Comprehensive course analysis
Who should attend
This course is suitable for both public and private sector practitioners, including entrepreneurs, project developers, private investors, initiator/fund houses, international development finance consultants and managers, plant operators and manufacturers, engineers and advisory professionals (e.g. law firms, business and tax consultants). Other interested parties, such as academics in relevant fields, are of course also welcome to register to the course.
The course aims to explain the many facets of, and perspectives on, climate adaptation finance. Pre-experience in (mainstream) banking and finance is therefore helpful but not required.
About the course
Climate change presents a risk to the global economy and consequently the finance sector. However, it also presents an opportunity for innovative financing to increase the economic and social resilience to climate impacts.
As facilitators of the economy, financial institutions have a central role in the transformation to low carbon and climate-resilient development. Their responsibility is twofold: greening their portfolios towards Paris compatible financing and investments, and reflecting and integrating climate-related risks into their risk management processes. This gradual process involves harmonising short-term business cycles and investment horizons with systemic and long-term thinking by all actors from the financial sector (e.g. banks, asset managers, insurers, pension funds, investment consultants, regulators, rating agencies). This process is supported by public actors who moderate the structural change required for a transition to climate-resilient economies.
This course provides the basics of finance and investment for assessing the financial viability of investments in adaptation projects. It clusters business models to provide an understanding of the parameters according to the project scale and, for example, revenue models, ownership structure, and value proposition, and will link to the financing perspective. Different investors and intermediaries have very different investment strategies, level of risk appetite, return expectations, and investment horizons. Crowding in the right investor for a project is essential to ensure their long-term involvement and the required scale-up of investment volumes.
What Do We Offer?
- An interactive e-learning course including video lectures, PDF scripts, practical exercises, online tests and case studies.
- A discussion forum for course related issues as well as for exchange of opinions and experiences with your classmates and tutors.
- Personalized support from your e-Campus Team.
- The possibility to achieve a Frankfurt School certificate after passing the final exam or a confirmation of course completion after completing the course.
The course takes 6 months assuming 5-7 hours of self-study per week. It consists of 9 units, which build upon each other. You will take the units in sequence and will need to pass an online multiple-choice test before accessing the next unit. The last unit includes a case study assignment that has to be submitted on a fixed deadline. You are not sure if you manage to complete the course within 6 months? No worries! You can apply for a course extension (6 more months) against an administrative fee.
Adaptation seeks to moderate harm or exploit beneficial opportunities. Most of the research on adaptation to date has focused on public spending on adaptation rather than private adaptation, although it may be likely that most of the adaptation financing needs appear with the private actors affected by climate change. Understanding this will help to moderate and potentially accelerate adaptation, as well as address the role of government incentives for adaptation projects. This course will demonstrate that adaptation can appear with different economic and financial characteristics depending on the level we look at it and the individual activity that is considered. Depending on these different characteristics there are different roles for private and commercial actors or governmental institutions in facilitating the structural change towards a low carbon and climate-resilient economy.
Suggestions & Recommendations
This course is designed so that you have the flexibility to decide on the timing and pace of your learning experience. However we will provide you with recommendations for your to take as much as possible from this course.
Your schedule: We will provide you a course schedule including voluntary and mandatory deadlines. The course schedule serves as a guideline for your personal learning schedule and will help you to complete the programme within the given time frame.
Exercises: Even though the exercises in the script are not mandatory we strongly advise that you use them as an opportunity to check your knowledge and to prepare for the final exam.
Networking Opportunities: Use the forum to introduce yourself to your peer participants and to start interesting discussions.
Unit 1: Climate change science – What is adaptation?
This introductory unit will present the science behind climate change and its physical impact, before moving on to discuss the impact of climate change on the economy. It will explore economies need to adapt, addressing the question “what is climate adaptation”, providing the macro perspective of adaptation (UNFCCC definition of adaptation) before moving to the micro perspective of adaptation (what do economies/actors do to adapt?)
Unit 2: Climate science meets climate finance
The Unit will provide an overview of the climate finance landscape to understand the importance and relevance of adaptation and climate resilience in terms of scale and contribution to climate finance. The Unit will explore the main building blocks of international adaptation-related policies, looking particularly at the Paris Agreement to anchor the role of the public sector and public support instruments and policies later in the course.
Unit 3: Coping with damages – the natural role of private and public sector actors
This Unit will provide an introductory overview of the natural roles of actors, presenting the interactions between private and public stakeholders, providing the basis for further analysis into adaptation finance. Private actors must consider how business decisions will change in a changing environment, while public actors must decide how to moderate this structural change (e.g. providing policies, support, information, etc.). The Unit will also introduce the different types of investors and financial intermediaries and an understanding of their decision-making criteria and processes, to answer the overarching question: Why are companies investing in climate and sustainability?.
Unit 4: Basics of finance and investment with a business model perspective on climate-resilient projects
This Unit will shift the focus towards the level of climate investments. Participants will gain a methodological understanding of financing at the project level, including how to assess the financial viability of an investment. There are crucial tools necessary to do this, and this unit will provide the basics of business models, finance, and investment, with a focus on investment calculations (including key terms, typical KPIs) and key specifics of business cases, with a reference to climate adaptation.
Unit 5: Barriers to adaptation finance and the role of support frameworks
This Unit explores why markets alone might fundamentally not be able to trigger adaptation investment in a way necessary to mitigate climate change. It introduces market imperfections, or barriers, which may systematically keep adaptation projects from materialising. Once these barriers have been identified, there are a variety of options to tackle or overcome them, leading to efficient market outcomes. This guides you on how public finance or policy can facilitate private financial flows towards adaptation.
Unit 6: Building a business case for adaptation
In the previous Units, we explore the broader context and regulatory frameworks surrounding adaptation/climate resilient projects. This Unit will narrow the focus, introducing the process of analysing new adaptation business model, or adjusting existing business models, to increase the climate resilience of their portfolio.
Part I will first introduce the rationale for a private actor to invest, building on Unit 4 and will then provide a deep-dive into understanding adaptation business models and the proposition behind them, what kind of business models we observe in adaptation/climate resilience, the investors and the type of financial instruments used.
Part II will provide an overview of the broad variety of adaptation business cases, analysing a selection of case studies on different adaptation/climate resilient projects to conduct an in-depth analysis of their characteristics. In this way, we will build a business case from the perspective of a project developer.
Unit 7: Investment opportunities from the perspective of private financiers
This Unit will provide an overview of what sources of financing are available to finance adaptation business models, building on those analysed in Unit 6. It will link to the overview of financing structures given in Unit 4 and build up knowledge on investment opportunities from the perspective of private financiers, answering the question: who invests in these (adaptation) business models and how?
Unit 8: Financing the business model – financial instruments
Following on from sources of finance, this Unit will focus on instruments available to private actors to invest in climate adaptation activities, including ‘innovative’ instruments and blended finance.
Unit 9: Climate resilience and risk metrics and indicators
This Unit explores climate risks and resilience metrics, looking at how to define metrics that are measurable, computable and comparable, which include both mean and variability, recent past, current trends, and projection of risks. Possible indicators to measure climate finance potential include financial and impact-driven ones. A very restricted focus on monetary indicators might not create the right incentives to support a mix of projects contributing to transformational change. This Unit will also explore the measurement and disclosure of climate risk as to the first step to developing strategies to address risk as part of all investment decisions.
Silvia Kreibiehl is Head of the Frankfurt School - UNEP Collaborating Centre for Climate & Sustainable Energy Finance (the Centre) at Frankfurt School of Finance & Management. In her role as Head of the Centre Ms. Kreibiehl has overall responsibility for all international Frankfurt Schoo...
Ulf Moslener is professor for sustainable energy finance at the faculty of Frankfurt School and Head of Research of the UNEP Collaborating Centre for Climate and Sustainable Energy Finance. His broader research interests are the economics of climate change, sustainable finance and climate financ...
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