New case explores sustainable investments, profit and purpose
How can you use sustainable investments to align profit with purposefulness? This is the main question of a new case for master and MBA students in finance, economics, business, and sustainability. It was developed by the Case Development Centre at Rotterdam School of Management, Erasmus University (RSM), and discusses the shift from shareholder to stakeholder model – which is even more important than ever during and after the corona crisis. The case study is available through The RSM Case Centre.
Through the case, students will investigate how the financial sector can be a driving force for a sustainable economy. This case study offers a tool to integrate sustainability into investment and credit analysis, which can be applied to any organisation across sectors. It also trains analysts to develop a holistic view of organisations by integrating the ‘separate’ worlds of financials and sustainability.
Integrated thinking in finance
“The driver for sustainable development is integrated thinking. Integrated thinking in finance requires, first and foremost, a mindset that is open to integrating social foundations and planetary boundaries with finance,” says Professor Dirk Schoenmaker, co-author of the case study.
He explains that the current economic system is based on linear growth and consumption, but that planetary resources are limited and running out. The dominant economic model focuses on maximising short-term financial gains for shareholders, and does not adequately address sustainability challenges. One of the biggest challenges for the financial sector is to take a more integrated and long-term approach and to truly add value for all stakeholders.
A shift in mindset
Economic models used in the modern business world were developed in an age when the matters of depleting natural resources and the amount of carbon emissions released were not yet seen as concerning. Instead, they only focus on labour and capital. Similarly, the traditional financial theory focuses on the near-term cash flows.
However, these models are no longer tenable, as now we see that not only economic, but also environmental, as well as social, concerns must be taken into account to ensure the success of a business in the long term. When it comes to finance and economics, it is this shift in mindset – from viewing business in terms of the market and immediate financial gains to something more enduring – that is at the heart of sustainable transformation.
This business case study helps to alleviate this issue by providing an actionable tool that helps to integrate sustainability into investment analysis, which analysts usually struggle with.
Master-level case study
The case study is suitable for master and MBA students in finance, economics, business, and sustainability. It is also suitable for the following electives: investments and lending, environmental economics, development economics, business models and strategy, and sustainability.
The case study is based on Principles of Sustainable Finance (2019), written by Dr Willem Schramade and Professor Dirk Schoenmaker, who are also the co-authors of this case. Their book combines theory, empirical data and policy examples to explain how the financial sector can be mobilised to counter the popular concept that finance is an obstacle to a better world. Prof. Schoenmaker is professor of banking and finance in RSM’s department of Finance, and recently wrote an opinion piece about financial support in Europe in this time of crisis. And Dr Willem Schramade is portfolio manager listed impact equities at NN Investment Partners, and guest lecturer in the sustainable finance course at RSM.
In addition to various other case studies, RSM also offers a free online course: Driving business towards the Sustainable Development Goals.
Case Development Centre
Business students, and even seasoned business experts, can learn from the experiences of other real-life organisations and decision-makers. The Case Development Centre (CDC) at RSM supports case-based management education by turning exceptional business and management experiences into powerful learning tools. CDC connects world-class research, education and business by developing high-quality case studies.
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become critical, creative, caring and collaborative thinkers and doers. Study information and activities for future students, executives and alumni are also organised from the RSM office in Chengdu, China. www.rsm.nl
For more information about RSM or this release, please contact Marianne Schouten, communications manager for RSM, on +31 10 408 2877 or by email at firstname.lastname@example.org.