The Financial Ecosystem

Long term asset owners and managers, while seeking high risk-adjusted returns and efficiently allocating scarce financial capital to the highest value economic activities, have the essential and formidable role of ensuring the sustainability of return. But generally accepted financial accounting methods are ill-equipped to provide clear signals of the risks and opportunities created by scarce natural and human capital. Hence many investment managers in global financial markets, while performing due diligence on portfolio companies, examine metrics of non-financial performance, especially environmental, social and governance (ESG) indicators. Broken into three sections, this book outlines the rationale for and methods used in six areas where financial acumen has been harnessed to the goal of combining monetary return with long run sustainability. The first section offers an introduction to the role of finance in achieving sustainability, and includes an overview of the six areassustainable investing, impact investing, decentralized finance, conservation finance, and cleantech finance. The methods section of the book illustrates analytical tools and specialized data sources essential to those interested in increasing the level of social responsibility embedded in economic activity. The applications section describes and differentiates each of the six areas and their roles in advancing specific measures of sustainability.

Outlines the rationale for and methods used in six areas where financial acumen has been harnessed to the goal of combining monetary return with long run sustainability Illustrates analytical tools and specialized data sources essential to those interested in increasing the level of social responsibility embedded in economic activity Describes and differentiates each of the six areas and their specific roles in advancing specific measures of sustainability

Auteur
Satyajit Bose is Associate Professor of Practice at Columbia University, where he teaches sustainable investing, cost benefit analysis and mathematics and serves as Associate Director of the Program in Sustainability Management. Satyajit is also Co-Chair of the University Seminar in Sustainable Finance, a forum for faculty and finance practitioners to discuss and research methods to use the financial system, with the help of technology, innovative design and disruptive change, to mobilize capital for sustainable development and widespread beneficial impact. Satyajit was previously the Faculty Director of the joint Earth Institute-RFK Compass Education Program which trained institutional investors how to incorporate environment, social, human rights as well as corporate governance issues as integral elements of risk mitigation and return optimization.
Guo Dong is Associate Research Scholar and Associate Director of the Research Program on Sustainability Policy and Management at Columbia University's Earth Institute. Dr. Guo teaches courses on Microeconomics and Quantitative Methods for masters students in Columbia's School of International and Public Affairs. Dr. Guo's expertise lies in impact and evaluation methods and his research interests include sustainability metrics, sustainable development, environmental policy and Chinese education.
Anne Simpson is Director of Board Governance and Strategy at the California Public Employees Retirement System (CalPERS), where she led the development of the fund's sustainable investment strategy, and previously headed the corporate governance program. She is a member of about the SEC's Investor Advisory Committee, and the Leadership Council of the RFK Center for Justice and Human Rights. She serves on the Senior Advisory Board at the Center for Responsible Business, in the Haas School, Berkeley, California.

Simpson writes in a personal capacity and the opinions expressed are the author's own. They do not necessarily reflect the views of her current employer, CalPERS.

Contenu

1. The Role of Finance in Achieving Sustainability.- 2. The Value and Limits of Financial Accounting.- 3. Financial Markets and Pricing.- 4. Discounting and Cost-Benefit Analysis.- 5. The Value of Environmental Accounting in Public Decision Making.- 6. The Monetization of Natural Capital in Corporate Investment.- 7. The Returns to Good Stakeholder Relations.- 8. Sustainable investing in public markets.- 9. Impact investing in private markets.- 10.Conservation finance and payments for ecosystem services.- 11.Clean-tech finance and the transition to renewable energy.- 12.Social entrepreneurship and distributed poverty alleviation.- 13.Financing innovation in sustainability.