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Real Returns

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Real Returns

The biggest opportunities in sustainable investing

Practical Inspiration Publishing,

15 min read
8 take-aways
Audio & text

What's inside?

The race to build a sustainable economy has begun; learn where wise investors are placing their bets.

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Editorial Rating

8

getAbstract Rating

  • Overview
  • For Beginners
  • Insider's Take

Recommendation

Could the same systems that helped create today’s climate challenges also help solve them? In this engaging read, sustainable investing consultant Wincel Kaufman argues that people today have an unprecedented opportunity to direct capital toward sectors positioned to benefit from a lower-carbon future. Learn about ESG investing, impact funds, net-zero frameworks, carbon markets, and the evolving tools being used to measure sustainability in financial decision-making. According to Kauffman, better incentives, improved reporting, and more thoughtful capital allocation can transform institutions into engines of both profit and progress.

Summary

ESG investing is failing to drive the systemic changes needed to achieve broader sustainability goals.

ESG investing centers around the idea that investors can support companies with stronger environmental, social, and governance practices while still earning competitive returns. In practice, however, the approach has struggled to deliver large-scale environmental progress. One major issue is that there is no consistent standard for measuring ESG performance, making it difficult for investors to know what a high ESG score actually means. Also, many ratings compare companies only against others in the same industry rather than against broader sustainability goals.

For example, a fossil fuel company may receive a strong ESG rating simply because it performs better than other fossil fuel companies, even though its overall negative effect on climate change remains significant. ESG assessments tend to reward companies for having policies, targets, and reporting structures in place, even when those commitments have not translated into meaningful environmental outcomes. As a result, strong scores can reflect good intentions or management processes more...

About the Author

Wincel Kaufman holds an executive MBA from INSEAD, a CFA Sustainable Investing Certificate and a degree in Economics. She is an Advisory Board Member of the Solar Impulse Foundation and serves as a judge for the Women of the Future Awards.

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