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The future of sustainable investing

Sustainable investing has undergone a number of phases during its development. Each of these
have contributed methodologies and tools that sustainability focused investors still use today. The
most important there has been a shift from a moral or ethical assessment of business activities
to the integration of financially material environmental, social and governance opportunities and

risks (Lazzard Asset Management, 2020). Adapting to a sustainable investment environment will
be a challenge for firms and will claim changes to the existing technology, culture and processes.
Therefore, it is decisive to recognize that progress in this area can vary notably across different
jurisdictions and geographies.

For sustainable investing to become mainstream, financial professionals need to have the
necessary skills and understanding of how to merge ESG considerations in their investment
decisions and when advising clients. In addition, any financial institution that tends to provide
services in this area needs to have mandatory ESG training for relevant staff. This would enable
front-office employees, such as investment advisors, to raise awareness about this new way of
investing by talking about it in relevant events and to educate their own clients. ESG training
would also be fundamental for middle and back-office staff responsible for reporting, risk

management and sustainability-related disclosures.
However, if the key drivers discussed earlier can create the expected demand, and if there is a
preparedness from market participants to transmute the traditional way of doing finance, it is only

a matter of time (International Institute for Sustainable Development, 2022).
As ESG-minded business practices gain more attention, investment firms are increasingly
tracking their results. Financial services companies such as and Goldman Sachs (GS), JPMorgan
Chase (JPM) and Wells Fargo (WFC) have published annual reports that comprehensively review
their bottom-line results and ESG approaches (DSI Insights, 2022). Indeed, sustainable investing

presents the future of finance. Certainly, there is still a lot of progress to be made before it
becomes truly mainstream.

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