Marquette Business Continues to Lead in Sustainable Finance and Investment Education
“Sustainable finance and investing are taking off- and the world’s top business schools are climbing on board” — Wall Street Journal, 6/10/2019
An article in the Wall Street Journal recently declared that sustainable finance and investment education is making its way into higher education curriculum. But at Marquette, that change happened over a decade ago.
In the 2005-2006 academic year, Dr. Sarah Peck developed and taught the course Investment Ethics. Dedicated to understanding the central role that ethical concepts and consequences play in the practice of finance and specifically investments,this course was one of the first of its kind across the country. Taken up and taught by Dr. David Krause, director of the Applied Investment Management program thereafter, the course eventually landed in the capable hands of Dr. Christopher Merker, Instructor of Practice for Marquette University who has taught the course since 2009.
Sustainable Finance and Investment
As the field of sustainable finance and investment has evolved, so has the course. The sustainable finance course today teaches students not only the ethical considerations carried over from the course’s inception, but also how to focus on understanding the environmental, social, and governance performance (ESG) factors of a company as part of the investment analysis process. Broadly speaking, ESG standards allow potential investors to consider the sustainability and social impact of an investment in a company or business. As Dr. Krause notes, investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities. “While ESG metrics are not yet a common part of mandatory financial reporting, we are beginning to see firms make more disclosures available within their annual report or in a standalone sustainability report. We believe these are important risk indicators that need to be incorporated into a thorough evaluation of an investable asset.”
Sustainable Finance in the Classroom and In Industry
Joining the Applied Investment Management program as an Instructor of Practice in 2009, Dr. Merker has continued to educate hundreds of students about ethics in finance. This makes Merker “perhaps one of the longest standing instructors of sustainable finance in the country”, a feat which contributed to his recent appointment to the CFA Institute’s new ESG Industry Standard Working Group. This working group is an international committee working for ESG standards for the global investment industry. Dr. Merker is one of three Americans on the committee of fifteen, which represents seven different countries.
Dr. Merker’s recent invitation to join this select group of world-wide experts was influenced not only by his academic expertise but also his impressive career in industry. Besides teaching at Marquette, and having completed a dissertation focused on sustainable finance, Dr. Merker also works for Robert W. Baird & Co. as an investment consultant with the firm’s institutional consulting group, Private Asset Management, where he provides advice and discretionary investment management services to institutions. Dr. Merker is also a CFA charter-holder, is a frequent speaker at industry conferences and publishes an online blog focused on sustainable finance. He contributes regularly to the CFA’s Enterprising Investor and recently published a book with Dr. Peck in 2019 on governance and sustainable investing.
When asked about what sparked his interest in ESG, Dr. Merker reflects back on one of his first jobs as a staff assistant to Ambassador Jean Kennedy Smith at the American Embassy in Ireland. “My first career experience working as a staff assistant was probably most influential early on where I had a chance to witness the intersection of policy and regional conflict with global implications”.
Merker also feels that a seed of interest may have been planted even earlier in his life. “My other early influence was my high school teacher, Dr. Francis McMann, who did his doctorate in economics at the University of Chicago and studied under Milton Friedman. I took every course he offered: macro and micro economics, American history and political philosophy. He fostered in me a keen interest in political economy, and a strong belief in the inherency and power of human freedom.”
Sustainable Finance Symposium
This year, Marquette took a step even further in embracing the importance of sustainable finance and investment. Dr. Merker, in conjunction with Dr. Matteo Arena, Chair of the Finance Department, Father Michael McNulty from the Center for Peacemaking, and Associate Dean Nadelle Grossman from the Marquette University Law School, organized and held the university’s first Responsible Investing Symposium. The event was so successful, preparations are already being made to expand its size and scope for next year.
Understanding Climate Change and Sustainable Finance
Teaching students about ESG aligns well with the College of Business Administration’s commitment to educating students to be ethical business leaders in the Jesuit tradition. However, the continued effects of climate change has also directly contributed to why understanding ESG factors matters.
This year, the College of Business Administration hosted a special investment-focused event in partnership with the CFA Society-Milwaukee, bringing together Mary Ellen Stanek, Managing Director and CIO of Robert W. Baird & CO., and Dan Fuss, Vice Chairman of Loomis Sayles & CO. These two top investment minds spoke directly to the impact that climate change is having in the investment industry. Dan Fuss, the 2019 Morningstar Outstanding Portfolio Manager award recipient focused much of his discussion on the impact that climate change has and continues to have across all global markets, emphasizing that climate change is here, and will become an even more important component of investment research and analysis.
Dr. David Krause is currently going through a significant revamp of the AIM program curriculum and agrees with the need for a focus on climate change and ESG from a practical and ethical standpoint. “Climate risk is real and it is influencing many aspects of the investment research process. Whether that is through increasing losses for the insurance industry as a result of weather related events or how a portfolio needs to be construed to minimize risk, we will be incorporating more ESG factors into the AIM 2.0 curriculum.”
As the finance and investment industry continue to change, Marquette University business students continue to receive an education that prepares them to be lead impactful, successful, and ethical careers.
