Sustainability matters for all investors, both private and institutional. In the wake of the COVID-19 pandemic and the impending climate crisis, the interdependence of capital markets, economies, environmental impacts, and social impacts is clearer than ever.
In 2019, sustainable investment by institutional investors was USD 30,7 trillion in assets under management in Europe, the United States, Japan, Canada, Australia, and New Zealand (GSIA, 2019). This is a 34% increase since 2016 and a 68% increase since 2014 (GSIA, 2017), indicating that sustainable investment is becoming mainstream.
This trend can also be seen in the private investment space. Many individuals are moving beyond the question of why they should invest sustainably and are now focused on how to best incorporate sustainability considerations into their investments in ways that support their overall objectives and values.
However, this is path is not as clear and straightforward. There are many questions that pop up in a private investor’s mind. How and where to start? Is sustainable investing the same as ethical investing? What is Environmental, social, and governance (ESG) investing? Do I have to forgo profits when investing sustainably? What are the information sources? How much time do I need to put in? How does sustainable investing differ in stocks V/s fund?
To answer all these tricky yet tangible questions, Hanna Silvola, Associate Professor in Accounting at Hanken invites Tiina Landau, a Sustainability and ESG expert who currently works at Neste and has previously worked at one of the biggest pension funds in Finland, Ilmarinen. They have also together written a book in Finnish on sustainable investment titled ‘Vastuullisuudesta ylituottoa sijoituksiin’. This book will be soon released in English with the title ‘Sustainable Investing: Beating the market with ESG’