An African finding ways to make sustainable development real in the 21st century. Advisor on sustainable finance and responsible investment for institutional investment via integration of environmental, social and corporate governance [ESG] factors. Research and advisory engagements range from trillion-dollar money managers assessing emerging markets to launching initiatives including the Africa S...
The State We're In
Welcome! This new JustMeans blog on Sustainable Finance and Responsible Investment will offer up some snippets and snapshots on the real world of putting other people's money to work. In covering sustainable finance and responsible investment, we'll cover the demand and supply sides, good and bad news, on how sustainable finance is evolving and what the future is in a post-financial meltdown world. And we'll cover it from developed countries and frontier markets perspectives.
Best current analysis reflects USD 6.9 trillion in 2007 was invested integrating environmental, social or corporate governance (ESG) factors. After decades and much increased publicity on sustainable finance or SRI (socially responsible investment), the industry I work in still makes up only a fraction of global investments, estimated at around USD 64 trillion at the end of 2006.
The niche is a small, yes, but we in Sustainable Finance intend to change that despite the grim times (I don't buy the "greenshoots" stories being floated on CNBC). Maybe that's what had me watching a classic film that seems about right for the state we're in.
Glengary Glen Ross is grim but compelling viewing with its rainy scenes, the blue and black colours, the mood music of saxophone and bass. In about 100 minutes of tight dialogue and superb acting by at least six legendary actors it reflects some of the underlying tensions of money, persuasion and ethics.
It's not pretty. Some of the same tensions that have been on ugly display as we pick through the financial markets wreckage since Lehman Brother's collapse last October. Ugly, kind of like listening to Alex Baldwin's brutal "ABC always be closing" speech (a speech which some firms and and MBA programs still use for training).
Sustainability in investment in strategies ("sustainable finance") has clearly grown as a global trend. Yes, like any good investment chart, the trend line is up and to the right. There are even ESG indexes in Brazil, South Africa, India and forthcoming in Egypt in 2009. But the asset management industry over the past months has been a bleak place to be. Like the setting for Glengarry Glen Ross, an arbitrary New York low-rise office block on a rainy night. The past 9 months when sending emails to colleagues in Melbourne, Sao Paolo, Stockholm, Johannesburg, Boston or London, we have adopted a pragmatic check-back method: for every email sent out, maybe 1-in-4 would bounce back indicating a colleague was fired, downsized and/or the business unit was cut off by panicked bank executives.
Investment banks have cut ESG sell-side analysts in London and Zurich. Fund managers have closed in Boston. Marketers in Sydney and Paris are staring at bleak fund-raising targets. Even USD 50m seems too much to raise in 2009, as a leading French sustainability money manager explained this week in Amsterdam.
As film director James Foley suggests, a classic film seems to come together at the right time, it has a sense of place that resonates. Little did Foley know that the film he made 5 years after the Black Monday stock exchange collapse in October 1987 would still be haunting us 17 years later. Watching the 1992 movie in 2009 long months into the financial meltdown and knock-on recession reflects the state we're in. I can even hear Baldwin's character leaning over the desk and rasping, "you laughing now?"
We look forward to your comments and counterpoints. Keep coming back. Remember your ABC - Always Be Coming (back)! So you tell me - is it Baldwin, Pacino or Spacey who nails the most memorable speech?