Should business and finance play larger roles in resolving the great
social and environmental challenges of our time? Proponents of
environmental, social, and governance (ESG) investing say yes. They
argue that ESG financial strategies can help reverse runaway carbon
emissions and fix income and gender inequalities, among other ills.
ESG-integrated investments already encompass more than $120 trillion in
financial assets. Are they working as promised? If not, how can they be
improved?
In Sustainable, a finance-industry veteran offers an insider's look at
the promises, prospects, and perils of ESG investing. Terrence Keeley
argues that many ESG advocates have been overly optimistic about what it
can accomplish. Divestment threats are ineffective tools for altering
corporate behavior, and verifiably "good" companies do not
systematically generate great returns. Most importantly, business and
finance cannot cure social ills on their own: regulators, public
policies, civil society, and individuals must all play specific,
complementary roles to shape the future we want. Keeley provides
comprehensive solutions that would promote more inclusive, sustainable
growth. In particular, he recommends reallocating capital from some
indexed products toward an emerging class of strategies with more
verifiable social and environmental benefits. Keeley identifies dozens
of alternative "impact investing" strategies that could generate true
double bottom lines. He also highlights promising civic organizations
with proven methodologies for achieving widely shared benefits at scale.
Proposing practical, actionable, and in many cases profitable solutions
to social and environmental problems, Sustainable offers an incisive
vision of the roles business and finance can and should play in building
a flourishing society.
