I’m grateful to Jirka Helán from Deloitte Legal for an excellent LinkedIn post, “You don’t believe young Greta…”. In it, he talks about a documentary by the legendary David Attenborough entitled A Life on Our Planet. For those who haven’t seen it yet, I heartily recommend watching it on Netflix. The 94-year-old Sir David reminisces about all the beautiful and unique wilderness he had seen during his life, which we have in the meantime collectively destroyed. Through this personal example it confirms what most of the world knows, with the exception of some of Donald Trump’s voters: that humanity needs to act fast in the fight against global warming.
Sustainability is a key topic that has come to the fore in connection with the global Covid-19 pandemic. Formerly a marginal matter in the eyes of investors and business leaders, it is now taking centre stage. The Financial Times devoted nine articles to the topic in October alone. Suddenly, sustainability is being mentioned in various and sundry contexts in the annual reports of global corporations.
In September, Swiss bank UBS, which manages $ 2.6 trillion in assets for some of the wealthiest people in the world, was the first financial institution to announce that it will now recommend sustainable investments to its clients over traditional ones. In its press release, the bank declared that it believes that a 100 % sustainable portfolio is capable of bringing investors the same or greater income than a traditional portfolio, plus offers global clients the diversification they desire.
In October, the largest bank in the world, JPMorgan Chase, took it even a step further, and through worldwide media notified its clients, the largest global petroleum and gas companies, that it would no longer work with them unless they voluntarily comply with provisions of the Paris Agreement on reducing greenhouse gas emissions. Overall, the bank, as the largest global creditor of the petroleum and gas sector, is also moving away from fossil fuels.
A few days later, Blackrock, the largest global fund manager, publicly shamed the senior management of Procter & Gamble when at its general meeting it voted along with activists against the recommendations of the company’s board of directors, and successfully pushed through a resolution that requires P&G to take active steps to stop deforestation in the production of its paper products and diapers.
Ten years ago, when I was working in London, sustainable investment was a marginal affair, and the first portfolio managers who became involved in it were looked upon by everyone as interesting enthusiasts who might want to do good, but don’t want to make their clients money.
It’s evident that the times have changed radically. A new generation of customers is growing up, and consumer preferences as well as national and trans-national regulation are increasingly supportive of sustainability. And the profits and income of companies that take an interest in sustainability or have stipulated it as key for the production of their products and the provision of their services, are, of course, growing. And therefore also the income from investments into these companies. So one can’t be surprised that even the biggest cynics and skeptics among business leaders are now interested in “sustainability”, and that this time its 1:0 for sustainability vs. the traditional perspective.
