Sustainable Investing: The Art of Long Term Performance (Environmental Markets Insights Series)

Sustainable funds outperform mainstream indices

Sustainable investment funds have achieved significant financial outperformance, according to Trucost Vice President Cary Krosinsky.

New research by author Cary Krosinsky shows that sustainable investment funds outperformed mainstream indices between December 2002 and December 2007. The findings, revealed in a new book Sustainable Investing: The Art of Long-Term Performance published today, show that sustainability funds returned +18.7%, on average, versus returns of +17.0 for the MSCI World, +13.2% for the S&P 500 and +13.0% for the FTSE 100 indices.

The sustainability-minded funds, which integrate environmental factors into management strategies or use best in class or sustainability themed approaches, generated superior returns as part of long-term value creation.

The findings are particularly significant for long- term investors who need to address the carbon risks and opportunities in their portfolios now more than ever, as Governments strive to agree future limits on greenhouse gas emissions at the milestone UN climate change talks in Poland.

Sustainable Investing, co-edited by Cary Krosinsky and Nick Robins, head of the HSBC Climate Change Centre of Excellence, highlights how an approach to investing driven by long-term environmental, economic and social factors could help finance a resurgent and more resilient global economy.

Cary Krosinsky said: “Incorporating long-term environmental, social and economic trends into investment decision-making is the best way to generate risk-adjusted returns in the 21^st century. Sustainable investing offers an approach for investors eager to mitigate risk and benefit from upside opportunities, who appreciate the growing financial materiality of environmental, social and governance (ESG) factors. Analysis and tools provided by environmental research companies such as Trucost can help investors to create sustainable, long-term value.”

Nick Robins said: “Whether they are huge pension funds or individual savers, investors are looking for strategies that offer long-term security – and sustainable investing provides the answer. As the world seeks to stimulate an economic recovery, sustainable investing in clean technologies, microfinance and social enterprise offers proven routes to generating wealth and resolving pressing problems such as climate change and global poverty.” 

Endorsements received to date include:

“This splendid compilation of articles, plus a to be treasured Glossary from Mercer, provides up to date analyses of virtually the entire spectrum of socially related investment possibilities. The field is in a rapid state of change – Steve Viederman’s lovely piece on the Fiduciary remains a constant guide – I recommend to everyone that you buy and read this book. Without it, you are playing yesterday’s game.”  - Robert A.G. Monks, shareholder activist, one of the founders of the field of corporate governance, and author of Corpocracy and The New Global Investors, and co-author of Watching the Watchers, Corporate Governance and Power & Accountability

As the roles of business and the capital markets shift to directly address global challenges, practitioners can no longer ignore the growing momentum in sustainable investing practices.  This book fills an important gap in pulling together the best thinking from the experts in the field.  An excellent overview of past learnings, current best practice and future trends."  - Cheryl Hicks, Focal Point, Capital Markets & Valuation, World Business Council for Sustainable Development and Co-Founder, Sustainable Finance Geneva

"This is a significant contribution to a rapidly growing field; the editors have brought to the public important themes and thought-provoking arguments on topics that will dominate the twenty-first century.  This is a must-read book for practitioners and investment analysts alike." - Gordon L Clark, Halford Mackinder Professor of Geography and Director, Oxford University’s Centre for the Environment

 “An excellent volume that puts sustainable investing front and center in the debate about building a more equitable global economy and providing retirement security for working people. “ – Michael Musuraca, Designated Trustee, NY City Employees Retirement System

"Cary Krosinsky and Nick Robins have managed to assemble a unified publication that brings to light the financial innovation occurring on a massive scale for the planet.  From carbon to water and microfinance to private equity, Sustainable Investing has put forth an image of the world where capital markets have the potential to provide solutions to our most pressing environmental problems." - Bryan Garcia, Center for Business and the Environment at Yale School of Forestry and Co-Editor of Carbon Finance: Environmental Market Solutions to Climate Change 

 “’Sustainable investing” has lacked a rigorous, systematic examination – until now.  Nick Robins and Cary Krosinsky have assembled authors expert in their disciplines who collectively describe a dynamic force which is both effecting change and being affected by it.   A generation of investors will look first to Robins & Krosinsky for answers about sustainable investing.” - Peter D. Kinder, President & Founder, KLD Research & Analytics, Inc

"If you want to understand how finance can offer practical solutions for sustainable development - rather than being criticized for being an obstacle - read this very clear, comprehensive and persuasive book" - Antoine de Salins, Executive Director, FRR (Fonds de Réserve pour les Retraites)

 "This book demonstrates a dramatic sharpening of focus in efforts to re-engineer key financial practices and institutions, just as the economic and environmental challenges become more absolute to preserving a planet that is convivial for human livelihoods.  It is a pre-condition for our collective survival to have investment practices that enable us to live within our global environmental budget. Sustainable Investing does two things brilliantly: it lays bare a financial system that is currently not fit for purpose, and then it draws a blueprint, with added operating instructions, for a transformational redesign." - Andrew Simms, Policy Director, New Economics Foundation

"SRI is morphing into sustainable investing.  Is this just "brand refreshment" or is, as this rich collection of essays from the leading experts in the field argue, something more fundamental?  So whether you didn’t like SRI first time round or whether you are worried about the
SRI baby being lost with the bathwater, buy this book and read it!" - Raj Thamotheram, Director, Responsible Investment, Axa IM

"Sustainable investing is vital for the future of our planet.  It needs informed analysis, explanation and advocacy, and in Robins, Krosinsky and the contributors to this volume it finds them.  The book charts the multiple tributaries that are now converging into an investment current that has the potential to make a major contribution to addressing some of the greatest challenges facing the world.  It richly deserves to be read by everyone in the investment community - and many beyond." - Rob Lake, Head of Sustainability, APG Investments, The Netherlands

" This book is packed with valuable insights into an area of growing importance.  It would only be better if the book was made available in Japanese (or any other language) to allow more readers to have the opportunity to learn from it." - Akitsugu Era, Corporate Governance Manager, Equity Fund Management Dept., leading Japanese financial institution

“In this book on sustainable investing the editors have put together an extremely useful collection of eighteen essays on various aspects of this important subject. A collective thanks should go to all the contributors (many of whom are practitioners from the investment community). This volume goes a long way to sorting out the confusion among terms such as socially responsible investing (SRI), ethical investing, responsible investing and sustainable investing. Contributions run the gamut from background and contextual information regarding sustainable investing, to arguments as to why sustainable investing has to date performed better than the market as a whole, as well as better than SRI investing.

The interested reader would be well advised to read this collection of essays that, to my knowledge, provides an excellent summary of the state of the art thinking on these topics.” - James P. Hawley, Professor and Co-director, Elfenworks Center for the Study of Fiduciary Capitalism, Saint Mary’s College of California

"This timely and thought-provoking collection of essays, [written by some of the industry’s leading experts], is essential reading for all those who want to understand how sustainability has influenced investment practice. It clearly demonstrates the potential for sustainable investment to become the new ’mainstream’." - Emma Howard Boyd, Head of SRI, Jupiter Asset Management

’From sin stocks to cleantech, ESG to GHGs, portfolio tilt to the prudent man rule, Krosinsky and Robins guide the reader through a rapidly shifting landscape of risk and opportunity.  Essential reading, whether you are an investor, a CEO or simply someone wanting to enjoy both a pension and a world fit for future life.’ - John Elkington, co-founder of ENDS, SustainAbility and Volans, and co-author of The Power of Unreasonable People.