilden. Außerdem führt sie zu Politikempfehlungen, die systematisch die Möglichkeit einer Postwachstumswirtschaft ausblenden. 2019 Level: leicht Die blinden Flecken der neoklassischen Klimaökonomik Lia Polotzek & Joachim Spangenberg Economists for Future Banking 101 is a series of 6 short videos that ask the following questions: How do banks work and how is money created? Is reveals common misunderstandings of money creation and the role of banks. Furthermore, the videos show how models taught in many introductory classes to economics (Econ 101) do not reflect those processes: Part 1) “Misconceptions around Banking” questions common comprehensions of how banks work (savings = investments). Part 2) “What's wrong with the money multiplier” states that the model of the money multiplies is inaccurate. Part 3) “How is money really made by banks” explains the process of money creation, loans and inter-bank settlement. Part 4) “How much money banks create?” asks what limits the money creation by banks and presents the difference between reserve ratio, liquidity ration, equity and refers to the inter-bank market. Part 5) Explores the question if banks create money or just credit and especially refers to credit risks. Part 6) Explains how money gets destroyed when loans are paid back. Note: The videos refer to the UK monetary and banking system, some explanations don't apply to other banking systems, e.g. the reserve ratio. 2012 Level: leicht How money gets destroyed - Banking 101 (Part 6 of 6)   Positive Money Was sind Finanzmärkte, Hedgefonds und Schattenbanken? Über diese Fragen erläutert Brigitte Young die Funktionen von Finanzmärkten und Hedgefonds, sowie deren Dysfunktionen anhand prominenter Beispiele. Young geht zudem auf die Regulierung von Hedgefonds nach der Finanzkrise und den Zusammenhang zum Schattebankensystem ein. Zuletzt stellt sie die Frage, ob das Finanzsystem einen sozialen Nutzen hat. 2015 Level: leicht Hedgefonds und Schattenbanken - Widerstreitende Interessen auf den Finanzmärkten? Brigitte Young Netzwerk Plurale Ökonomik

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