Department of ECONOMIC SCIENCES (ECO)

Programme Name: Climate Finance and Sustainability (CFS)

Module

Module Title

Credit

Description

Content

ECO921

Business

Environment

& Strategy

This module is designed better to understand

macroeconomic dynamics within the business

and the economy. It also offers an understanding

of how the business will succeed in a dynamic

business environment with competitive

strategies.Finally understanding how business

decisions are made.

● Macroeconomics: Key Macroeconomic Variables

and their relevance to Business, Basics on

Monetary and Fiscal Policy, India's Economic

Environment, Green Banking and Sustainability,

Central bank vs Government in Climate Risk

Management.

● Understanding Open Economy: Balance of

Payment, Capital and Current Account, Exchange

Rate Determination, Business Cycles, International

Trade, Environment, and Climate Change: CBAM –

Free Trade, WTO Negotiations.

● Business Environment: Concepts, Internal and

External environmental variables, Introduction to

Risks - Political, Legal, Environmental,

Technological, Reputational Risks.

● Strategic Management: Environmental Scanning,

Industry Analysis, Internal Scanning, Sustainable

Value Chain, Product Life Cycle.

● Strategy Formulation: Business Strategy and

Corporate Strategy (climate change), Competitive

Tactics and Strategies, Basic types of Strategic

Alliances, Portfolio Analysis of Business Units or

Products offered by a Company.

● Case Analysis: Detailed procedure involved in a

Case Analysis.

ECO922

Foundations

of Finance

To provide a foundational understanding of

finance and accounting. The module will prepare

the students for advanced knowledge of

electives and real-life applications.

● Measuring the Time Value of Money: Future and

Present Values, Annuities, Perpetuities,

Compounding and Measuring Returns, Time Value

of Money v/s Sustainability

● Risk and Return Analysis: Basics of Portfolio

Construction, Mean-Variance Framework, Optimal

Portfolio Analysis with Riskless Asset, Capital

Allocation Framework, Optional Portfolios with

Multiple Assets, Riskiness of Portfolio and Types

● Fixed Income Securities: Bond and its Types,

Valuations, Yield Curve and Duration, Green

Bonds

● Derivatives: Mechanics of Futures Markets,

Forwards Contracts, Valuations, Options - Payoff

structure, Basic Trading strategies using Options,

Vanilla Swaps

● Basic Accounting of Firms: Financial

Statements, Income Statement, Balance sheet,

Cash flow Statement, Discussion on CSR Funds

● Financial Analysis Techniques: Financial Ratios

- Activity, Liquidity, Solvency, Profitability, and

Valuation Ratios, Capital Structure of the Firm,

Business Risk and Scenario and Simulation

Analysis, Environmental Costs, and Negative

Externalities.

ECO923

Data Analysis

in R and

Python

The stream of climate finance and sustainability

requires workable exposure to data analysis

skills. This module is designed to fulfill the need

for data analysis requirements with balanced

exposure to theory and hands-on training in R

and Python. Another added feature is to analyze

the data based on its nature and composition.

● Introduction: Overview: Different types of Data

(structured and unstructured), Basic Statistics, and

Graphical Analysis.

● Introduction to R and Python: Introduction to R

and Python Environments

● Linear Regression: Assumptions, Diagnostics,

Specifications, and Forecasts

● Panel Data Modelling: Basics of Panel Data

Modelling – Fixed and Random Effects and GMM

● Cross-sectional Data Modelling: Logit, Probit,

Tobit, and other Variants and their Applications

● Time-series Modelling: Basics of AR and MA,

ARIMA Modelling and Forecasts

ECO924

Introduction to

Alternative

Finance

This module exposed different derivatives

products and their valuations.The Module will

first introduce the products and then analyze

them deeply from the perspectives of their nature

and investment attributes. Understanding

alternative finance is crucial as it helps analyze

carbon products efficiently and may also help

launch a new product.

● Forwards, Futures & Options: Valuations and

Cost of Carry Model (seasonal & non-seasonal),

Convenience Yield, Spread Arbitrage, Pricing of

Forwards for Storable Consumption Commodities

● Electricity Derivatives: Spot Market of Electricity:

DAM, DAC, TAM, Daily-term Ahead Market, Price

Discovery Process, Indian Electricity Derivatives

Market

● Weather Derivatives: Spot Market of Electricity:

DAM, DAC, TAM, Daily-term Ahead Market, Price

Discovery Process, Indian Electricity Derivatives

Market

● Carbon Derivatives: Cap-and-Trade, CER, ERU,

and Emission Trading Standards, Switching Prices,

Carbon Credits

● Freight and Water: Functioning of Freight

Exchanges, Freight Indexes, and Water Derivatives

Valuations

● Hedging and Speculation with Futures: Types of

Hedges, Profit Margin Hedging, Inverse Hedging,

Enhancements, Speculation, and Investment

Process, Cross-hedge, Tailing the Hedge

ECO925

Climate

Change

Finance and

Investment

The Module aims to provide students with the

macro-level knowledge and understanding of

principal concept upon which climate change

policy is based , a framework on how the global

political environment , government and

businesses manage the business risk and how

to quantify the scale of the challenge in terms of

the value of assets at risk and integrating climate

risk into investors framework.

● Political Economy of Global Environment:

Global Firms in International Environmental

Politics, Business Power and Business Conflict,

Overconsumption v/s Overpopulation Debate,

CASE Study on Global Climate Change

● Global Climate Environment & Business Risk:

Global Environmental Policy Norms, Energy Policy,

and Climate Change, Trans-national Environmental

Activism, Business as a Global Actor, International

Negotiations, Corporate Climate Risk - Regulatory,

Physical, and Business Risks

● Role of Government and Financial Institutions

in Adapting Climate Change: Introduction to the

Governmental Tools and Institutions used to

Support Climate Finance Objectives, Mapping

International and Domestic Climate Finance and

Investment, The role of Public Finance Institutions -

Domestic Promotional Banks, Multilateral

Development Banks, Export Credit Agencies

● Impact of Climate Change on Finance: Physical

Impacts on Unregulated Sectors, on Carbon-

regulated Sectors and Financial Services,

Institutional Investors, and their Activism

● Climate Finance: Determinants of Climate

Finance, Climate Policies: Mitigation and

Adaptation, Introduction to Clean Energy Finance,

Ethical Considerations with National and

International Climate Finance

● Financial Mechanism and Instruments:

Economic Instruments for Climate Change

(concession finance, blended finance, bonds,

guarantees, results-based payments), Climate Risk

and Stock Pricing, Pollution Premium, Corporate

Risk-taking Behaviour, Risk Management

Strategies amid Climate Change Risk.

ECO926

Carbon

Pricing,

Trading and

Markets

To provide a theoretical and practical

understanding about carbon pricing , trading and

markets. The exposure to different carbon

trading mechanisms, carbon accounting and

carbon offset markets are some of key features

of this module.

● Overview of Carbon Pricing: Fundamentals of

Carbon Pricing, Market Failures, Externalities,

Coase Theorem, Carbon Taxes, Carbon Markets,

Institutional Topics in Cap-and-Trade International

Carbon Markets and Future of Carbon Pricing

● Global Carbon Markets: Introduction to Climate

Meetings – Kyoto and Paris Agreements, CDM, JI

and CERs and ERUs, Cap-and-Trade, Global

Emission Trading Platforms, EU-ETS, and other

Markets, their Comparative Analysis

● Voluntary Carbon Market: Carbon Accounting-

Footprints, Auditing of Carbon, Scopes 1-3 of

Carbon Emissions, Carbon Offsetting Mechanism -

Supply and Demand, International Offset

Mechanisms, Voluntary Carbon Offset Standards –

Verified Carbon Standard, Gold Standard, Plan

Vivo Standard, American Carbon Registry, SBTi

Commitment

● Carbon Offset Market: Voluntary Offsetting

Market, Carbon Offsetting and Reduction Scheme

for International Aviation (CORSIA) and its Traded

Instruments, Buying and Selling Offset Credits –

Forward and Spot Sales. Global Offset Exchanges

– Voluntary Carbon Emissions Offset Futures –

Basis Markets

● Carbon Border Adjustment Mechanism: CBAM

and its Operation Rules. Its Impact on Cross-

border Trade and Developing and Developed

Countries Relations, CBAM and Carbon Leakage

and its Impact on Carbon Offset Market

● Emission Trading in India: PAT Analysis, Escerts

and RECs Specifications, Trading of Escerts and

RECs on Energy Exchanges. Future Directions of

Carbon Trading in India

ECO927

Introduction to

Sustainable

Finance

This module provides an understanding of

current trends of integration of environmental

and social criteria in the investment process. It

engages in reflections about the potential for

impact of different ESG strategies for real

economy and environment. Understand and

apply key concepts to asset allocation and

portfolio analysis using ESG data using available

software.

● ESG Materiality and Responsible Investing

Approach: 3 pillars of ESG Model and Selection of

Material ESG Issues, Screening, Thematic and

Selecting Responsible Investment Approaches

● ESG Ratings and Assessment of Corporates:

Anatomy of ESG ratings or ESG Score,

Characteristics of ESG Indicators and Ratings,

Commercial players in ESG ratings, Sustainalytics,

MSCI, RepRisk ESG Business Intelligence, Ceres,

JUST Capital

● Responsible Investment across Different Asset

Classes: Equities, Fixed Income, Real Estate,

Commodity Investments, Mutual Funds, Indices,

ESG in Managing Sovereign Wealth and

Government Sponsored Funds, Future of ESG

Investing

● Asset Allocation and Portfolio Analysis: Risk

and Return Assessment for ESG Portfolios, Asset

Allocation and Portfolio Analysis, Concept, and

Application of Diversification and Hedging,

Comparison of ESG Portfolios and Conventional

Portfolios

● Sustainability and Asset Pricing: Sustainable

CAPM, ESG Integration in Value, Momentum, and

Growth Factors

● Sustainable Blue Economy: Taxonomy of Blue

Economy Sectors and Activities, Blue Economy

and Small Countries and Coastal Population,

CASE on "Impact of climate change on Blue

Economy of the Indian Ocean Region"

ECO928

Sustainable

Reporting and

Disclosure

Practices

The module provides a strategic and technical

understanding about the sustainability reporting

practices followed worldwide with the focus on

social, environmental and governance reporting

standards. This will prepare the students to

● Introduction to Sustainability: Meaning, Scope,

TBL, CSR to ESG

● Sustainability Reporting Framework: Drivers to

Sustainability Reporting, GRI, UN Global Compact,

evaluate the real world cases and transition that

businesses are making towards sustainability.

Principles of Responsible Investing, Integrated

Reporting Practices

● Legal Framework, Conventions, and Treaties:

Brundtland Commission, Kyoto Protocol, Bali

Roadmap, UN Conference on Sustainable

Development, UN Paris Agreement, COP26,

COP27

● Concept of Circular Economy: 10 R’s, Steps

towards a Circular Economy, Principals for Circular

Economy

● Concept of Environmental, Social and

Governance: ESG Disclosures and its importance,

Greenwashing, ESG Reporting Frameworks,

Comparison of ESG, SRI and Impact Investing

● Case Analysis: Welspun India Limited: A

Sustainability Journey

ECO929

Machine

Learning for

Climate and

Carbon

Finance

To provide a practical exposure to machine

learning techniques including supervised,

unsupervised, and deep learning models for

climate finance and clean energy big data

analysis.

● Fundamentals of Bonds: Basic Terminologies of

Bond Markets, Par Value, Discount, Premium,

Maturity, Coupon Interest Rate, Operations of

Conventional Bonds, Yield to Maturity, And

Collateral, Interest Rate Risk, Credit Risk, And

Credit Spread

● Fundamentals of Green Bonds: Green Bond

Basics: Current State Of Play, The Sustainable

Debt Market, Green Bond Definitions, The Green

Bonds Taxonomy & Classification Systems, Green

Bond Policy Landscape

● Green Bond Pricing: Basics of Yield Curve,

Green Bonds Pricing in the Primary Market, Spread

Compression, Greenium, On The Curve, New

Issue Premium, Secondary Market Analysis –

Vanilla Spread, Vanilla Average

● Green Bond Market Development: Green Bond

Market Development: Global and Regional;

Sovereign Green Bond Market Evolution, Benefits

and Impact and Transition Finance, International

Benchmark, and some Relevant Case Studies

● Green Loans & Green Microfinance:

Fundamentals and its Mechanism, Benefits and

Valuations, Principles, Assessment of Green

Microfinance

● Sustainable Debt Market in India: Social &

Sustainability and Sustainability-Linked Bonds,

Sectoral Overview of Green Bonds, ESG Funds,

Taxonomy, Reporting and Regulatory Ecosystem

and Current Outlook

ECO930

Green Bonds

– Pricing and

Valuations

The aim of this module is to provide an in-depth

understanding about the green bond markets

and their associated dimensions in the primary

and secondary markets. The sustainability and

sustainability-linked bonds, green loans and

green microfinance are some of the highlights of

the module.

● Fundamentals of Bonds: Basic Terminologies of

Bond Markets, Par Value, Discount, Premium,

Maturity, Coupon Interest Rate, Operations of

Conventional Bonds, Yield to Maturity, And

Collateral, Interest Rate Risk, Credit Risk, And

Credit Spread

● Fundamentals of Green Bonds: Green Bond

Basics: Current State Of Play, The Sustainable

Debt Market, Green Bond Definitions, The Green

Bonds Taxonomy & Classification Systems, Green

Bond Policy Landscape

● Green Bond Pricing: Basics of Yield Curve,

Green Bonds Pricing in the Primary Market, Spread

Compression, Greenium, on The Curve, New Issue

Premium, Secondary Market Analysis – Vanilla

Spread, Vanilla Average

● Green Bond Market Development: Green Bond

Market Development: Global and Regional;

Sovereign Green Bond Market Evolution, Benefits

and Impact, and Transition Finance, International

Benchmark, and some Relevant Case Studies

● Green Loans & Green Microfinance:

Fundamentals and its Mechanism, Benefits and

Valuations, Principles, Assessment of Green

Microfinance

● Sustainable Debt Market in India: Social &

Sustainability and Sustainability-Linked Bonds,

Sectoral Overview of Green Bonds, ESG Funds,

Taxonomy, Reporting and Regulatory Ecosystem

and Current Outlook.

ECO931

Financial

Modelling to

Clean Energy

Products

Understanding the basic tenets of equity and

financial derivatives required tools. This course

is designed to provide an in-depth understanding

of the tools and techniques are necessary for

analyzing the financial data of different

frequencies.

● Overview: An overview of Clean Energy Finance

and its Investment Attributes, Significance of

Statistical Modelling with Conventional Equities and

Other Alternative Assets, International Clean

Energy Indices and their Trading Attributes

● Dynamics of Clean Energy Equities:

Fundamentals of Clean Energy with Crude Oil and

other Energy Products, Technology Stocks, Green

Bonds and ESG Ratings, Calculation of Systematic

and Non-systematic Risk of Clean Energy Equities

● Price Discovery Process: Modelling Cointegration

Process, Market Integration and Relational

Analysis, Price Discovery in the Commodities

Derivatives Market, Applications in offset Products

● Risk Management in Energy Products: Methods

to Calculate Time-Varying Volatility, Univariate and

Multivariate Setup, Calculation of Dynamic Portfolio

Weights and Hedge Ratios, Volatility Spillover

Analysis, Green Bonds vs Conventional Bonds

● Modelling Multivariate Setup: Introduction to

Multivariate Time-series Models and Estimation of

Causal Inferences between Green Bonds and

Energy Products and their Interactions with

Economy-specific Fundamentals

● Firm-level Analysis: Firm-Level Analysis, Data

Curation and Modelling, Application of Panel Data

Models, Time-Series and Cross-Sectional

Validations, Case Studies

ECO932

Project -I

To Provide a practical and applied exposure to

the covered module. Students will be

encouraged to formulate a research problem

and submit a report.

Capstone Project