More than a slogan, sustainability is good long-term investing

March 3, 2020

BY Alexander Kalis

By Civil Society

Key physical, economic and social trends, often grouped under the heading of sustainability, are increasingly material to investment returns and risks across asset classes. The value of a portfolio will be sustained over many decades only if it is invested in assets or businesses that will be at least as relevant to society tomorrow as it is today. Climate change and the necessity of transition to a low-carbon economy are huge factors, but there are others too, as social changes and technology reshape the global economy. The opportunity today from investing in (and only in) those companies that will be on the right side of history is compelling, as change erodes value in many industries and recreates it elsewhere. We believe that the materiality of these trends means sustainable investing has moved beyond alignment with ethical considerations to become important to all investors. Today, there is a window of opportunity for investors to gain an advantage as current investment decision-making frameworks tend to be short-term focused and less inclusive of all the material data.

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