Islamic Corporate Finance and Financial Engineering

Integrating environmental, social and governance (ESG) factors into analysis of listed equity investments is the most widespread responsible investment
practice in the market today. Several drivers, including capital flowing into funds that integrate ESG factors and the growing awareness of academic research
supporting the benefits, are encouraging more and more investors to practice ESG integration (PRI, 2020). This requires developing analytical tools that
include ESG integration within fundamental equity valuation by modeling impacts on companies’ cash flows and cost of capital.
The assignment should clearly discuss the following key points, taking into consideration the concepts discussed in class (I will attach the names of topics
taken in class):
How ESG factors can be integrated in equity valuation and the key considerations from an Islamic finance perspective
Current practices of ESG integration in equity valuation
Your overall assessment of ESG integration in equity valuation and the challenges for the Islamic financial industry
Assignment guidelines:
The assignment should follow the style in academic journals and books, with clear elements such as: background, aim, method, discussion, conclusion and
full references.
Tables and figures should be numbered and referenced to in the text.
When you state something, it must be backed up by literature reference, or logical arguments. (use Harvard reference system).