ECON GU 4913 – 004: SENIOR SEMINAR ON MACROECONOMICS [Environmental, Social, and Governance (ESG) Investing]
Faculty: Tamrat W. Gashaw, Ph.D. Email address : tg2681@columbia.edu Office : International Affairs Building 1001A Office hours: MW: 11:00 AM – 12:30 PM and by appointment Course Web site: https://courseworks2.columbia.edu/courses/96153 Class room and time: 1027 International Affairs Building, M. 4:10 -6:00 PM
This course ( ECON GU 491 3 ) is a senior level course on specific topics in Economics and Finance. The purpose of this seminar is to study some topics in Sustainable Economics and Finance/Investing using current empirical researches in the area. In this seminar, topics that are covering Environmental, Social, and Governance (ESG) indicators, both at macro- and micro-levels will be covered. Topics on ESG include: 1. Environmental Issues: • Macro – level : Environmental and Resource Economics, Ecology, Supply and demand of environmental goods and services, pollution, climate change, so on. • Micro – level : Environmental and Resource Economics, Ecology, Supply and demand of environmental goods and services, pollution, climate change, portfolio selection based on Environmental indicators so on. 2. Social Issues: • Macro – level: Social justice with respect to poverty, income/gender/racial inequality, access to health care, education, housing, financial services, and so on. • Micro – level: Micro aspects of Social justice with respect to poverty, income inequality, access to health care, education, housing, financial services, portfolio selection based on Social indicators and/or Socially Responsible Investing (SRI). 3. Governance Issues: • Macro – level : The macroeconomic impact of good governance, political stability, economic systems, regulatory effectiveness/environment, policy environment, political system, taxation, and so on. • Micro – level : The microeconomic impact of good governance at firm level, political stability, economic systems, regulatory effectiveness/environment, policy environment, political system, taxation, and so on. In addition, we consider the portfolio selection procedure/impact of some governance indicators. Most of the students’ research topics in the past as well as the journal articles that we were presenting and discussing were largely focused on topics such as corporate social responsibility,
COURSE AND INSTRUCTOR INFORMATION
COURSE DESCRIPTION:
sustainable investing, performance of companies that pay attention to sustainability indicators, such as diversity in management/board, worker’s happiness, and pollution/environmental issues, will be covered. In particular, questions like: 1) Do companies that pay attention to sustainability (triple-bottom line) outperform others or the market portfolio? 2) Can welfare be enhanced if Environmental, Social, and Governance (ESG) investing is followed? 3) Does resource scarcity in the long run imply companies to follow ESG based investing? 4) Does social pressure lead to ESG based resource allocation? and so on.
ECON UN3211: Intermediate Microeconomics ECON UN3213: Intermediate Macroeconomics ECON UN3412: Introduction to Econometrics
After studying this course, you will be able to: • Goal 1: Understand contemporary topics of Sustainable Economics and Investing.
o Demonstrate understanding of and ability to apply theories of sustainability.
o Develop a basic understanding of ESG criteria for making investment decisions.
o Articulate and present current and past literature that focus on sustainability and related investment strategies globally. • Goal 2: Produce high quality complete research paper on any topics of ESG based Investing.
o Demonstrate ability to identify important sources (i.e., of data, related literature, and materials) that will be used in your paper.
o Analyze these data, literature and materials that you identify and gather to conduct a research on your selected topics.
o Demonstrate ability to clearly communicate and present your analysis and findings in both written and oral presentation forms articulating your work and findings in the class.
1. Textbooks (Recommended) • Ramian and Gregoriou (2016).
Handbook of Environmental and Sustainable Finance .
Elsevier Inc. UK. • Matthew W. Sherwood (2019) Responsib le Investing: An Introduction to Environmental, Social, and Governance Investments . Routledge. 1st Edition. • Peter Camejo (2002). The SRI Advantage: Why Socially Responsible Investing Has Outperformed Financially? New Society Publisher. • Paul Herman, Jessica Skylar, and Gayle Keck (2010). The HIP Investor: Make Bigger Profits by Building a Better World Hardcover . Wiley: John Wiley & Sons, Inc. • Amy Domini (2001). Socially Responsible Investing: Making a Difference and Making Money . Dearborn Trade, a Kaplan Professional Company. • Morgan Simon (2017). Real Impact: The New Economics of Social Change . Hachette Book Group.
PREREQUISITS:
TEXTBOOK AND READINGS
COURSE LEARNING OUTCOMES
2. Articles • See below under the selected Topics for reading.
COURSE FORMAT This course will have two major parts. These are workshop and research. Regarding the first part, I will allocate the first 4 – 5 weeks to discuss some topics on ESG based economic/financial resource allocation. In these 4 -5 weeks, I will discuss some important articles/book chapters/ that need to be considered in order to expose you to the area of ESG or SRI based investment. As any type of workshop, it is you (students) who will determine the quality of each session. My task will be facilitating the discussion and guiding it towards the desired outcome. So, towards this end, students are required to select and present articles on related economic issues from journals (see the list of articles for reading at the end), newspapers, books, and other sources that are related to the main theme of the course. Students are also expected to participate constructively in class and for that each student should read all the required/assigned materials, write reflective essays on them, and present or turn them in on time. As for the research part of the course, since this is a senior seminar course, you are required to produce and turn in your final research paper no later than 12:00 PM on Monday, May 11, 2020. The paper should be 15 – 20 pages in length and must have some data to answer a specific research question(s) on the ESG related topics. Econometric analysis is highly encouraged as it is one of the prerequisites for this course. That is, the type of your research should mainly be quantitative research (i.e., theoretical or empirical). However, in situations where by you select an interesting research topic but there is no data for you to conduct empirical research, you will be allowed to do a qualitative research. In order to make it easier and clear for all of you, I break your research activities by topics and dates. See the tentative timetable below in the final project sections and due dates table.
EXAMINATIONS AND GRADING
Your grade will be based on article presentations that are assigned to you, class participation and discussions, reflective journals, company profile report, research proposal and final research project/essay. It will be specifically as follows: Article Presentation: 10% (5% for the first article and 5% for presenting your selected article) Reflective Essays (2-page article reflection for every article you read (present & discuss)): 10% ESG Company Profile: 10% (You are expected to select at least three companies of your choice and assess and rank them based on ESG criteria) OR Social Impact and Sustainable Finance Project: 10% (See the detailed instruction below) Attendance, Class Participation, and Discussions: 10% Research Proposal: 10% Final Research Paper: 50%
Article Presentation: This article/book chapter presentation is 10% of your grade and it will be a semester long process. This is an individual assignment in which each student will be assigned at least one article or a chapter of a book (from the above listed class material) and each of you are also expected to select one of your own articles that is related to your research topic to present it in class. The assigned student is expected to critically read the material and present in the class. For each article presentation, there will be another student who will be assigned as a discussant. The responsibilities of the discussants are 1) read the article assigned, 2) discuss the article and ask the presenters questions and 3) write a reflective essay on the article s/he discusses. Reflective Journals/Essays: These essays will be due on April 15, 2019. Please note that these papers are 15% of your final grade. Each student will write a two-page reflective essay on the articles or book chapters that are assigned as a reading assignment or discussion topics. The Reflective Essay will be evaluated based on the following contents: • Description: Identify the main objective(s) of the material and what are its contributions? Your description needs to have: a) the thesis, main point or main concept of the material that the author is trying to communicate in simple one or two sentences; and b) your summary of the major ideas supporting or criticizing the thesis and the author’s argument.
• Analysis: Analyze the material’s major strengths, weaknesses, and limits of its theses and argument.
• Reflect/Apply: What did this material mean to you? How can you apply it to real life situation, understanding or experience? What questions, issues, disagreements were raised for you?
How can it be improved? Attendance, Class Participation, and Discussion: Attendance and participation will be 10% of your total grade. I will prepare and bring a class participation sheet in each class period or I will take note on individuals that are participating in each class. At the end of the semester each student must have his/her name on that participation sheet or note. If you are missing a class (excused or unexcused), you will be writing a one-page report that demonstrate you talk to your friends or classmates and you are catching up on what you missed in class on that particular day. If you fail to do so, I will deduct penalty points from the total attendance and participation points. However, if you miss onethird or more of this class times, you will automatically fail in this class and I transfer “F” to the registrar’s office as your final course grade. Final Research Proposal: This project proposal is due on February 24, 2020. Please note that this paper is 10% of your final grade. The main goal of this proposal is to encourage students to formulate a clear and researchable economic problem, review related literature, identify data sources and appropriate methods of data analysis.
1.) You are to choose a topic in Sustainable Economics and Finance (i.e., something similar to the suggested topics list) and then get your topic approved before you start conducting research on your approved topic. [Turn in your topic by 02/10/2020] 2.) Use your approved topic to write a 3 – page proposal. The proposal must be double spaced, have approximately 1-inch margins, and use a 10- or 12-inch font. The paper will be graded as follows:
Clear definition/explanation of the research question 40 Significance of the research 20 Idea Originality 20 Data sources and proposed method 20 Total Points 100
Social Impact and Sustainable Finance Project: The project is due: April 22, 2020. However, its presentation will be on the Monday of that week on April 20, 2020. Please note that this paper is 10% of your final grade. This is to give you and your group an opportunity to think about, research on, and come up with a solution to one or more of today’s wicked challenges. These challenges are social, environmental, and governance related problems. These problems are significant enough to be addressed by the current system, that is, if solving these problems were easy and profitable, either governments or corporations could have tackled them long time ago. No one has solved them because the current profit-maximization and individual utility-maximization system is not attractive or conducive for local or multinational corporations to come up with a workable model to address them or many individuals to think about them as the driving cause for life. Most of the courses that you have been and will be taking are not designed to help you work on a project that encourage you to follow your heart, passion, and calling in changing the community and your world with little or no financial rewards at all. For this project, your idea is evaluated by how much environmental, social, and good-governance impact it may have in your village, town, community, state, country or world. Towards this end, you are encouraged to research a given social problem that you have been thinking about, has personally affected you, your family, friends, and community, and propose a workable solution for it. At this stage, your idea/solution need not be perfect but a little bit different (out of the box) and plausible. Your proposed solution for the problem you researched can be a new business that either directly addresses and tackles the problem or indirectly by using its proceeds to tackle the problem. It can also be a policy change (i.e., through advocacy work), bringing different stakeholders together to address the issue or work with donors or philanthropists in the area to direct their resources for the good of the society. If your idea affects many people in the community, that would be a huge success. However, if your idea is helping even a single person’s life that is still a big success and it needs scaling. I strongly recommend you not to be afraid to be bold, unorthodox, propose out of the ordinary idea, challenge the status quo, and change the current wisdom/system as long as your idea is the best idea to change lives for the better. Do not also be afraid to propose changes that are distributive for the existing social norms and widely accepted practices, as there is no such.
thing as perfect norm, perfect system, perfect practice or business model. If it were perfect, it could have solved the problems that you will be working on. The specific instruction for this particular assignment is as follows: 1. If you prefer, form a group of 2 – 3 students for this project; 2. Select the wicked problem in which you may find passion, meaning, and calling; 3. Conduct a detail research on the selected problem (i.e., support evidence for the rationale why you selected this problem, the significance of its effect and how it affects your community); 4. Propose a solution for your selected social challenge preferably in the form of a new “start-up” or “business” so that its main focus is to generate enough resources to tackle your particular social problem; and 5. Write a (social) business plan for your “start-up” idea. At this stage, I do not expect you to write a perfect business plan but it serves you as practice for the many business plans you will be writing both during your school years and beyond. For this assignment, I am very much interested in your idea (i.e., proposed solution) than the quality of your business plan. If your idea is among the few that are worth pursuing, you may work on it further individually or as a group. If successful, you may be working on your own start-up idea both as a student and beyond instead of searching for jobs in the job market after your graduation. I wish you a very Good Luck and please do not be afraid to try something new that is worth trying and even fail. Although, evidence shows that more than 50% of new start-ups fail within the first 5 years of their existence, it should not prevent you from trying. Final Research Paper: This paper is worth 50% of the final grade. You are expected to complete a research paper of 15 – 20 pages (double-spaced; about 5000 words not including charts, tables, and references). The basic outline will be the as follows: • First 1-2 pages should introduce the issue and how it matters in contemporary economics. In this section of your project, you need to discuss the background of your research problem as to why it is important and also clearly define the purpose/aim/objective of your chosen topic.
• The next 1-2 pages should discuss the significance of your research, its scope and limitations as to which aspect of the topic will not be addressed in your study, and some preliminary results of your research.
• The next 4-8 pages should discuss how economists have analyzed this topic. What is the framework that economists used to assess this issue? What conclusions have been reached? What disagreements remain? This is primarily a literature review.
• The next 1- 2 pages should discuss what type of data is required? How it will be collected? From which sources it will be gathered? Why this particular information is needed in your
research? And present some descriptive statistics of your gathered data (i.e., graphs, tables, means, variance etc.) • The next 1- 2 pages should discuss what type of data analysis method is required? Why this particular method is needed for your research? And how can this method be used in the context of your research? What are you testing by using this model/method?
• The next1 -2 pages should explain what kind of data transformation or changes have been used before data analysis? Why were these transformations needed? What is the purpose of using a particular data or transformed data in line with your paper’s objectives? • The next 2 – 5 pages should discuss the main findings of your analysis and answer your research topic (i.e., economic problem) that you selected to address. How is your result different or similar from previously done similar papers? What is your main new finding or contribution regarding your research topic?
• The final 1 -2 pages will conclude the paper and forward some policy recommendation based on your findings.
• References cited in the paper should follow standard modes of citation.
FINAL PROJECT SECTIONS AND DUE DATES
ECONGU 4913 SENIOR SEMINAR PROJECT Item Description Deadline TURN IN YOUR TOPIC 10-Feb TURN IN YOUR PROPOSAL 24-Feb INTRODUCTION 11-Mar LITERATURE REVIEW 11-Mar DATA AND METHODOLOGY 23-Mar PRELIMENARY RESULT 06-Apr RESULT DISCUSSION 20-Apr CONCLUSION 04-May FINAL DRAFT 11-May
Make-up Examination Policy: There is no make-up for this course.
Course Expectations: There is an attendance policy for the course. I may not take attendance in every class as it is an upper level class and also due to time constraint, but consistent attendance is strongly
recommended for good performance in this course. Failure to attend class regularly affects your performance. Attendance and participation are an integral part of the learning process, and success in this course cannot be achieved by simply reading the text. I will also present material in class that will not be found elsewhere. During each class students are expected to avoid carrying on private conversations, reading newspapers or working on assignments from other courses. In addition, you are also expected to turn off your lap tops, cell phones, tablets, pagers, and PDAs prior to entering class unless we need them in class for the purpose of this course as determined by me. You may be asked to leave the classroom if these policies are violated or I’ll deduct points from your overall score. Important! The only email address that should be used for communication is the email address associated with UNI@COLUMBIA.EDU ID. Statement on Academic Integrity: As all classes in the University, the Honor Code established by the students of Columbia University will be effective in this class as well. If any student is found violating academic integrity, that is cheating, plagiarizing, and committing other academic dishonesty, cannot be tolerated and actions will be taken by me as well as school Deans will be notified. For details of student’s honor code see http://bulletin.columbia.edu/generalstudies/undergraduates/gs-honor-pledge/. Basic Rules for this Course: 1. Always come to class prepared to learn and participate in class 2. Always ask questions when you don’t understand something 3. Always challenge yourself to do your best in this course 4. Always show respect for everyone in the class – classmate, TAs, the professor, and YOURSELF. 5. Always keep academic honesty and integrity by affirming the honors code. 6. Attempt to attend all recitations and office hours by TAs in order to get additional help. ODS Accommodations: If you are a student with a disability and have a DS-certified ‘Accommodation Letter’ please notify me at least 2 weeks prior to the test dates listed above. If you believe that you might have a disability that requires accommodation, you should contact Disability Services at 212854-2388 and disability@columbia.edu. For further information and resources on ODS accommodations, please refer to statement online at http://www.college.columbia.edu/rightsandresponsibilities.
