In this episode of Sustainability Talks, ETF Partners' Zoë VanderWolk sits down with Pavan Sukhdev, CEO and founder of GIST Impact, to unpack one of the most pressing topics in sustainable finance today: the evolution—and the future—of ESG ratings.
Pavan is a globally respected voice in sustainability and environmental economics, known for leading the UN’s “Green Economy Initiative” and the landmark TEEB study (The Economics of Ecosystems and Biodiversity). As the founder of GIST Impact, he works at the cutting edge of impact measurement, helping companies and investors understand their holistic value—and the externalities that traditional ESG frameworks often overlook.
Key Themes from the Episode:
Why ESG ratings alone are not enough—and how they’ve become “a pig’s breakfast” of inconsistent metrics
The need for clearer frameworks to evaluate direct and indirect corporate impacts
How to bridge the gap between NGO perspectives and business realities
The role of technology in both creating and solving sustainability challenges
Why today’s externalities are tomorrow’s risks—and how investors can use this insight to drive positive change
"Be approximately right rather than precisely wrong." — Pavan Sukhdev
The conversation follows Pavan’s journey from scientist to banker to sustainability advocate—a path shaped by personal revelations (including fatherhood) and a growing recognition of nature’s invisible economics. His recent TED Talk, “The Birth, Life, Death and Afterlife of ESG Ratings,” sets the stage for a candid, thought-provoking discussion on how we must evolve beyond box-ticking toward true impact investing.
Memorable Quotes:
"Why would I not want to know these things?"
"If you want to be sustainable, be positive impact."
"Today's externalities are tomorrow's risks."
About Pavan Sukhdev
Pavan Sukhdev is the CEO and founder of GIST Impact, a company established in 2008 with the vision of creating a sustainable tomorrow – a world where humans live in harmony with nature and enjoy the benefits of a green and equitable economy of permanence. As the CEO of GIST Impact, Pavan collaborates with corporations and investors, leveraging impact economics and technology to measure a business' holistic value contribution to the world.
Pavan's remarkable journey has taken him from scientist to international banker to environmental economist, bringing him to the forefront of the sustainability movement. His extensive work in sustainability and the invisible economics of nature led to his appointment as head of the United Nations' "Green Economy Initiative" and leader of the G8+5 study, "The Economics of Ecosystems and Biodiversity" (TEEB).
In his recent TED Talk, "The Birth, Life, Death and Afterlife of ESG Ratings," Pavan walks us through the evolution, challenges, and shortcomings of ESG (Environmental, Social, and Governance) ratings. He envisions an 'afterlife' for ESG ratings, where externalities – a company's indirect impacts or side effects on the environment and society – are accounted for, where we as a society are able to grasp the full picture of corporate impacts, and to use this information to better our decision making and ultimately, sustain our future.