Advanced RI Analysis
Advanced Responsible Investment Analysis is the first advanced course to be released by the PRI Academy. The course explores and examines the use of sustainability data in fundamental investment analysis and stock valuation. The course takes six to eight hours to complete, working through a series of topics that help to identify the critical ESG issues relevant to sustainability performance, key value drivers, and overall financial outcomes.
Advanced Responsible Investment Analysis
Advanced Responsible Investment Analysis is the first advanced course to be released by the PRI Academy. The course explores and examines the use of sustainability data in fundamental investment analysis and stock valuation. In order to do so, the course works through a series of topics that help to identify the critical ESG issues relevant to sustainability performance, key value drivers, and overall financial outcomes.
The course aims to provide candidates with a detailed understanding of the place of sustainability in finance, and the role of ESG factors in financial decision making. Targeted at investment professionals, the course aims to build the skills necessary to identify new value drivers in financial analysis, and apply practical tools to modelling and stock valuation.
Certification
After successful completion of the course, the user will be awarded a certificate of completion.
Learning outcomes
By the end of this course you will be able to:- Identify ESG factors that will affect financial performance
- Understand how to assess the materiality of ESG factors
- Apply ESG factors in financial models
- Evaluate how a company's fair value is impacted when adjusted to ESG performance
- Recognise global sustainability standards and regulations, and understand their impact on business.
Course outline
INTRODUCTION
- Understand ESG information uses
- Identify the role of intangible value drivers in investment decision making
THE CASE STUDY
- Define integrated analysis
- Identify the relationship between ESG data and materiality
- Understand the basic concepts needed to identify factors most material financial value
STEP 1: IDENTIFY
- Identify ESG factors in traditional sector analysis
- Outline key environmental, social and business indicators that can impact financial value
- Identify global trends and regulations and their impact on financial analysis
- Map ESG factors in to hypothetical case studies
- Measure the extent to which ESG issues will impact key financial metrics
STEP 2: ASSESS AND ANALYSE
- Assess the degree to which ESG factors affect industry and company performance
- Identify the guiding principles for assessing ESG issues
- Assess ESG issues using risk mapping methodologies
- Evaluate revenue, profit margins and operations using ESG data
- Assess and rank companies according to key ESG factors
STEP 3: MODEL AND INTEGRATE
- Understand the guiding principles of ESG integration
- Examine a DCF model with an ESG overlay
- Identify the entry points for ESG analysis in an EP model
- Rank and score company performance
- Recognise varying options of ESG analysis and integration
SOURCING ESG INFORMATION
- Identify the range of ESG data available
- Understand how to use multiple forms of ESG data
- Recognise the challenges faced in collecting ESG data
- Identify global initiatives, regulations and tools that support ESG integration
- Understand the role of reporting
USING ESG INFORMATION
- Identify the many uses for sustainability data
- The role of ESG data in direct financial modelling
KEY PRINCIPLES
- Recognise and apply the key principles of ESG analysis
I have started the course having a sustainability background and the course has helped me to relate the ESG world with the financial sector. Now I am able to collaborate more effectively with the financial analysts for demonstrating ESG factors in value creation.
The course was a great way to live a day in the life of a buy side analyst. It allowed for a greater understanding of how and why the ESG offerings are becoming more robust and more important. The work that we are doing at ISS continues to reflect the ever-changing...
landscape of ESG work. ISS is uniquely positioned in that we have best-in-class offerings covering ESG, shareholder engagement, financial performance (EVA), and climate. This course really was a great way to bring to life the use cases and applications of ESG in the investment process.
If you are an investment manager and would like to enhance your understanding regarding ESG valuation the Advanced RI Analysis course is a good tool to help with that.