Reflections from a Field Builder: The Next 25 Years of Sustainable, Responsible and Impact Investing
This article was originally published in GreenMoney Journal (September/October 2017) as part of its 25th anniversary celebration series.
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While offering the standard disclaimer that past performance is no guarantee of the future, I nevertheless offer some predictions for, and reflections about, the future of sustainable and impact investing.
The field has grown from $639 billion in assets in 1995 to $8.72 trillion in 2016. It will be very surprising if the next decade does not bring continued expansion in assets and in the types of investors who control those assets, as well as further growth in the products and services available.
High net worth individuals, on their own or as part of a family office or foundation, will increasingly drive their assets into this space. Foundations, historically slow movers in changing their investment process, will feel increasing pressure from the leadership shown by many smaller foundations and several large ones in connecting their mission to their endowments. Pension funds, including private sector funds that might be motivated by recent ERISA changes, will take their time, but more will offer sustainable investment options, especially if plan participants demand this.
Retail investors may be the next big movers in sustainable investment if the market can continue to bring interesting investment options to them in public equities, fixed income, and local and community investment options. Of late, every month seems to bring a new robo-advisor that either focuses on SRI or has created an SRI platform. These robo platforms will put pressure on advisors and advisor platforms to be informed on sustainable investment. Courses like our Fundamentals of Sustainable and Impact Investment are ways for advisors and other professionals to quickly gain familiarity.
We’ll also continue to see more service providers come to market with SRI products, ratings and platforms. Ultimately, investors will benefit from the greater depth and breadth of available products along with greater visibility into the underlying holdings in their portfolios.
To read the full blog, click here.
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While offering the standard disclaimer that past performance is no guarantee of the future, I nevertheless offer some predictions for, and reflections about, the future of sustainable and impact investing.
High net worth individuals, on their own or as part of a family office or foundation, will increasingly drive their assets into this space. Foundations, historically slow movers in changing their investment process, will feel increasing pressure from the leadership shown by many smaller foundations and several large ones in connecting their mission to their endowments. Pension funds, including private sector funds that might be motivated by recent ERISA changes, will take their time, but more will offer sustainable investment options, especially if plan participants demand this.
Retail investors may be the next big movers in sustainable investment if the market can continue to bring interesting investment options to them in public equities, fixed income, and local and community investment options. Of late, every month seems to bring a new robo-advisor that either focuses on SRI or has created an SRI platform. These robo platforms will put pressure on advisors and advisor platforms to be informed on sustainable investment. Courses like our Fundamentals of Sustainable and Impact Investment are ways for advisors and other professionals to quickly gain familiarity.
We’ll also continue to see more service providers come to market with SRI products, ratings and platforms. Ultimately, investors will benefit from the greater depth and breadth of available products along with greater visibility into the underlying holdings in their portfolios.
To read the full blog, click here.