Introductory description

The last two decades witnessed a substantial increase in the attention paid, both among practitioner and academics to the environmental, social and governance (ESG) dimensions of organizational activities. This trend has been reflected in an increased importance assigned to assessing, quantifying and monetizing the ESG-related factor on the overall financial performance of organizations, but also in an exponential growth in investment strategies that embed ESG measures into investment appraisal and decision-making. In spite of this recent trend, there is still a significant gap between the ubiquity and standardization of tools used in financial measurement and reporting and between similar functions in the ESG space. This course aims to address part of this gap in our practical and academic knowledge by examining on the challenges related to measuring and monetizing social impacts of organizations. In doing so, the course will examine relevant theoretical approaches and use these to build relevant skills. However, this knowledge will then be applied to a real-life situation. This course adopts a hands-on approach – the course’s final assignment will ask develop an investment vehicle, a social impact bond, that uses social impact evaluation and monetization to fund financial investment with a positive social impact.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

Introduction to Social Impact assessment

How analysts identify value-creating drivers

The securitization process

Introduction to Social Return on Investment (SROI)

SROI in practice: Organizational Challenges

Introduction to Impact Investment

Designing Social Impact Bonds

Organizational and Political Aspects of Social Impact Contracts

Case studies will be used throughout this module

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate conceptual and practical understanding in relation to measuring non-financial value
• Demonstrate understanding of different ways of measuring non-financial value drivers and use these in the right contexts
• Demonstrate critical understanding of the challenges related to making ESG measures comparable

Indicative reading list

Serafeim, G. (2020). Social-impact efforts that create real value. Harvard Business Review, 98(5), 38-48.
Yan, Shipeng, Fabrizio Ferraro, and Juan Almandoz. "The rise of socially responsible investment funds: The paradoxical role of the financial logic." Administrative Science Quarterly 64, no. 2 (2019): 466-501.
Lilley, S., Harvie, D., Lightfoot, G. and Weir, K., 2020. Using derivative logic to speculate on the future of the social investment market. Journal of urban affairs, 42(6), pp.920-936.

Research element

Developing an ESG security includes a research element

Interdisciplinary

The module introduces elements from sociology and policy studies

Subject specific skills

Develop a social-impact based financial security
Use, in context, social impact measurement methods

Transferable skills

Team-based learning skills and written communication