Investing in a Sustainable World

Why Green Is the New Color of Money on Wall Street

"Matthew Kiernan has redefined global thinking around sustainable finance and responsible investment. Without Kiernan's work since the late 1980s, the battle to drag institutional investors to the sustainability table would have been immeasurably harder. Kiernan's magic, as this book gives fine witness to, is based on a deep intellect, the confidence to continually challenge the investment status quo and the ability to see fundamental changes in the markets well in advance of the mainstream."

--- Paul Clements-Hunt, Head, United Nations Environment Programme Finance Initiative (UNEP FI), Member of the Board, UN Principles for Responsible Investment (PRI)

“Socially responsible investing” certainly sounds like an admirable way to help fund the fights against global warming, poverty, and many other issues threatening our planet. Still, few investors have the luxury of losing money on low-performing do-gooders, especially in these times of stock market volatility and a looming recession. However, what they may not know is that: paying attention to formerly neglected environmental and social risks – and opportunities – pays off in terms of competitive advantage and shareholder returns, a fact which is backed up by the track records of a wide range of both companies and investment funds worldwide. The current global market meltdown actually provides a trillion-dollar “advertorial” for sustainable investment – and for this compelling new book. Using the same analytical approaches and techniques espoused in the book, the author and his firm predicted the sub-prime crisis six months ahead of Wall Street, and detected potentially fatal flaws at Bear Stearns a full year before they became widely evident.

In INVESTING IN A SUSTAINABLE WORLD: Why Green Is the New Color of Money on Wall Street (AMACOM 2008), Matthew J. Kiernan provides the rational arguments and empirical evidence to convince all investment stakeholders that integrating environmental and social (ES) factors into business practices is critical to the financial health and longevity of both investors and the companies they’re evaluating, as well as to the economies and societies in which they operate. A pioneer and world-renowned authority on sustainability investment research, Kiernan backs his compelling investment case with hard numbers and concrete examples of organizations that are successfully combining sustainability—that is, attention to ES issues with profound economic implications—with commercial viability. As Kiernan makes clear, these leading-edge companies have already launched the “Sustainable Investment Revolution”—a mounting global movement promising to dramatically change finance while financing change.

“ES issues need to be consciously, visibly, and systematically integrated into the nuts and bolts of investing: asset allocation, stock selection, and portfolio construction,” Kiernan contends. He begins by explaining why this is imperative, citing the unprecedented confluence of global megatrends—accelerating natural resource degradation, rapid population growth in emerging markets, and higher consumer expectations for corporate behavior, for starters. He culminates by giving investors a conceptual framework and the practical tools and tactics to make it happen.

Setting the record straight on the relevance and the tangible rewards of factoring ES factors into investment decisions, INVESTING IN A SUSTAINABLE WORLD features:

• A persuasive “demolition job” on many of the pernicious investment myths that continue to impede the Sustainable Investment Revolution.

• A hard-hitting look at the current state of major environmental and social challenges— including climate change, water pollution, labor rights, and access to affordable medicines in emerging market—and where we’re likely to stand tomorrow.

• Insights into evaluating a company on its sustainability positioning, risks, and performance, in conjunction with traditional, quantitative investment analysis.

• Hallmarks of companies sustainability investors will want to consider, with real-world examples of sustainability leaders—Mitsubishi Heavy Industries, United Technologies Corporation, and Unilever among them—from a wide variety of countries and industries.

• Spotlights on an array of “Game-Changers”—including pension funds, endowments, foundations, and investment service providers—who are helping redefine sustainability investment thinking and practice.

Complete with basic tenets, crucial caveats, and lists of forward-thinking questions, INVESTING IN A SUSTAINABLE WORLD is an invaluable guide for everyone with an investment stake, from individual investors and their money managers to the executives, boards, and staffs of pension funds, endowments and foundations, labour funds, and both private and publicly traded companies. As Kiernan reveals, sustainable investment is not only profitable, it may also be the solution we’re seeking to many of the world’s environmental, social, and financial problems.

ABOUT THE AUTHOR:

Matthew J. Kiernan, Ph.D., is Founder and Chief Executive of Innovest Strategic Value Advisors, Inc., an internationally respected sustainability investment research firm, with offices in New York, Tokyo, London, Paris, Sydney, San Francisco, and Toronto. He previously served as Director of the World Business Council for Sustainable Development. In 2009, Dr. Kiernan will speak for the fourth time at the prestigious World Economic Forum in Davos, Switzerland. He lives in Ontario, Canada.