“The days of greenwashing are over,” remarked Kevin Parker, CEO of Sustainable Insight Capital Management, during a panel discussion on sustainable finance hosted by the Earth Institute and the School of Continuing Education at Columbia University. On Wednesday, February 4, 2015, nearly 250 professionals, students, and academics attended the panel and reception on ‘The Field of Sustainable Finance: Foundations and Future Growth’ at the Columbia University Club in midtown Manhattan. View a complete recording of the panel here.
The evening began with a welcome by Steven Cohen, executive director of the Earth Institute, followed by brief remarks by Satyajit Bose, a Lecturer in the Discipline of Economics at Columbia, setting the stage for the panel discussion. The talk was moderated by Travis Bradford, Associate Professor of Practice in International and Public Affairs. The collective experience on the panel was wide-ranging, from a Wall Street professional/sustainable organic farmer, to a former preschool teacher turned corporate responsibility expert. The representatives from across the field included:
- Frank Barbarino, Vice President, Goldman Sachs
- Michael Davis, Director, Institutional Client Relationships, Calvert Investments
- Sonal Mahida, Head of North America, Networks & Global Outreach, the Principles for UN Responsible Investment Initiative
- Kevin Parker, CEO, Sustainable Insight Capital Management
- Amy Springsteel, Director of Corporate Responsibility, Voya Financial
Twenty years ago, this group of professionals would not have gathered to have this kind of discussion in the public sphere – a fact that the panelists themselves recognized. This shows the growing interest in the field of sustainable finance, also indicated by the sheer number of people that attended the event; the room was packed and it became a standing room only affair.
What does sustainable finance mean? Frank Barbarino remarked that the concept of ‘sustainable finance’ is hard to define, made more difficult by the fact that these terms separately have various meanings. In short, it is the act of giving capital to individuals and businesses who want to make productive use out of it; it involves investments that create both financial return and social good. This often means integrating environmental, social and governance (ESG) criteria into business or investment decisions. Thus far, sustainability has been treated as a moral issue, but people are now realizing that it is as much a material issue. Sustainability has to find its way in the world by showing that it makes money for asset owners – and Kevin Parker noted that it is slowly doing just that. In another five or ten years, he predicts that the terms ‘sustainable’ and ‘finance’ won’t be separate at all. Parker was adamant that sustainability as a stand-alone issue will disappear, and Amy Springsteel agreed by talking about how crucial the incorporation of ESG factors are to the viability of her company – a sentiment that surely others share.
Sonal Mahida remarked that environmental and social issues are material, and all panelists agreed that people, investors, asset managers, etc., recognize this trend. Yet, as Bradford asked, how do we overcome the perception that there is a divide between optimal return and optimal social outcome? Between doing well and doing good? Between short term and long term investment opportunities? While no one really has the answers to these questions, the panelists did discuss some important trends that indicate that, perhaps, it will happen somewhat naturally. For example, even though it’s hard to measure social impact, social risk is much higher than it was twenty years ago. We may not be able to price that risk (yet), but companies understand the consequences of not adhering to certain social standards. In addition, there are a number of promising demographic changes, with a growing number of women and millennials in the field, who are 2-3 times more likely to say that these issues are material. While some veterans in the field may not want to change what they’ve been doing, as the culture of the field changes, so too will they.
The sheer number of people in the room was a great indicator of the high level of interest in the space, and Bradford asked panelists to identify the skills needed for those entering the field. Davis remarked that the trends he is seeing are towards an eclectic mix and wide range of experiences – a math, science and policy background; studies in both economics and environmental science; experience with Wall St. and Greenpeace, for example. Mahida’s advice was to be pragmatic, and she discussed her own realization that money is what makes the world turn. Springsteel talked about the importance of figuring out what you want to do in the field of sustainable finance. Do you want to be part of corporate social responsibility policies, join a data provider company, or be in academia? Figure out what you want to do, then figure out what skills you need to do it. And finally, Parker remarked that whether you are in the field or not, you probably have to understand what it is, because the basic concepts are not going away.
This event came at a timely time for Columbia University. Steve Cohen announced the launch of a new Certification in Sustainable Finance being offered through the School of Continuing Education and the Earth Institute. Beginning in fall 2015, sustainability and finance professionals, and others who don’t want or need a full master’s degree (or already have one) can enroll in a 12-point graduate certification program in Sustainable Finance. This certificate will offer classes in global environmental markets, cost benefit analysis, and energy and sustainable development, to name a few. The certification program equips graduates with the practical information and tools they need to understand the impact of environmental sustainability in corporate financial management and in financial markets, and enables them to prepare for and manage the consequences of both.
For more information about the Certificate in Sustainable Finance, contact Allison Ladue, associate director, at email@example.com.