From Negative to Positive, Record Interest seen in Sustainable Investing in 2024

Sustainable Investing: Revolutions in Theory and Practice and our next book

As Morgan Stanley's Matthew Slovik reported Tuesday March 12, 2024 on record levels of interest in retail investors in sustainability running diametrically against what you most often hear in the media, we look back today on Sophie Purdom and my 2016 book on Sustainable Investing, subtitled Revolutions in Theory and Practice.

Back then in 2016, interest was really first becoming serious, with Wall Street firms hiring and building global teams, often for the first time, and the field arguably becoming serious for the first time.

Excitingly, 77% of individual investors today are interested in sustainable investing, and an even higher percentage (over 80%!) here in the US - indeed, Sustainable Investing is on the rise Morgan Stanley report on sustainable investing in 2024

Why is this important?

Because increased demand for sustainable investing leads to a long sought and meaningful supply/demand dynamic, towards an eventual majority, and we approach such levels at last.

Reaching a majority wanting sustainability to be a primary consideration, through increased intentionality of investing, is the next plateau we are now making meaningful inroads towards and this helps explain the frantic and largely ineffective anti-ESG efforts to stop this trend.

This is also why we push back on otherwise understandable critiques of weak academic papers on the financial impact of sustainable investing, as such arguments only help slow the necessary momentum towards this increased intentionality dynamic and its potential positive impact.

Our book back in 2016 called for maximizing a parallel focus on sustainabillity and financial outcomes and this is the battle we are finally starting to win, across asset classes and regions. This is how we can measure success in other parts of the developing world as a bellweather of sorts as well.

We showed back then, and continue to show through our class portfolios, that a dual focus on sustainability and financial outcomes is the win-win scenario that can lead to meaningful progress and success. We did this first at Brown University in 2016 and continue at NYU Stern School of Business as we speak. Our Brown portfolio in 2016 went on to dramatically outperform for years, and our NYU portfolio from last year also significantly outperformed versus benchmarks. Our frequently cited Illuminem piece from last year also clarified how fund managers are recognizing the importance of investing actively and using this dual sustainability/financial lens for best success in gaining assets to manage and providing outsized returns to clients versus passive approaches which do less well, or active strategies which don’t focus on sustainability.

Looking across asset classes, Sophie Purdom and Kimberly Zou's work on Sightline Climate (CTVC) remains critical, and another of our theories of change, bring such people together to drive change everywhere, who share this dual paradigm focus across asset class and globally across all regions as well, and private equity is a space to watch closely in this regard as well. Our book called for such changes in strategy, culture and focus, and such progress remains essential.

We also brought in our Principles for Responsible Investment work with asset owners, who continue to develop Climate Action Plans, which we advised on publicly for NYS Common, and continue to work through - here too is where win-win scenarios are most effective.

More on an update to this book soon, as it is time to do an 8th book, one that summarizes and updates our thinking, and clarifies what it is we need to do differently going forward.

It is time at last for sustainability within investing to become the defacto standard, no more us and them, or sustainable investing as "other" - as Steve Viederman said, and am so glad we captured his thinking in our earlier books, there is no sustainable investing, there is only investing.

How will we invest more generally going forward? How can investing truly have meaningful impact? Are you involved and contributing towards what’s necessary yourself? Ask your financial advisor, get to understand the impact of your investments, make sure you aren’t being sold a bill of goods, and don’t allow financial professionals to leave you stuck with losers at a time when positive change is happening at last.

This is a movement, it is and always has been, and it is the only way.