3 hurdles to sustainable investing — and how to overcome them
Can sustainable investing save the world?Jason Jay, director of the MIT Sloan Sustainability Initiative, thinks so — with three caveats.
In a March 2021 talk, part of the MIT Impact Investing Initiative spring speaker series, Jay laid out the case for sustainable investing and outlined three major challenges. Sustainable investing is at a tipping point, said the MIT Sloan senior lecturer.
“What’s been happening over the last 20 years — and really accelerating over the last five years — is that investors are starting to consider the social and environmental impacts of companies as being important to their own return,” Jay said. “Capital markets are moving very fast to try to incorporate social and environmental performance into the way companies are valued and the way that investors take action.”
However, there are three obstacles standing in the way of that momentum:
Hurdle 1: Misalignment in the investor community
“Big asset owners who shape the markets are complicated beasts — they’re organizations or multiple family members who, across generations, might have different perspectives, and we know that younger generations are more concerned about social environmental issues,” he explained.
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