SC Johnson College of Business Offers New Climate Finance Course

By: Janice Endresen
Photo of a crystal globe on a bed of moss overlaid with ESG icons for Environment, Social, and Governance, as well as world sustainable environment concepts/icons.

Last fall, the Cornell SC Johnson College of Business launched a new course, Climate Finance, for undergraduates in the Charles H. Dyson School of Applied Economics and Management. This spring, a graduate-level version of the course is underway for MBA and other master’s degree students at the Samuel Curtis Johnson Graduate School of Management. Alissa M. Kleinnijenhuis, visiting assistant professor of finance at the SC Johnson College, developed and taught the inaugural courses. In this Q&A, learn about what motivated her to teach climate finance, why climate finance matters, and what the course is all about.

What motivated you to design and teach a course on Climate Finance?

Kleinnijenhuis: While pursuing my PhD at the University of Oxford, I focused on financial crises. In the wake of the 2007-08 financial crisis, when a billion-dollar subprime mortgage problem turned into a trillion-dollar global financial crisis, studying how to design financial systems to reduce systemic risk struck me as the most valuable topic to study. I began to realize that physical climate risks (such as more frequent and severe extreme weather events) and climate transition risks (such as climate mitigation regulations) pose a risk to financial stability.

photo of Alissa Kleinnijenhuis in formal business attire standing in a garden with a older building with arched windows in the background.
Alissa Kleinnijenhuis

I decided to focus my research on climate finance because I perceived the climate crisis to be the overarching risk facing mankind in the 21st century, overshadowing all other types of financial risk.

Finance is key to solving the climate crisis. The obstacle to the green transition is not the lack of clear climate science or scalable clean technologies; it is the social science of financially incentivizing the world economy to move away from fossil fuels toward clean energy sources. The climate crisis is a fossil fuel crisis, and can be solved by funding the transition. Of the 41.46 billion tons of global CO2 emissions in 2022, 37.15 billion tons were emitted by burning fossil fuels.

On our current course of emissions, mankind will soon witness that large parts of our planet earth will become virtually uninhabitable, severely impeding life on earth, the number of people earth can sustain, and potentially causing our extinction.

I believe that business students should learn about sustainability practices and climate considerations in business. Climate risk is an issue central to business in the 21st century and business schools must educate students about how climate change and climate finance will affect business and daily life.

What are your key goals for students who are taking this course?

Kleinnijenhuis: My goals for students include learning about the risks posed by climate change and biodiversity loss and about transitioning to a green economy. We cover physical, transition, legal, and biodiversity risks that firms face; climate risk disclosures; climate stress tests; and how to hedge climate risks.

Students also learn about sustainable investing and various entities’ responsibilities in the green transition. We cover the role of governments, financial regulators, international climate agreements, and central banks in the quest for net zero. We then take a deep dive into green corporate finance, ESG investing, impact investing, and public-private investment partnerships for blended finance.

What is unique about your Climate Finance course?

Kleinnijenhuis: What makes my Climate Finance course special, in my view, is that it creates a breeding ground for innovative thinking at the fast-evolving frontiers of climate finance and educates students to become the next generation’s climate leaders—people who can make a real difference in the world. I designed the course to achieve this by:

  1. Bringing together leading thinkers in climate finance to share their ideas and respective expertise;
  2. Collating the latest publications in the burgeoning field of climate finance; and
  3. Enabling students to actively participate in the debate at the frontiers of climate finance.

It is exciting for me that each term I teach the course, I have to update the syllabus because so much new research of high relevance has been published in climate finance. It is also exciting that we’ve been fortunate to have leading thinkers in their respective niche of climate finance join us for guest lectures, including  Allison Herren Lee, former member and acting chair of the U.S. Securities and Exchange Commission, and Timothy Lenton, founding director of the Global Systems Institute and chair of Climate Change and Earth System Science at the University of Exeter.

We also welcomed leading climate finance investors such as Abhishek Bashkar, a senior energy specialist at the Climate Investment Funds housed within the World Bank; and climate finance scholars such as Carolyn Flammer, economics professor and director of the Sustainable Investing Research Initiative at Columbia University, and Martin Oehmke, professor of finance at the London School of Economics, an expert on green financial regulation.

How applicable is the content of your course to the real world?

Kleinnijenhuis: In the Climate Finance course I am teaching this spring, Johnson School students are applying the knowledge and skills learned to real-world projects with real-world partners. Many teams working within organizations across the world are doing fantastic work in climate finance, including teams at the World Bank, BlackRock, the International Monetary Fund, the United Nations, the International Finance Corporation, the European Investment Bank, the Climate Policy Initiative, and many more. Our students work with institutions in both the public and private financial sectors on real-world climate finance problems.

My hope is that several students will be so inspired by the real-world problems they contribute to solving that they decide to pursue a career in sustainable finance. The decisions we make this decade will affect the fate of humanity for the next thousands.