A Journey to Sustainable Finance

I might be the only ecologist on Wall Street, but I don’t mind.

It’s exactly where I want to be: after a winding journey through field research, advocacy, and legal work, I believe changing the financial system may be the most effective solution to climate change.

I’ve always felt a duty to devote my life and career to solutions to climate change: everything I value is exposed as terribly fragile by this unprecedented threat. What good is a well-funded retirement in a world of extreme inequality and climate disaster? After searching for solutions from personal action to ecology, I now believe the answer is to change the paradigm of the investment community, so that it supports its own sustainability by combating climate change.

I began my odyssey trying to lead by example: I became a vegan, bought second-hand clothes and furniture, eschewed a car. I fielded the questions about protein sources and almonds, but I had to acknowledge that individual changes are not the answer to systemic problems.

I became an ecologist, studying how Lyme disease affects its hosts. This disease threatens us because of environmental degradation and loss of biodiversity in our own backyards. I wanted to show that conservation is not about preserving charismatic megafauna and exotic nature preserves for privileged vacationers. I was quickly frustrated, however—there was already plenty of data. More alarming statistics won’t change anyone’s mind.

So, I went to Argentina, working to equip communities with the tools they needed to advocate for themselves by using UN human rights principles to curtail encroachments by hydraulic fracturing companies. Yet, though meaningful, knowledge of international frameworks and unenforceable constitutional provisions wasn’t getting to the root of the problem either. To work on enforcement, I joined a public interest environmental law group where I helped take on ExxonMobil. After a grueling appellate battle, we won the largest ever award in a Clean Air Act citizen suit. The penalty, however, was less than $20 million.

I was forced to realize I was thinking too narrowly. To take on the enormity of climate change, our economic systems had to be changed more dramatically than I had imagined. A $20 million fine doesn’t alter Exxon’s single-minded focus on short-term profits. How could we fix the system that encouraged this folly? Go to the source: Exxon’s practices, while harming most people, are ostensibly for the benefit of their shareholders. As the most recent report from the Intergovernmental Panel on Climate Change starkly states, continued fossil fuel use isn’t compatible with a healthy and prosperous world. Yet many still accept the idea that making immediate financial returns for shareholders trumps even creating a safe future for those shareholder’s children and for future businesses.

At Domini Impact Investments, I have had the chance to confront that foundational dogma of modern finance. When I joined the firm, they were attempting to understand and confront the macro risks that threatened our portfolios, from inequality to climate change. Entranced by the potential of this big-picture thinking, which proposed using systems-thinking tools to act on the root causes of macro risks, I jumped at the chance to work on the initiative and learn from the visionary Steve Lydenberg.

We found that macro risks stemmed from investors’ failure to support the economic, social, and environmental systems that underlie the value in their portfolios. This mindset must fundamentally shift for a sustainable future for investors and the world. With Steve’s Socratic prompting, I lead our efforts to shift this paradigm of finance, making the case for supporting the environment and social systems to some of the world’s largest companies and investors. For example, when some companies in a portfolio cause deforestation, other firms may lose water resources or other crucial ecosystem services. If deforestation proceeds far enough, it could accelerate climate change, harming the global economy. Investors should halt forest loss to ensure their own viability.

This thinking is challenging, yet many investors I speak with are realizing that a focus on quarterly profits and narrowly defined shareholder value won’t be adequate to provide returns to our clients in a warming, economically unequal world. They see the opportunity to be stewards of value for our beneficiaries in a much more profound way. But these investors are still waiting for the leadership to guide that daunting leap.

This leadership gap is a huge opportunity for our generation. We have the chance to overturn old doctrines and build a new system that can create prosperity linked with ecological sustainability and human dignity. It may involve defining wealth in new ways and other fraught questions. But this questioning and reinvention must occur if we want a cool and peaceful future and I’m grateful to Domini Impact Investments and Steve for giving me the opportunity to contribute to this transition.

 

Article by Suzanna Buck, Senior Impact Investment Associate, Domini Impact Investments. Suzanna leads Domini’s efforts to incorporate a systemic approach into its operations to better identify and mitigate the root causes of today’s interconnected challenges. Previously, she worked in environmental law in Boston, Chicago, and Buenos Aires. In 2019, Suzanna was named to the inaugural SRI Conference “30 Under 30” list. She has a degree in Ecology and Evolutionary Biology from Columbia University in the City of New York.