Sustainability Investing Goes Mainstream...A Watershed Moment?

Posted in , By David Robinson

Something of significance is afoot in the investment world. Sustainability investing, which includes an evaluation of a company’s environmental and climate change impact, is going mainstream. There has been a paradigm shift from viewing sustainability as a personal or policy value to viewing it as an important consideration in assessing investment risk. Putting it in the positive, companies with strong sustainability policies will be better positioned to thrive in the future, as environmental and climate change considerations become increasingly important. Exhibit #1 is the recent announcement by BlackRock, the largest global asset manager, on a fundamental shift in its investment policies toward sustainability (see below).

  • BlackRock Getting Greener? Larry Fink, BlackRock’s C.E.O., recently announced that BlackRock would begin unwinding investments in companies that posed significant sustainability risks and would introduce new funds that avoid fossil fuels. In Fink’s own words, “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.” How all this plays out for BlackRock and whether it will make a significant difference will be closely watched, but it is unquestionably a watershed time in the financial world. (New York Times) (CNBC) (Wall Street Journal)  
  • Einstein On Compound Interest: Einstein reportedly called compound interest mankind’s greatest invention. Whether that is urban myth or not, compounding is deceptively powerful and something we don’t talk enough about. As Benjamin Franklin said, “Money makes money. And the money that money makes, makes money.” Simply put, the more you save and the less you withdraw from your savings, the more it will grow. Of course, life is more than stacking money up, but financially speaking, it sure is nice to let compounding do some of the heavy lifting. (Inc)
  • IMF 2020 Lukewarm World Economic Forecast: The International Monetary Fund (IMF) continues to forecast positive global economic growth for 2020 (+3.3%) and 2021 (+3.4%). Notwithstanding the growth projections, it calls the recovery outlook “sluggish” and remains concerned about potential trade conflicts. For the US, the IMF crystal ball projects +2% growth in 2020 and then a lower +1.7% 2021. So, is the glass half full or half empty?  (CNBC) (IMF.org)
  • Becoming a Better Listener: The ability to truly listen is one of the most powerful and life changing interpersonal skills we can develop. This article gives six excellent suggestions on how to improve, starting with “Listen to Learn,” a mindset that would change the dynamic of many conversations.  I came across this article in Pocket but believe it’s originally from Fast Company. (Get Pocket)
  • Exercise Benefits the Brain: We all know the benefits of exercise for our bodies but now we are learning more about the benefits to the brain. Some of the brain benefits include priming us to connect with others; making us more sensitive to joy; making us more courageous; building  trust and belonging; and it can even transform our self-image. (Washington Post)
  • The 50 Best TV Shows on Netflix: For those of you in search of serial entertainment. Must be something on this list for almost everyone! A few personal favorites? That would be Unbelievable, The Crown and The Office.   (New York Times)
  • Oprah Gets Her Maine Lobster Roll On: Oprah made her first Maine visit, apparently to discuss a book by the marvelous Elizabeth Strout. What better way to have a book discussion than with a lobster roll in Harpswell, Maine? (Boston Globe) (Portland Press Herald)
  • A Quote I Like:To subtract is to add” by Ozan Varol. Indeed, sometimes less is more.

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About the Author David Robinson

A wealth advisor with more than 25 years of experience in the financial field, Dave serves as Robinson Smith Wealth Advisors’ Co-Chief Investment Officer and is a Co-Managing Member of the firm. As a Certified Financial Planner® and non-practicing attorney, he provides clients with deep expertise in areas including investment management and retirement planning.
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