COURSE NUMBER: MBA 292I.1B

This course is dual-listed with the Evening-weekend MBA Program

COURSE TITLE: Responsible Investing - Challenges and Opportunities in Asset Management

UNITS OF CREDIT: 1.0

INSTRUCTOR: Lloyd Kurtz

E-MAIL ADDRESS: lloydkurtz@berkeley.edu 

MEETING DAY(S)/TIME:  Select Tuesday evenings  6 pm to 9:30 pm. Consult the Spring 2019 electives spreadsheet for meeting dates.

PREREQUISITE(S): Asset Management (MBA237.2)

CLASS FORMAT: The course will cover key topics in modern responsible investment practice, including impact of environmental, social, and governance (ESG) factors on: portfolio risk assessment, firm cost of capital, valuation, implications for fundamental analysis, and assessment of impact.

REQUIRED READINGS: A packet of readings will be provided prior to the first class session.  Good background material on responsible investment may be found on the following websites:
http://www.unpri.org
https://www.sasb.org
http://www.sristudies.org

BASIS FOR FINAL GRADE: Risk project, final paper, class participation.

CAREER FIELD: This course is most relevant for those in (or planning to enter) the fields of investment management or financial risk management, particularly those interested in pursuing a career in sustainable investment.  But, because the course also focuses on the financial impact of sustainable finance practices on the enterprise (‘materiality’), it’s also useful for students with a particular interest in strategy and leadership.

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: 
This class examines the implications of responsible investment and ESG (environmental, social and governance) policies for asset owners and asset managers, focusing particularly on the risk dimension.  It is an axiom of financial theory that constraints diminish portfolio efficiency, and responsible investment policies certainly impose constraints (e.g., avoidance of tobacco or fossil fuel stocks).  But some academics, consultants, and investment managers argue that responsible investment policies, ESG integration, and active ownership can also confer benefits.  In recent years major advances have been made in the field, as researchers and commercial providers of risk management tools have introduced new techniques and quantified the costs and benefits of old ones.

The course is a combination of lecture, guest lecture, and discussion. We will review some of the theory underlying modern thinking about risk, from Markowitz’s concept of ‘uncertainty’, to the use of modern multifactor models to managing tracking error against a benchmark.  We will also explore emerging views on risk, particularly the developing institutional practice of integrating ESG factors into risk assessment. 


BIOGRAPHICAL SKETCH:
Lloyd Kurtz is a senior portfolio manager at Wells Fargo and head of the Social Impact Investing Team.  He is also a member of the Sustainability Accounting Standards Board.  He has been affiliated with the Haas Center for Responsible Business since 2005, where he oversees the Center's annual Moskowitz Prize for the best quantitative study of social investing, and serves on the Advisory Committee for the Haas Socially Responsible Investment Fund.  

Lloyd did much of the initial quantitative work on the development of the Domini Social Index, the first broad-based social investment benchmark in the U.S., and wrote the chapter introducing it in The Social Investment Almanac.  His paper on the long-term performance of this index, a collaboration with Dan DiBartolomeo, appeared in the Fall 2011 Journal of Investing.  His recent research focuses on the relationship between ESG performance and the competitiveness of firms.  He has published numerous reviews of the social investment literature over the years, most recently the book Looking Forward, Looking Back (2013) for Tilburg University.  

He holds Bachelors degrees in English and Psychology from Vassar College and an MBA from Babson College, and is a Chartered Financial Analyst.