Big Financial Investment Shift to Benefit People
We knew these days would come 10 years ago, but now it’s happening and accelerating: Institutional investors are paying close attention to what the world needs and how their investments benefit their constituents (not because they necessarily want to do good, but also out of economic interests.)
It’s a pivotal day when Blackstone’s CEO, Laurence Fink says that companies must behave responsibly and do some good for society in order for Blackstone to consider taking a financial position in the company. That’s a huge event! Here we see a nearly $6 trillion institutional investor saying it’s time to take care of the planet and its people. Another great example of this commitment is New York City announcing the divestiture of its fossil fuel investments.
Sustainability Means Doing the Right Thing
Ten years ago, these initiatives seemed ambitious. We knew we’d need clean energy, clean water, and to recycle all waste – it’s the only way we can live on this now relatively small planet. In fact, the conversation has been more about the patience needed to get everyone up to speed on what’s important in sustainability. But the economics also had to line up. Investment analysts MSCI finds ’empirical evidence’ that strong environmental social and governance performance translates to greater financial returns and lower risks.
We Must Take Care of Customers and the Environment
If a company’s clients aren’t healthy, strong and living well, they won’t be good customers. We must take care of our environment and the social needs of our people so business can thrive.
In the next 50 years, we know we’ll need to recycle everything. We are slowly seeing the economics where almost half of our waste will be profitable to recycle. Similarly, why do we burn fuel when renewable energy is now cheaper then fossil fuels? And, with water costs so high, it will become cheaper to repurpose and recycle water than to buy new water and pay for waste treatment on-site. In many ways, waste is fast becoming the resource of the future.
These are all positive signs pointing in the right direction and none too soon.