We couldn’t find the sustainable investment training that we think that real investors want and that the industry needs wants – so we built it ourselves
How can ‘greenwash’ in sustainable investment be avoided? There are three possible ways:
- [a] much hope is pinned on regulation. However, as many regulators appear to be mind-captured by the quasi-quantitative nonsense that manifests in the search for massive granular comparable datasets, I don’t personally hold out much hope here.
- [b] high-quality demand by institutional investors (asset owners) – there is hope here from investors that articulate clearly their own sustainability and financial objectives and rigorously interrogate the ability of asset managers and investment strategies to deliver on these objectives.
- [c] high-quality supply by asset managers
IMHO the last of these is dependent on three things:
- alignment between the sustainable investment strategies and the ‘mainstream’ investment strategies applied by each asset manager (self-evident but too rarely achieved)
- the supply of high-quality, fundamental sustainable investment research (undertaken in-house by asset managers and external third parties) through an open transparent marketplace
- analysts and portfolio managers that have the capacity to apply high-quality research to integrated investment strategies
The last of these raises a few significant questions:
- How those committed to quality within sustainable investment industry train the rapid influx of newcomers in a way that gives them both the tools and the independence of thought to achieve quality?
- What training is currently available?
- What is missing and needs to be developed?
Aline Reichenberg Gustafsson, Willem Schramade and I started asking these questions about six months ago; we evaluated all of the sustainable investment training courses that we could find in the market (see Training Directory here for everything that we found. Let me know (in comments below) if you’re aware of anything that we missed).
What we found
… that there are:
- Lots of general introductions to sustainable investment
- Lots of analysis of current market trends – at conferences
- Lots of in-house training – being undertaken on an ad hoc basis by sustainable investment analysts
- Lots of contextual training on sustainable investment standards / policy / regulatory developments etc.
- Lots that treats SRI/ESG as a new investment discipline
… and there is merit in all of these. (Well, except perhaps the last one – which is nonsense!)
We could not find … so we built …
What we could not find, however, was training that treats sustainable investment as simply an extension of existing investment disciplines … that considers sustainability to be just another structural investment trend (like the emergence of China as a manufacturing superpower, urbanisation, the development of e-commerce or social media) … that approaches sustainability issues as factors to be applied through fundamental valuation into sector weighting and stock selection decisions.
Basically, we couldn’t find training courses with immediate practical application for analysts and portfolio managers and, importantly, we couldn’t find training courses that addressed the
Significantly, we couldn’t find courses that helped ‘mainstream’ analysts and portfolio managers and analysts work more closely with sustainability specialist analysts and portfolio managers.
We couldn’t find them so, we built them:
- Sustainable investment integration – a 2 x 1/2 day course that equips ‘mainstream’ financial analysts with the motivations, technical skills and communications capabilities to apply sustainability factors to their valuation and investment process
- Financial analysis, modelling & valuation – a 7 session course that teaches ESG / Sustainable Investment professionals the fundamentals of investment analysis … and does using sustainability-related examples and with reference to the practical ‘day job’ priorities of sustainable investment analysts
That’s it. That’s the punchline. Aline, Willem and I have just finished building two courses that we believe fills a gap in the market and addresses one of the three issues central to the challenge of avoiding ‘greenwashing’ in sustainable investment.