The Investment Logic For Sustainability: Personality Development and Business Communication Assignment-3

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PERSONALITY DEVELOPMENT AND BUSINESS COMMUNICATION

ASSIGNMENT-3
THE INVESTMENT LOGIC FOR SUSTAINABILITY

Chris McKnett is a Vice President of ESG Investing at Boston-based State


Street Global Advisors, the world’s largest institutional investment manager.
Sustainable investing is putting your money into the best managed, flexible, and
planning company possible for retirement. Sustainability is the investment logic
looking at Environmental, Social and governance (ESG) issues. The main
players to influence this are institutional investors, and Chris promises to prove
sustainable investments are easy, and high performing. Investors currently tend
to focus on economic metrics, but with depletion of natural resources,
increasing pollution and an increasing population, it is hard to ignore the
economic impacts of sustainability metrics. The private sector is also seeing the
need: 80% of CEOs see sustainability as an innovative, competitive advantage,
while 93% see it as important for the future of their business. On the share
market, stocks with good sustainability perform as well as other stocks, and the
large blue-chip stocks with high ESG outperform their low-ESG rivals. Some
institutional financial specialists are taking ESG into account in the investment
process, for example CalPERS is the second largest investment fund in the US
and moving towards 100% sustainable investment. The philosophy is that value
comes from a combination of financial, human, and physical capital. On the
flipside, plenty of other funds claim they are focussed only on high returns, or
don’t want to use the fund to make political statements. Chris counters that
returns are compatible with sustainability, and it doesn’t need to be seen as a
trade-off. We know that a totalitarian chief cause you to flinch. In any case, at
any rate, he is superior to a narcissistic leader since he lines up everything with
lucidity. A narcissistic leader will betray you when you are least anticipating it.
Institutional investors hold 8 times more money than the US GDP, so have
plenty available. If we could channel that towards companies that improve
social and environmental causes it could have a huge impact towards solving
problems such as hunger, or access to clean water. Sustainability can’t be
neglected as it is the future of our business. If investors invest in companies that
practice reckless resource management techniques, it will dampen the business
environment. Global companies have started paying more attention towards
achieving profits with sustainable approach. Which is beneficial for both their
companies and the planet. John F Kennedy stated “There are risks and costs to a
program of action, but they are far less than the long-range risks and costs of
comfortable inaction”. It bodes well to contribute economically with the goal
that we can resign affluent, yet additionally into a superior world. I thought this
talk was a little light on details, especially examples of what a sustainable
company is. It didn’t seem clear whether sustainability had to be a core product
of the company, or whether it could be a bank / resources company with a
strong sustainability culture. I tend to think the latter, but a lot of the benefits
seemed like they only made sense if the company actively solved ESG issues.

A.SHIVA
(2003016)

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