Tuesday, March 4, 2014

Chris McKnett: The investment logic for sustainability | Talk Video | TED

Chris McKnett: The investment logic for sustainability | Talk Video | TED:

Chris McKnett gives a wonderful talk on investing and the idea that all investors should start looking at ESG (economic, social and governance). The economic is obvious, profits. Social is the impact to people in general, and governance is corporate social responsibility (CSR).

Generally the research shows that there is no downside to being socially (and environmentally) sustainable. But in the long term, some of these companies that are irresponsible can be expected to lag behind.

Chris implies that as an investor it could be (?is?) irresponsible to invest in companies that are and continue to be non-sustainable. The point is that the downside risk is dramatically increased for non-sustainable companies and those that don't aggressively plan related to their non-sustainable ways.

Maybe an example would be having a lumber-based business where you are chopping down the trees. A sustainable plan would be to replant at the rate of usage. At a minimum, you should find another country with too many trees, so you can get past the inevitable lumber crunch on the horizon...

One of the beauties of this talk is that it focuses on just the financials of the sustainability issue. If big institutional investors started seriously considering the sustainability of their investors, then it would become front and center to all investments everywhere.

The problem with non-sustainable business practices is that they always, always, have negative externalities associated with them. And we all bear the costs of their negligence.

'via Blog this'

No comments:

Post a Comment