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Should business and finance play larger roles in resolving the great social and environmental challenges of our time? Proponents of environmental, social, and governance (ESG) investing say yes. They argue that ESG financial strategies can help reverse runaway carbon emissions and fix income and gender inequalities, among other ills. ESG-integrated investments already encompass more than $120 trillion in financial assets. Are they working as promised? If not, how can they be improved?
In Sustainable, a finance-industry veteran offers an insider’s look at the promises, prospects, and perils of ESG investing. Terrence Keeley argues that many ESG advocates have been overly optimistic about what it can accomplish. Divestment threats are ineffective tools for altering corporate behavior, and verifiably “good” companies do not systematically generate great returns. Most importantly, business and finance cannot cure social ills on their own: regulators, public policies, civil society, and individuals must all play specific, complementary roles to shape the future we want. Keeley provides comprehensive solutions that would promote more inclusive, sustainable growth. In particular, he recommends reallocating capital from some indexed products toward an emerging class of strategies with more verifiable social and environmental benefits. Keeley identifies dozens of alternative “impact investing” strategies that could generate true double bottom lines. He also highlights promising civic organizations with proven methodologies for achieving widely shared benefits at scale.
Proposing practical, actionable, and in many cases profitable solutions to social and environmental problems, Sustainable offers an incisive vision of the roles business and finance can and should play in building a flourishing society.
Foreword
Introduction
Part 1: The Promise . . .
1. The Stakes
2. Stakeholders Versus Shareholders
3. Activists, Their Arguments—and a Little Engine That Could
4. C-Suite Insurrectionists
5. What if +1°C = −$100 trillion?
6. What’s the United Nations Got to Do with It?
7. Materiality
8. A Few Words About Indices
Part 2: The Perils . . .
9. Values Versus Valuations
10. Hardwiring Corporate Goodness
11. Inside the ESG Arms Race
12. Crowded Trades
13. Let’s Speak Privately
14. Fight or Flee?
Part 3: Solutions
15. Civics Lessons
16. Impact Investing at Scale
17. The 1.6 Percent “Solution”
Conclusion (or How to Avert Our Failed Future)
Acknowledgments
Appendix: Exemplars of Hope
Notes
Index
Description
Should business and finance play larger roles in resolving the great social and environmental challenges of our time? Proponents of environmental, social, and governance (ESG) investing say yes. They argue that ESG financial strategies can help reverse runaway carbon emissions and fix income and gender inequalities, among other ills. ESG-integrated investments already encompass more than $120 trillion in financial assets. Are they working as promised? If not, how can they be improved?
In Sustainable, a finance-industry veteran offers an insider’s look at the promises, prospects, and perils of ESG investing. Terrence Keeley argues that many ESG advocates have been overly optimistic about what it can accomplish. Divestment threats are ineffective tools for altering corporate behavior, and verifiably “good” companies do not systematically generate great returns. Most importantly, business and finance cannot cure social ills on their own: regulators, public policies, civil society, and individuals must all play specific, complementary roles to shape the future we want. Keeley provides comprehensive solutions that would promote more inclusive, sustainable growth. In particular, he recommends reallocating capital from some indexed products toward an emerging class of strategies with more verifiable social and environmental benefits. Keeley identifies dozens of alternative “impact investing” strategies that could generate true double bottom lines. He also highlights promising civic organizations with proven methodologies for achieving widely shared benefits at scale.
Proposing practical, actionable, and in many cases profitable solutions to social and environmental problems, Sustainable offers an incisive vision of the roles business and finance can and should play in building a flourishing society.
