HEC Paris x Rothschild & Co. Impact Finance-Investment Banking Academy: ESG applied to the banking sector

The Rothschild & Co Impact Finance - Investment Banking Academy enables M1 Master students on the Grande Ecole program to discover the concrete application of social, environmental and governance (ESG) issues in finance. The first edition of this new finance elective took place in January 2023, and forms the teaching pillar of the "Data and Impact Investment" chair formalized on April 20, 2023 between HEC Paris and Rothschild & Co.

^{Auteur/Author of this article: Frédéric Voirin}

From January 2 to 20, 2023, 30 French and international Master In Management HEC students (Grande Ecole program) took part in a new academy on corporate finance: Rothschild & Co Impact Finance - Investment Banking Academy.

True to the pedagogical model of the academies, which enable students to explore a variety of fields in addition to their studies, this Impact Finance academy alternates between theoretical courses and practical workshops. Directed by Ferdinand Petra, Associate Professor of Finance at HEC Paris, the academy was designed in conjunction with Rothschild & Co's Global Advisory unit.

Corporate finance and ESG: from theory to practice

This academy is a unique experience because it combines several key components of impact finance: an intense immersion within one of the world's leading independent financial services groups, practical case simulations focusing on social and environmental issues, and expert advice from professionals and HEC alumni seasoned in the various financial markets.

Ferdinand Petra, Associate Professor of Finance at HEC Paris, tells us about the specifics of this particular elective: "This academy is a long-term project: it takes place every Friday at Rothschild, and on the last day it's the simulation of M&A transactions (merger and acquisition) from 9.30am to 1pm, which highlights what they've learned in a very concrete way. In my courses, I don't deal directly with ESG issues, so it's really a case of putting theory into practice. There's a beautiful synergy between the academic approach of "classic" finance and the practical input of practitioners on social and environmental issues".

"50% of the students of this elective course discover the finance sector"

Parity in finance is possible!  

This academy is very intense: for 3 weeks, students work almost daily on these subjects. It is also highly professionalizing, as students are immersed in pools that are highly diverse in terms of gender, ethnic origins and backgrounds, but also in terms of initial knowledge of finance: "50% of students discover corporate finance with this elective. This year, we're particularly proud to have 30 male and female students from a wide range of backgrounds (preparatory courses, double degrees, admitted on the basis of qualifications), but also and above all absolute parity (50% women, 50% men)! This is unique for an elective in finance," says Ferdinand Petra, Professor of Finance at HEC Paris.

"We're very proud to have perfect parity this year in this finance elective"

Combining financial performance with environmental and social impact

"Students spend 30% of their time at Rothschild & Co's premises, with role-playing, lectures and very concrete formal and informal exchanges on the investment banking profession", explains Ferdinand Petra.

During the Academy, students learn that these professions are very demanding. The first 3 years require even more analytical rigour, the ability to work in a team under pressure and long working days. The Academy also enables them to understand ESG issues through environmental, social and governance (ESG) criteria, which generally constitute the three pillars of extra-financial analysis of socially responsible management.

ESG criteria can be used to assess a company's responsibility towards the environment and its stakeholders (employees, partners, subcontractors and customers). As part of a sustainable development and responsible investment strategy, it is therefore essential to link a company's financial performance to its environmental and social impact.

"Students learn during this Academy that these professions are very demanding, and even more during the first 3 years."

The "Rothschild & Co Impact Finance - Investment Banking" academy enables students to understand how investors, shareholders, lenders, boards of directors and private and listed companies and to try to integrate social and environmental issues into their financial projections.

"Banking can be fun”

To round off the final day of the academy at Rothschild & Co headquarters, the students had the opportunity to have a privileged exchange with François Pérol, Managing Partner and Co-Chairman of Rothschild & Co's Executive Committee. After a friendly introduction in which he told them about his intense family life and career development, the students were free to ask him questions about his vision of investment banking and the challenges of ESG in the world of business and finance. By way of inspiration, François Pérol also gave them his sound advice on pursuing a career in banking, as well as feedback on his past political life.

Among other things, François Pérol reminded the students that "banking can be fun", explaining that his approach to business is not devoid of empathy and humanity. In terms of ESG, he also explained to the students that Rothschild & Co.'s environmental strategy was focused on the ecological transition (halting investments in coal, focusing on influencing and reducing the carbon footprint of its partners).

"Banking can be fun: the business world can also be full of empathy and humanity".

This academy, which presents concrete, professional situations and advice from the ESG, is part of a strategic merger between Rothschild & Co and HEC Paris, which was completed at the end of 2022. This merger has also given rise to the new HEC Paris & Rothschild & Co. "Data & Impact Investment" Chair, led by the two associate professors of finance Jessica Jeffers and Ferdinand Petra for a 3-year period.

Find out more about the HEC Paris x Rothschild & Co. "Data & Impact Investment" Chair