September/October 2017

When SRI industry leaders look at the future of sustainable investing, our tendency is to pat ourselves on the back for the tremendous progress we have made and make optimistic predictions about the wonderful progress that still lies ahead. While not wanting to be the skunk at the garden party, and while remaining a die-hard optimist when it comes to possibilities, I am more pessimistic about probabilities if we remain on our current course. We need to up our game and here is how.

The SRI field has grown rapidly to nearly $9 trillion and the next decade will bring continued expansion in assets and in the types of investors who control those assets, as well as further growth in the products and services available. From high net worth individuals to retail investors to new robo-advisor platforms all will increasingly bring their assets into SRI. Foundations of all sizes will be changing their investment process to better connect their mission to their endowments and Pension funds, including private sector funds will offer sustainable investment options.

I believe that companies will continue to benefit economically by pursuing excellence in corporate responsibility, especially in the context of climate change and increased resource scarcity. As responsible investing integrates into the mainstream, ESG data will be incorporated into greater numbers and types of investment strategies. Investment firms that can successfully identify companies with leading ESG profiles, strong financials and attractive fundamentals will be the most likely to succeed. Also leadership in the responsible investment industry will require meaningful engagement with portfolio companies on ESG issues.