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This lecture introduces challenge-based learning (CBL) as a student-centered approach focusing on real-life, open-ended challenges with external stakeholders seeking solutions. It covers the design principles of CBL, learning outcomes, and examples of projects addressing sustainability, ethics, and data science. The instructor discusses the importance of uncertainty, constraints, real impact, coaching, and the development process. Various challenges are presented, such as sustainable simulations, teaching sustainability methods, ethics in data science, and integrating ethics in engineering design. Students are encouraged to work on projects that enhance their educational concepts, engineering design skills, teamwork, and leadership abilities.