Sustainability spotlight

There are no side effects – just effects… [Side effects] are just a sign that the boundaries of our mental models are too narrow, our time horizons too short
Professor John Sterman, Director of MIT System Dynamics Group

Sustainability is becoming an ever-more-important theme for the investment industry – indeed, the ‘slow but unstoppable’ sustainability train has now left the station, and is picking up speed. Sustainability is a subject close to the heart of the Thinking Ahead Institute and we have worked on a number of related initiatives since our beginnings in 2015. Much of our work focuses on equipping investment organisations to have a holistic and actionable understanding of sustainable investing and how they create value for wider stakeholders such as society and the planet. We do this through providing easy to navigate tools and guidelines, enabling better alignment of mission and broadening the focus of measurement.

We were proud to be a finalist at the Finance for the Futures 2019 awards, for the category of Driving change through education, training and academia.

Featured

Video series | Beyond ESG: Systems solutions for sustainability

The recent ‘shock of net zero’ has newly alerted the private sector to the scale and pace of transformative change now required to avert not just climate change, but broader ecological disaster. This shock has shone a harsh light on current efforts, prompting rising scepticism about the sufficiency of ESG, and the thinking that underlies it.

Over four sessions, the series evaluates the progress we are making as a global society to become sustainable, explore the deeper solutions to which systems thinking points, and reflect on the actions business and finance might take to promote systems solutions to build a sustainable economy and culture.

Research paper summary | A six-step action plan for net zero

Even though many investment organisations have already made a net-zero commitment, it is our belief that:

The implications of those commitments are not yet fully understood, and
The accompanying actions have not yet all been discovered.

The working group set out to build a framework to help asset owners establish and execute a pathway to achieve their climate ambitions. They developed a six-step action plan to guide asset owners on their climate journey and produced a series of six papers, one detailing each step (taking the IIGCC net-zero framework as a starting point).

Research papers

Investing for tomorrow working group papers

A series of papers written following the research and discussion conducted by the Thinking Ahead Institute’s investing for tomorrow working group. The key objective of this working group is to produce research outputs that can usefully guide investors to establish and set a pathway to achieve their climate ambitions. Beyond this, we hope the outputs help them to become a driving force in transforming the global economy to be compatible with the 1.5C climate target.

A summary of these papers is available here

1.5C working group papers

A series of papers written following the research and discussion conducted by the Thinking Ahead Institute’s 1.5°C investing working group. The key objective of this working group is to produce research outputs that can usefully guide investors’ behaviours to ultimately become a driving force in transforming global economy to be compatible with the 1.5°C climate target while in the same time fulfilling their fiduciary duties.

Sustainability: understanding impact and value creation

An investors guide to communicating value created

Featuring case studies from seven global investment organisations, this paper provides practical guidelines to help organisations define purpose and document beliefs; measure impact; and communicate the value created for stakeholders.

Connecting the dots: understanding purpose in the investment industry

Exploring the purpose of the investment industry and the agents within it, and how the industry’s value proposition to end savers can be developed and improved.

Mission critical: understanding value creation

We propose a vision of what the investment industry should be, and the duty it should take on, and call more stakeholders to the value creation boundary – in particular the planet, and ideally wider society too.

Sustainability beliefs: a new measurement tool

Aiming to help asset owners develop fully-rounded beliefs on sustainability, we include a survey to test benchmark the strength of their beliefs against peers to see if and where they can create an investment edge.

Sustainability portfolio construction

This paper focuses on sustainability risk management and portfolio construction, which are the parts investors tend to struggle to apply the most.

Sustainability portfolio construction case studies

A series of case studies from the sustainability portfolio construction working group.

Duty of ownership

WTW Stewardship and Systemic Resilience
Roger Urwin – The Duty of Ownership

Podcast: Duty of ownership series

Beliefs to action

A conversation with Lucy Thomas, Head of Investment Stewardship at TCorp and Leon Kamhi, Executive Director: Head of Responsibility at Hermes.

A conversation with John Green, Co-CEO of Investec Asset Management and Liza McDonald, Head of Responsible Investment for First State Super.

A conversation with Diandra Soobiah, Head of Responsible Investment at Nest, and Matt Christensen, Global Head of Impact and Responsible Investment at AXA IM.

A conversation with Jaap van Dam, Principal Director of Investment Strategy at PGGM.