MS in Climate Finance

Lisa Sachs, Associate Professor of Professional Practice; Director, Columbia Center on Sustainable Investment; Director, MS in Climate Finance
 

Curriculum

The MS in Climate Finance’s integrated curriculum enables students to: 

• Understand the science of climate change and its varying economic, social, and environmental impacts. 
• Translate the implications of climate research into appropriate financial and business language and decision-making.
• Assess risks and opportunities associated with climate change.
• Evaluate the financial tools and strategies that can be applied to accelerate the energy transition and to finance critical investments in mitigation and adaptation.
• Understand investor strategies for financing climate solutions in the context of a carbon-constrained global economy, emerging technologies, and national and international policy developments.

Core Courses

Climate Change Mitigation focuses on tools and strategies to address climate change and provides a broad survey of technologies, policies, and market structures that can mitigate greenhouse gas emissions. Through scenario planning, students will explore decarbonization pathways across economies, considering both technical and behavioral changes necessary for net-zero transitions. Case studies from low-, middle-, and high-income countries will illustrate the complexities of climate mitigation, including risks and opportunities. The course's interdisciplinary nature blends STEM and social sciences to focus on the practical application of these tools in real-world scenarios and explores both the end goals of net zero and the transition needed to achieve them.

Climate Change Adaptation examines climate adaptation policy through an interdisciplinary lens, focusing on how international development and disaster risk management contribute to resilience in the face of climate change. Students will explore global inequities and how these shape vulnerability to climate risks. By analyzing case studies, students will gain insight into effective governance strategies for climate adaptation. The course emphasizes active participation and the practical application of key concepts, equipping students with the analytical tools needed to assess climate resilience and sustainable development efforts globally.

Dynamics of Climate Variability and Change provides an in-depth study of how climate science links to societal impacts, with a focus on understanding the physical mechanisms that govern the climate system. Students will learn to interpret climate forecasts, understand the uncertainties involved, and critically assess the suitability of different types of climate information for societal questions. The course also emphasizes the importance of communication, teaching students to clearly articulate climate-related issues to a variety of audiences. By the end of the course, students will be able to engage fluently in discussions about climate variability, change, and their societal implications.

Foundations of Valuation is designed to cover those areas of finance that are important to all managers, whether they specialize in finance or not. At the end of the course, you will be familiar with the most common financial instruments (stocks, bonds, options) and the methods to value them. More specifically, we will cover the following topics: 1. General framework for valuation (present value formula) 2. Bond and bond valuation (spot rates, yield to maturity, duration, convexity) 3. Stocks (stock valuation, dividend growth model) 4. Basic concepts of risk and return and the CAPM 5. Options (Black-Scholes formula). The course will be a mix of lectures and cases. Students are expected to come prepared to class since the course relies on several in-class exercises students will solve in excel.

Corporate Finance is designed to cover those areas of finance that are important to all managers, whether they specialize in finance or not. At the end of the course, students will be able to value a firm. To reach this goal, the course covers the following topics: 1. Introduction to frameworks for firm valuation (enterprise DCF and multiples) 2. Multiple valuations 3. Free cash flows (definition, projections) 4. Residual value 5. Weighted average cost of capital 6. Optimal capital structure The course will consist of approximately one‐half lecture and one‐half in‐class case discussions, for which students should prepare carefully. The course aims to provide students with an understanding of sound theoretical principles of finance and the practical environment in which financial decisions are made.

Capital Markets & Investments has three principal goals: To introduce the principles of asset valuation from an applied perspective. The majority of the class is concerned with the valuation of financial securities. The valuation issues are heavily used in portfolio management and risk management applications. To introduce the following concepts: Arbitrage. The term structure of interest rates. Portfolio theory, risk-control, and diversification. Equilibrium asset pricing models; the CAPM. Efficient and inefficient markets. Performance evaluation. Analysis of common pooled investment vehicles and tax-aware investment strategies to provide sufficient background knowledge for students seeking an overview of capital markets and an introduction to advanced finance courses.

Climate Finance begins with an introduction to climate finance and the topic of carbon markets, introducing students to the risks and rewards of investing in emissions offsets. The next class focuses on project finance and the opportunities in renewable energy, with a discussion of the unique challenges and solutions to investing in clean energy projects in developing economies. The course then shifts to the financing of new climate technologies with venture capital and growth equity, followed by a class on strategies for investing in public companies, including divestment, activism, and ESG investing. The following class covers fixed income products, including securitization and structured products, and the impact of insurance markets on climate change. The course concludes with a class on the strategies used by banks and investment firms for managing financed emissions and the transition to net zero.

Climate Risk provides an in-depth exploration of the financial, economic, and strategic risks posed by climate change. The course examines how climate risk manifests through physical, policy, market, and technological channels, and why these risks are often underpriced in financial markets. Students will analyze the insurability of physical assets, assess financial stress testing frameworks, and explore corporate scenario planning strategies. The course also delves into the role of climate risk disclosures and their implications for businesses, investors, and policymakers. Finally, students will consider how climate risk presents not only challenges but also opportunities for firms that can effectively navigate uncertainty.

International Climate Finance explores the global financial mechanisms driving investment in and finance for climate mitigation, adaptation, and loss and damage. The course provides an overview of public and private financing sources, including specialized funds, regional development banks, sovereign wealth funds and other institutional pools of capital. The course investigates the disparities in capital flows between developed and developing economies, mitigation and adaptation, and other financing gaps and challenges. Throughout the course, emphasis is placed on the structural incentives and constraints within the global financial system and how they shape climate-related investment decisions.

Practical and Applied Experiences
Students gain practical skills and experience during the final semester by completing a culminating internship or capstone project.

Public and private climate finance doubled between 2020 and 2023, but exponentially more investment is needed to meet global emissions reduction goals and adaptation needs. There is an urgent need for trained professionals who can apply their climate knowledge to financial decision-making, ensuring that capital is invested quickly and effectively.

Graduates will become key decision-makers in public and private institutions, driving impactful solutions to the climate crisis through advanced financial tools and knowledge. Graduates can expect to find employment in financial institutions (public and private), businesses, consulting firms, intergovernmental organizations, ministries of finance, non-governmental organizations, and more.

Career Management

The Career Management Office supports Climate School students as they prepare for and obtain full-time professional opportunities. From enrollment to employment, staff are here to provide students with the following services and programming:

• Coaching
• Resume and cover letter review
• Mock interviews
• Alumni mentorship program
• Student-alumni networking events
• Employer info sessions
• An exclusive responsive job board

These resources contribute to the growth and development of each student. Career management staff are also continually forging strategic industry partnerships so that students are exposed to a broad range of opportunities in climate and finance.