Sustainable Finance

Ethics and Sustainability in Finance

This course is part of the new competency development pathway in sustainability organized by HEC Liège. It is integrated with the course "Sustainable Business Models: A Serious Game.

The course structure follows partially the "Handbook of Sustainable Finance" (2025), by Thierry Roncalli (henceforth HoSF). The exact course content is subject to changes as sustainable finance is one of the most dynamic and rapidly evolving fields in finance.

The goal of this course is to provide the students with an understanding of the potential contribution of Sustainable Finance to achieving the Sustainable Development Goals and the goals of the Paris Agreement on Climate Change. Students will understand the consequences of financial decisions from an environmental and social perspective.

Detailed course plan: 

A - What is sustainable finance?

  1. Definition of finance and its functions

  2. Definition and history of sustainable finance

  3. Motivation: Why do we need sustainable finance?

Reading: HoSF Ch 1. Introduction.

 B - Impact investing, engagement & voting policy

  1. Motivation for sustainable investments & the attitude-behavior gap

  2. Sustainable investment strategies - Impact Investing, Active ownership & ESG voting policy

Readings:

Amel-Zadeh, A., & Serafeim, G. (2018). Why and how investors use ESG information: Evidence from a global survey. Financial Analysts Journal, 74(3), 87-103.

Bauer, R., Ruof, T., & Smeets, P. (2021). Get real! Individuals prefer more sustainable investments. Review of Financial Studies, 34(8), 3976-4043.

Hartzmark, S. M., & Sussman, A. B. (2019). Do investors value sustainability? A natural experiment examining ranking and fund flows. Journal of Finance, 74(6), 2789-2837.

HoSF Ch 5. Impact Investing
HoSF Ch 6. Engagement & Voting Policy.

  C - Sustainable financial products

  1. Banks

  2. ESG mutual funds

  3. Green and social bonds

  4. Sustainable alternative assets
 
Reading: HoSF Ch 4. Sustainable Financial Products.

 D - Sustainability ratings or the need for relevant information

  1. Sustainable Finance Disclosure Regulation (SFDR) & Corporate Sustainability Reporting Directive (CSRD)

  2. Rating agencies

  3. ESG ratings, SDG ratings & the role of data vendors 

Readings:

Berg, F., J. Kölbel, and R. Rigobon (2022). Aggregate confusion: The divergence of esg ratings. Review of Finance, 26(6), 1315-1344.

Dimson, E., Marsh, P., & Staunton, M. (2020). Divergent ESG ratings. Journal of Portfolio Management, 47(1), 75-87.

HoSF Ch 2. ESG Scoring.

 E - Impact of ESG investing of asset prices and portfolio returns

  1. Theoretical models

  2. Empirical results

  3. Examining research in the field of sustainable finance - a case of sin stocks

Readings:

Boustanifar, H. & Schwarz, P. (2024). Measuring Business Social Irresponsibility: The Case of Sin Stocks. Working Paper. Available at SSRN.

HoSF Ch 3. Impact of ESG Investing on Asset Prices.

H - Special topics

based on guest lectures (specific material, attendance is compulsory)   

Sustainable Business Models : a Serious Game

The ChocoMission V2 serious game offers students an immersive, systemic, and reflective learning experience centered on the sustainable transformation of business models.

Based on a scenario inspired by a real-world case, it engages participants in a collaborative simulation involving strategic, ethical, and operational dilemmas faced by a Belgian SME in the cocoa sector committed to sustainability.

 

The pedagogical objectives are to:

 

• Stimulate experiential learning: enable students to explore real sustainability challenges through decision-making, resource exploration, and team discussions
• Expose the complexity of global value chains: integrate North-South tensions, climate crises, governance issues, and social justice concerns
• Raise awareness of systemic trade-offs: every decision impacts both the dynamic Donut (representing planetary boundaries and social foundations) and the company's cash flow (costs, risks, profitability)
• Experiment with alternative governance and financing models: allow students to embody different roles (guardian, observer, strategist) and assess the consequences of decisions from each perspective
• Leverage immersive tools : field testimonies, animated avatars, and 360° videos in regenerative cocoa plantations, to deepen emotional engagement and critical thinking
• Strengthen collaborative skills: work in cross-functional teams, use double materiality matrices, receive dynamic feedback, and track performance via a score based on impact, cash flow, and cooperation

Ethics and Sustainability in Finance

At the end of this course students will be able to:
 
- Understand, explain, and synthesize the planet's social and environmental challenges;

- Understand the role of Finance to achieve the UN sustainable development goals;

- Explain the principles for responsible investment and the various sustainable financial products;

- Understand, explain, and synthesize the sustainability challenges to corporates;

- Understand how ESG scores are built and discuss them critically;

- Be able to research and understand a scientific article related to sustainable finance.
 
Specific skills and competences trained during this course.

At the end of this course students will have:

- Developed their ability to speak English; 

- Developed team work abilities;

- Strengthened their capacity for creative conception of solutions;

- Strengthened their professional capacity for oral communication.

Sustainable Business Models : a Serious Game

Understanding of Sustainability Concepts

• Acquire a robust understanding of sustainability principles across planetary boundaries and social foundations
• Explore how these principles guide strategic choices and reshape business models in the context of global value chains

• Develop the ability to navigate trade-offs between People, Planet, and Profit under real-world constraints
• Learn to make decisions that are ethically robust, financially viable, and environmentally responsible

• Apply learnings from courses (e.g. Sustainable Finance, Life Cycle Management, ESG Reporting) to a complex simulation
• Translate theoretical sustainability frameworks into concrete business strategies and multi-stakeholder decisions

• Address wicked problems and crisis scenarios using systemic thinking
• Confront ethical dilemmas such as greenwashing, inequality, or environmental degradation with evidence-based reasoning

• Deepen your understanding of stakeholder expectations and power dynamics in sustainability transitions
• Experiment with governance models (cooperative, sociocratic, multi-stakeholder, etc.) and assess their impact

• Assess the double impact of business decisions: both on the Donut (ecological/social indicators) and on cash flow
• Understand how to manage for positive financial balance without maximizing surplus-aligning purpose and performance

• Strengthen collaborative decision-making through role-based gameplay (strategist, observer, guardian)
• Improve your capacity to defend and communicate decisions under time pressure and uncertainty

• Learn to adapt strategies in response to external shocks (flooding, climate risk, reputational crises)
• Develop resilience capabilities by iterating and rebalancing decisions throughout the simulation

Ethics and Sustainability in Finance

Prerequistes are:

- Fundamentals in finance (notion of arbitrage, net present values, financial markets) are a good prerequisite.

A good level of English is also required. 

Sustainable Business Models : a Serious Game

This course is part of the competency development pathway in sustainability organized by HEC Liège. It follows the completion of a thematic course and provides a space to apply acquired knowledge in a practical, immersive setting.

During the first block of the master's program, students are required to choose and complete one of the following thematic courses, all of which are taught concurrently:

• Sustainable Finance - Ethics and Sustainability in Finance
• Reporting and Metrics for Sustainability - Sustainability Reporting and Strategy
• Life Cycle Management - Life Cycle Assessment and Ecodesign

Ethics and Sustainability in Finance

The main course consists of a series of lectures (5 sessions of 2 x 1,5 hours each). The lecture is a mixture of theoretical concepts, illustrative examples, exercises and open discussions on the various concepts thaught. The lecture is complemented by an exercise/guest lecture (1 session of 2 x 1,5 hours) in which real-life applications of sustainable finance in the investment process are explored in depth. Students are expected to prepare for the lectures and tutorials in order to actively participate in class.

Sustainable Business Models : a Serious Game

The course includes a serious game designed to simulate the challenges of transforming a company's business model toward sustainability. The simulation is played live, in teams of 3 students, over a single 3 to 4-hour session.

Each student plays a distinct role (e.g., controller, observer, guardian) and accesses role-specific resources via an interactive digital interface.

Throughout the game, students are invited to:

• Explore multimedia content (videos, avatars, documents)
• Complete individual and team-based quizzes
• Make decisions individually and collectively across a series of missions and crisis scenarios

Ethics and Sustainability in Finance

Face-to-face course


Further information:

see above

Sustainable Business Models : a Serious Game

Blended learning


Further information:

The serious game is currently (september 25) in version 2 (V2) development.

It is played live, in person, during a single 3 to 4-hour session, using a dedicated digital interface.

Students participate in teams of 3, each with a specific role.

The game unfolds in real time, blending interactive decision-making, resource exploration, and team collaboration, all supported by a dynamic and gamified interface.

Ethics and Sustainability in Finance

Platform(s) used for course materials:
- LOL@


Further information:

The required textbook that will be predominately used throughout the course is:

- Roncalli, T. (2025). Handbook of Sustainable Finance.

Recommended books are:

- Schoenmaker, D., & Schramade, W. (2018). Principles of sustainable finance. Oxford University Press.

Recommended scientific articles are:

- Berg, F., J. Kölbel, and R. Rigobon (2022). Aggregate confusion: The divergence of esg ratings. Review of Finance, 26(6), 1315-1344.

- Dimson, E., Marsh, P., & Staunton, M. (2020). Divergent ESG ratings. Journal of Portfolio Management, 47(1), 75-87.

- Amel-Zadeh, A., & Serafeim, G. (2018). Why and how investors use ESG information: Evidence from a global survey. Financial Analysts Journal, 74(3), 87-103.

- Bauer, R., Ruof, T., & Smeets, P. (2021). Get real! Individuals prefer more sustainable investments. Review of Financial Studies, 34(8), 3976-4043.

- Hartzmark, S. M., & Sussman, A. B. (2019). Do investors value sustainability? A natural experiment examining ranking and fund flows. Journal of Finance, 74(6), 2789-2837.

- Boustanifar, H. & Schwarz, P. (2024). Measuring Business Social Irresponsibility: The Case of Sin Stocks. Working Paper. Available at SSRN.

The books and articles will be complemented by a slide deck.

Ethics and Sustainability in Finance

Exam(s) in session

Any session

- In-person

written exam ( multiple-choice questionnaire )


Further information:

MCQ questions will be worth 1, 2, or 3 points. The point value of each question will be determined after the exam based on how many students answered it correctly. Questions that most students answer correctly will receive 1 point; those that many students answer correctly will receive 2 points; and those that only a few students answer correctly will receive 3 points.

Sustainable Business Models : a Serious Game

Other : Simulation integrated assessment


Further information:

Assessment for this course is based on multiple components linked to the serious game experience:

• Active engagement during the simulation
• Completion of missions and individual/team activities
• Sustainability performance, measured through team results (Donut positioning, financial balance)
• Teamwork and collaboration, including a peer evaluation

• Part A (15 points): the thematic course selected in block 1 (e.g., Sustainable Finance, Reporting, or Life Cycle Management)
• Part B (5 points): the serious game "Sustainable Business Models"

Ethics and Sustainability in Finance

none

Ethics and Sustainability in Finance

Attendance to the lectures and tutorials is not required, however, it is strongly recommended. Part of the exam questions may be specifically based on the oral communication/presentation of the lectures or the tutorials. Attendance to the invited guest lectures is compulsory.

Sustainable Business Models : a Serious Game

Students will be informed of the detailed arrangements a few weeks before the serious game takes place.

A remote information session is scheduled to explain the practicalities of the simulation: March 30, 2026 18:00-19:00 (online)

The serious game itself will be played in-person, during one of three available 3-hour sessions:

• April 15, 2026
• April 17, 2026
• May 6, 2026

Ethics and Sustainability in Finance

Prof. Dr. Patrick Schwarz

email : patrick.schwarz[at]uliege.be 

 

Teaching assistant: Thomas Longueville

email : thomas.longueville[at]uliege.be

Sustainable Business Models : a Serious Game

Professor Virginie Xhauflair, v.xhauflair@uliege.be

 

Teaching Assistant : Youssra El Midaoui, Youssra.ElMidaoui@uliege.be

 

For any organizational or practical questions related to the serious game, please contact Youssra El Midaoui and include "ChocoMission" in the subject line of your email.

Ethics and Sustainability in Finance

There is no MOOC associated with this course.