On December 7, the Royal Bank of Canada (RBC) pledged an additional $250,000 to U of T’s Rotman School of Management to support the Sustainable Finance Project for Students. The pledge follows a successful first year for the project, which the RBC also funded. The purpose of the project is to provide Rotman Master of Business Administration (MBA) students with new extracurricular and curriculum opportunities to integrate sustainability education into their studies.

The new funds will be dispersed over three years, building upon $75,000 that the RBC had already invested on December 16, 2019 to initiate the project’s pilot year. The pilot was organized by the Rotman School’s Michael Lee-Chin Family Institute for Corporate Citizenship, which will continue to administer the new investment.

A successful trial

A number of programs were initiated under the umbrella of the sustainable finance project in its first year. The MBA course calendar was expanded to include a dedicated course on sustainable finance instructed by associate professors of finance Jan Mahrt-Smith and Mikhail Simutin.

The project also funded extracurricular activities, including a flagship Sustainable Finance Week, which featured networking opportunities and research roundtable discussions. Student-led events related to environmentalism in business were also funded, such as the Rotman Sustainability Conference, led by the Rotman Net Impact student group.

A final pillar of the project was the creation of the Sustainable Finance Case Competition, which challenged MBA students to create an eco-friendly investment plan for a $1 billion portfolio.

Participants included 19 teams of students from Rotman, Western University’s Ivey School of Business, McGill University, York University’s Schulich School of Business, and Queen’s University’s Smith School of Business. A team of five Rotman students ultimately took the top prize, winning a monetary award and interview opportunities with RBC.

“We’ve been exploring sustainable finance – ways to align the capital markets with ethical, socially and environmentally responsible objectives – for some time,” wrote Rod Lohin, Executive Director of the Lee-Chin Institute, in an email to The Varsity. “The pilot Sustainable Finance Project last year allowed us to amp up our work in the area, with a number of events across the year, highlighted in a Sustainable Finance Week.”

With trials ahead

Going forward, the Lee-Chin Institute is looking to build on its initial successes by re-hosting its popular offerings from last year. Sustainable Finance Week 2021 is already scheduled for late February, which will once again include a case competition for MBA students.

Additionally, a new course on the relationship between sustainable finance and behavioural finance will be developed and offered to MBA students. Plans also include educational opportunities on how finance can address societal upheavals beyond those posed by the climate crisis, such as those posed by the COVID-19 pandemic.

“RBC’s commitment over the next 3 years is well placed and timely, as we are seeing increased demand from both students and employers for sustainable finance educational and experiential activities,” wrote Lohin. “This year we’ve been able to bring on more curriculum, more events, and do even more with students, industry professionals and scholars.”

The future of finance is eco-friendly

The relationship between financial markets and the environment is rapidly evolving with businesses having to adapt to the climate crisis being a cornerstone of public consciousness.

“Climate-smart innovations are no longer marginal alternatives – they are becoming a massive global market opportunity yielding quality jobs,” reads the Canadian government’s Expert Panel on Sustainable Finance in its 2019 report. “With these shifts, sound environmental stewardship is increasingly intersecting with market access and becoming a critical source of sustained competitive advantage.”

“There’s been a huge shift in the capital markets towards ‘sustainable finance’ – to manage environmental and social risks and seek new opportunities,” stated Professor Kenneth Corts, Interim Dean of the Rotman School of Management, in the December 7 press release by Rotman and RBC. “Working with RBC, we’re preparing the next generation to be ready for this shift.”

The RBC has pledged to invest $100 billion to sustainable finance efforts by 2025.

Editor’s note (January 26): This article has been updated to correct that the competition included 19 teams of students, not 19 students.