How Sustainability is Changing The Financial Sector

Name: How Sustainability is Changing The Financial Sector
Rating: 4.5 (5614 reviews)

New Risks, Challenges and Business Opportunities for Banks and Investors under Environmental and Social Responsibility

Created byAna Lucas

Last updated 7/2026

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What you'll learn

What is Sustainability and how it is transforming Banks, Insurers and other Financial Institutions
The way Climate Risks become Financial Risks and put the whole Financial Sector in Danger
What are Environmental and Social Governance Principles (ESGs) and how do they help Banks and Corporations
What is Sustainable Lending and Impact Investing and Why Revaluating Corporate Loan Portfolios is Necessary
How Rating Agencies are Changing Their Approach to Rating Scores because of Sustainability
New Products and Business Opportunities: Green Loans, Green Bonds, Sustainability Linked Products
Why Banks should Stop financing Fossil Fuels and must de-carbonize their Loan Portfolios
How Regulators are aligning Governance to face all climate risks and mitigate impact to the Financial Sector
The importance of doing Business with care and responsibility for the Planet and the People
How are FIs reporting on Scope 3 emissions and why these matter
How the Carbon Markets are bringing new Risks and Opportunities to the Financial Sector

Course content

7 sections • 30 lectures • 5h 13m total length

Introduction4:38
What is Sustainability and Why it Matters for the Financial Sector9:00
Sustainability means doing business that is socially and environmentally responsible, addressing rising emissions and climate risks. The financial sector must realign with societal responsibility, managing risk while funding sustainable products.
Impact Investing or Investing with a Purpose7:17
A Very Controversial Topic: Financing Fossil Fuels16:50
Explore how financing fossil fuels affects the financial sector, and how banks can drive a net-zero transition through transparency, regulation, climate risks, and renewables.

How Climate Risks are Financial Risks and how ESG can assist the Risk Assessment12:39
Climate risk categories: Physical&Transitional Risks. Transitioning to Net Zero9:07
How climate risks may disturb the functioning of Financial Markets8:45
ESG example: Assess, quantify and mitigate Climate Risks and their impact12:19
ESG updates credit analysis by quantifying environmental and social risks to assess borrower performance and mitigate climate-related impacts from outside-in and inside-out perspectives, including supply chain and product safety.

SGDs and The importance of Governance for the Financial Sector and Businesses7:11
Explore how governance underpins trust and accountability in financial institutions, linking environmental and social governance to social development goals, addressing climate risk, and highlighting disclosure needs for sustainable strategies.
The Principles for Responsible Banking (PRBs)7:56
Align banks with the principles for responsible banking (prbs), emphasizing transparency, accountability, governance, targets, and client collaboration for sustainable finance, inclusion, and climate action.
Guidance for FIs: How to set up a Sustainability Strategy and proper Disclosures10:30
The crucial role of Insurance in the Transition to Net Zero13:32
Explore how the insurance industry underpins finance and enables sustainable transition, from risk management and governance to insurtech innovations, climate risk disclosure, and net zero commitments.
Update 2026: The dismantling of Net Zero Alliances: Real Case Studies4:58

Recognizing the Issue, Taking Responsibility, Being Accountable15:43
Recognize how sustainability reshapes bank governance from the board to top management and touches every department. Drive risk management, lending, client relationships, and human resources toward transparent accountability and decarbonization.
How the Financial Sector may Transition from Financing Fossil Fuels15:39
Banks must evaluate and transition their portfolios from fossil fuels to a greener loan portfolio, with risk management, client relationship teams, and sector specialists collaborating to support clients’ transition strategies.
Update 2026: Transitioning from Fossil Fuels in a Geopolitical Chaos2:49
The Green contribution of FINTECH3:54
Embrace a new/Sustainable Business minding ESG-related Criminal Litigation10:50
Explore how financial institutions advance sustainability by embracing ESG risk, improving governance and disclosures, and seizing opportunities in green financing, while navigating litigation and reputational risks.

New products/Business Opportunities/Sustainable Finance9:28
Green bonds, green loans, and sustainability linked loans expand sustainable lending to meet investor demand for returns and social impact. Regulatory shifts and Paris-aligned goals drive funding and transparency.
Sustainability Linked Loans and Green Loans8:57
Learn how green loans and sustainability-linked loans finance environmental and social projects, governed by LMA principles, with ESG targets guiding pricing and a transition to a low-carbon economy.
Green Bonds and Sustainability-Linked Bonds12:44
Financing Supply Chains in the context of Sustainability6:09
Explore how sustainability shapes financing of supply chains, linking corporations' ESG goals with their suppliers. Banks and investors evaluate supplier risks and fund transformations to resilience and net-zero amid disruptions.
Sustainable Insurance - Product Showcase1:54
Explore how the insurance sector enables a net zero transition through COP26's product showcase, with coverage across ESG, green economy, hydrogen, and carbon offsets to mitigate transition risks.
The surge of Green/ESG/Sustainable Investment Funds9:44
Investors increasingly seek green, ESG, and sustainable funds that emphasize environmental and social responsibility, governance, transparency, and due diligence to ensure long-term resilience.
Why are ESG Funds under scrutiny?

ESG Rating Agencies, ESG Ratings, Sustainability Reports13:08
Learn how ESG ratings and third-party assessments shape sustainability reports and investor decisions. Trace the evolution of rating agencies, industry-driven methodologies, and transparency challenges that require due diligence.
Crucial Topics in ESG Ratings - a Real case
Controversies around ESG and Climate Risks - Tesla, HSBC - How to argue18:57
Explains two recent ESG and climate-risk controversies, including Tesla and HSBC, clarifying industry-based ESG comparisons and urging evidence-based assessment of long-term risks.

Reporting Scope 3 (Financed) Emissions14:58
Why are Scope 3 Emissions the ones most relevant to describe a Financial Institution exposure to the climate emergency; Understand the concept of Financed Emissions. Insight on the timeline for reporting scope 3 Emissions and where to find guidance for financially accounting and reporting them.
The Emissions Gap: Carbon Credits, Carbon Offsets, Carbon Markets (part I)19:08
How the Emissions Gap leads to the Development of Carbon Markets, how Carbon pricing (pollution pricing) mechanisms work, what are Carbon credits and offsets and how the Carbon Markets differ: Compliance or Voluntary.
What the Carbon Markets mean for the Financial Industry (part II)15:10
The Prons and Cons of the Voluntary Carbon Markets, the eligibility of carbon projects for financing through the Carbon Markets, how the carbon prices are raising new risks and opportunities for Financial Institutions and what new players bring to the sector.
Ongoing and Expected Developments - Summary9:37
Examine harmonization of ESG metrics and regulatory standards, and explore how lending, investment, real estate, and supply chains adapt toward a sustainable, low-carbon economy with climate and social risk considerations.

Requirements

Fair understanding of how Corporate Banks and Financial Institutions contribute to the economy and the society
Basic knowledge of Credit Risk analysis and Risk Management in Corporate Banking
Interest in the principles of Climate Emergency, Inequality, de-carbonization of the Economy, Social Responsibility and Well Being

Description

The Sustainability concept is receiving increasing attention and importance given the acceleration of climate issues and the perceived negative impact that some financing activities have on the environment or in human wellbeing.

While in the past investment and credit decisions were made to balance risks with expected return, a new dimension is now taking priority, based on the notion of 'investing with a purpose'. This means investing and financing activities and businesses that have a positive impact in the environment or the society. At the same time, divesting from businesses that contribute to deterioration is under evaluation. This will have drastic consequences for Banks and other financial institutions, leading to unprecedented changes as loan portfolios/assets under management are originated, re-evaluated, and/or winded up. Other opportunities related to the trading of carbon offsets and development of carbon markets must be considered.

Climate change risks are drastic to the Financial Sector and of extremely importance. They are crucial to the point of engaging the Banks' decision making at all levels, from client acquisition and relationship management, through Top Management - and of course Risk Management and Compliance. Sustainability is now an obligatory integral part of the Banks' strategic planning and operations. New regulatory aspects are being introduced and new Governance and ways of disclosing information and rating institutions are applied.

In this course we will touch upon all the above and also on the controversial topic of why we need Financial Institutions to stop financing flows to fossil fuels. We discuss why Sustainability is as well creating business opportunities and new products and boosting new career functions within institutions. We touch upon the ways banks can navigate to more greener portfolios, analyse how clients may be affected by the increased price of carbon (pollution), the importance of being evaluated by rating agencies for Sustainability parameters, and what does this all mean for the Financial sector's reputation and future.

Course picture copyright credit to Sandra Bulla.

Who this course is for:

Relationship Managers/Sales representatives at Banks, Investment Funds or and Insurance Companies
Credit Officers and Credit Analysts at Financial Institutions
Risk Analysts or Junior Compliance officers dealing with climate risks, portfolio risks, control processes, regulatory procedures
College students interested or studying the impact of Sustainability and Green Finance in Financial Institutions
Financial Advisors
Anyone interested in how Financial Institutions may contribute to a better world by embracing Sustainability
Anyone who deals with new Sustainability-related Risks and/or with Claims from catastrophic weather induced disasters
Junior ESG Analysts in any sector, including in ESG rating agencies

How Sustainability is Changing The Financial Sector

What you'll learn

Explore related topics

Course content

Introduction4 lectures • 38min

The surge of new Sustainability-related Risks in the Financial Sector4 lectures • 43min

The importance of Sustainability Governance, ESG and PRIs5 lectures • 44min

How Sustainability is changing Decision Making5 lectures • 49min

Sustainable Finance: New Business Opportunities6 lectures • 49min

Rating Implications for Financial Institutions, Corporations and Countries2 lectures • 32min

Expected Developments, Summary, Final Remarks4 lectures • 59min

Requirements

Description

Who this course is for: