Consider this excerpt from these letters as an example:
"Climate change has become a defining factor in companies’ long-term prospects...Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward." But wait...
Are these just nice words, or are people really following through?
Consider this graph below from Morgan Stanley...
Adoption of sustainable investing lags interest in sustainable investing.
Is that gap due to (1) lack of follow through, (2) a desire to say nice things but then worry about sacrificing returns in pursuit of environmental or social impact, or (3) a lack of good or easy options to satisfy investors?
I hope it's the latter.
I hope that the gap suggests new opportunities to create the needed investment vehicles, and to build the companies that will harness this capital to grow profits and impacts.