Sustainable investing is not one thing. It has many forms. But if it is going to make sense and to achieve what is intended, sustainability needs to be part of the core asset management business. A key element to making that happen, is to systematically incorporate wider societal issues, including physical, social and regulatory global megatrends that will affect companies’ future performance, in the investment process. This is not easily done, because traditional financial analysis does not, or to very little extent, take wider issues into account. One also has to bear in mind that there are different styles of investing and different asset classes, which will require different forms of sustainability lens.
Asset owners, in particular institutional investors and Sovereign Wealth Funds, are under increasing pressure to secure financial returns and to demonstrate that long-term factors are integrated into the investment process in a credible and systematic manner. In parallel, there is an increasing expectation of transparency and reporting. Adding the recent legal initiatives redefining good stewardship for institutional investors, there is a powerful mix of factors that will affect the way these investors do asset management and it will affect which companies they look to invest in.
Borg Consulting has a unique knowledge to advise long-term oriented asset owners, their asset managers and the companies they invest in, in this transition.