Practical analysis for investment professionals
04 June 2013

Sustainability: An Investment Perspective

The notion of socially responsible investing (SRI) has been with us in some form for a very long time, but as a professional category of investing, it has faced challenges of definition, not least because social responsibility is to some degree a subjective term (as competing political parties are all too willing to demonstrate). Even when we agree on what the goals for SRI ought to be, the other challenge is finding an investment thesis that allows professional money managers to meet their fiduciary obligations and achieve returns sufficient enough to avoid losing clients.

These challenges may explain why the naming convention for this style of investing has migrated from SRI to “ESG investing,” the short name for “environmental, social, and governance” factors, and now, more often than not, “sustainable investing.”

A passionate talk titled “Sustainability: An Investment Perspective” at the 66th CFA Institute Conference in Singapore, delivered by Investment Solutions Chief Investment Officer Glenn K. Silverman, CFA, underscores the emotional appeal of sustainability, which can be broadly defined as “conditions under which humans and nature can exist in productive harmony,” as he put it.

Silverman opened his talk with the disclaimer that “I’ve not been what you’d typically call an environmentalist. I’m no tree hugger. I’m a serious investment guy looking to generate returns for my clients.”

Continue reading on the 66th CFA Institute Annual Conference blog

About the Author(s)
Charlie Henneman, CFA

Charlie Henneman, CFA, is head of educational events and programs at CFA Institute. Previously, he was the director of structuring and operations at Indosuez Capital, the CDO (collateralized debt obligation) management group of Credit Agricole Indosuez. Henneman previously held several positions in credit and structured finance, including managing director at advisory boutique AGS Financial, senior vice president and chief credit officer in the new products and ventures group at Enhance Financial Services Group, Inc., and director in the new assets group on Standard & Poor's structured finance ratings team. He holds a BA in political science from the University of Rochester and an MBA in finance from the New York University Stern School of Business.

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