Can sustainable investing really save the world?
Amid the clamour for everything ESG today, some argue that modern finance has forgotten its sense of purpose. What do investors want? Is it really just better risk management or outperformance? Or is it more about having a meaningful positive impact?
Whatever it is, asset managers, advisers and investors all need to decide what it is that they want to achieve. As Yogi Berra once said, “If you don’t know where you’re going, you may wind up someplace else”. Sometimes it is helpful to pause and reflect on the path already trodden. Can we draw on past examples to recognise why some were successful and others were not? As Maya Angelou once said, “You can’t really know where you are going until you know where you have been”.
We think the investment community deserves more nuanced insights on sustainable investing. These insights must be grounded in factual reality and should help us to filter through the noise of ESG. This paper kicks-off our sustainable investing series – a collection of insights that delve into the detail of what’s really happening in ESG today, as well as exploring the structural elements that we think are set to evolve in the industry…
Climate catastrophe, racial injustice, species loss, economic inequality, the devastation of the oceans, continuing human rights abuses. These are just some of the huge challenges facing the world today. However, these challenges have all seemingly fallen under the banner of ESG – environmental, social and governance – investing.
So much so, in fact, that the accelerating demand for sustainable investments already seems like old news. Such has been the flow of industry reports and marketing of ‘everything ESG’ in the past 18 months, it’s easy to be overwhelmed with the surfeit of grandiose claims. We believe these claims should not go unchallenged.
And while we recognise the significance and urgency of the societal issues, we believe that tackling them in a meaningful way requires acknowledgement of the significance of the challenges, a clear diagnosis of the problems and identification of targeted solutions.
Indeed, we work in various international forums either through Natixis Investment Managers or through our affiliated investment firms. These include the UN Principles for Responsible Investment (PRI).
Speaking at the PRI in Person 2019 event in Paris, our CEO Jean Raby said: “Although I like to believe our industry can do a lot, governments and regulators have a key role to play alongside financial institutions and investors. Cooperation is certainly the most powerful tool to fight some of the most pressing issues, notably in the fight against climate change and inequalities of all kinds…
“PRI signatories, either as asset owners or as asset managers, manage or account for close to $90 trillion. Together, we have the power to make a difference through our investments.”
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