Essex: We have been calling the Covid-19 pandemic the great accelerator. This crisis is not necessarily causing any unique changes to business practices rather it is accelerating trends that had already been in place prior to the pandemic. Covid 19 has revealed a need to build more resiliency and stability throughout our economy which is leading to greater demand for distributed power generation, back-up power solutions, a focus on building out a smarter electric grid and more efficient transportation solutions to name just a few environmental and social solutions. The pandemic is reinforcing and accelerating many of the environmental and clean technology trends that we have been investing across.
Silk: The current crisis is pushing investors and companies to examine their normal practices. It is too early to state where the industry will land as the current market volatility down and up may disguise the true impact of the crisis. Maybe wishful thinking but hope the crisis will lead to more engagement and more focus on all stakeholders. Many companies are run tactically with CEO and shareholder first.
Zeo: I think the bigger issue ESG investors face is that the language of change has been limited to a lens of social or mission-driven catalysts in the first place. That is, we talk about changes in corporate behavior as motivated by factors that are not necessarily tied to profits; from this, the traditional investor concludes that profits and change are a mutually exclusive trade-off. We know that to be false.
ESG factors drive financial outcomes as well, and I encourage all ESG investors to start speaking in these terms. This is how responsible investing will take hold in traditional portfolios. This does require investors to take a long-term view rather than focus on short-term relative performance vs. traditional benchmarks, so not everyone will come along. But if the financial costs of, for example, environmental liabilities or a lack of perspective are more broadly understood, self-interest alone will naturally point both ESG and traditional investors toward ESG strategies - not just because these priorities are right, but because they are financially beneficial to boards, CEOs and shareholders.
The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity and Charter Financial Publishing (publisher of Financial Advisor magazine).