Sustainability: Business and Investment Implications

Why does sustainability matter for businesses and financial institutions? "Sustainability: Business and Investment Implications " explores the opportunities and challenges presented by sustainability, the energy transition and the decarbonization of the economy. This multi-author handbook lays the groundwork for understanding corporate sustainability, sustainable finance and the transition to a lower carbon economy. This volume offers a comprehensive roadmap, providing a range of perspectives on and paths toward tackling sustainability issues and also seizing the opportunities that come with it. It is published by World Scientific Publishing which is one of the leading academic and professional publishers in the world.

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Over the past years, the United Nations and global leaders have emphasized the role that the private sector can play in protecting the environment and addressing sustainability issues such as climate change. Historically, governments have played the leading role in addressing sustainability issues and externalities, mainly through environmental policies, laws, and regulations. Though governments have recently demonstrated their ability to provide large amounts of capital to support the economy amidst the COVID-19 pandemic, their high level of debt and fiscal constraints have led many to question their ability to tackle sustainability issues on their own. The private sector is well-positioned to fill the gap.

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For centuries, competitive markets have been drivers for growth and improvement of quality of life. It is paramount to ensure these markets are compatible with sustainability and can adequately mitigate and adapt to climate change. These changes require a significant amount of capital, and knowledgeable investment and business professionals to deploy it. But while the awareness of sustainability has significantly increased over the past decade, there are still major gaps in both investments and skilled professionals who understand sustainability-related opportunities and threats. These factors led to the development of this handbook.

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Corporate sustainability and sustainable finance are evolving so quickly that it can be difficult to keep up. Multiple frameworks, regulations, strategies (impact investing, shareholder engagements etc.), and acronyms (ESG, SRI, etc.) have emerged over time. This book untangles these various terms and explores the implications of sustainability for financial institutions and companies of various sizes (from start-ups to large multinational corporations). It delves into the financial impacts of sustainability, analyzing both profitability and market valuation indicators, and also presents the financial case for embedding sustainability at the core of business strategy. Sustainability is a major topic which interacts with many fields. This volume investigates the intersection between sustainability and business strategy, product development, entrepreneurship, risk management, finance, investing, economics, policy, laws and regulations. This book provides a solid foundation for understanding and working within these flourishing domains on which greater expertise can be built.

The sobering findings of scientists on the state of the world and the planet require immediate action, from as many people as possible and across the political divide.?"Sustainability: Business and Investment Implications " provides insights for businesses and investors on how to navigate this complex landscape of sustainability. It is intended as a primer for university business schools and schools of public policy and administration. It also appeals to a broader readership, including thought-leaders, entrepreneurs, professionals, policymakers, regulators, technical specialists, and the public at large.

Written by 15 contributors ranging from world leading experts and policymakers, to professionals with hands-on experience in businesses and financial institutions (including multilaterals) as well as professors from leading institutions in the United States, France and Switzerland, "Sustainability: Business and Investment Implications " investigates why sustainability matters for business and financial institutions. The editors and chapter authors invite readers to be part of the solution ― whether they work for a large company or a not-for-profit, whether they build their own business or become an investor, a banker, an engineer, a researcher, or a policymaker. Sustainability is multi-faceted and requires professionals of all kinds. We hope that readers will be inspired by this book so that they can address the challenges and seize the opportunities that lie ahead.

WHERE CAN YOU BUY THE BOOK ?

• The handbook can be purchased in both hardcopy and kindle on Amazon (here ) where reviews would be much appreciated!
• The book can also be purchased in hardcopy and ebook formats on the publisher website (here ) where you can benefit from a 25% discount using the code WSMGT25.

BOOK STRUCTURE AND CONTENT

The volume is organized as follows:

• Introductory Section
• Part I - Business Implications
• Part II - Investment Implications
• PART III - Environmental Implications
• PART IV - Policy Implications

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INTRODUCTORY SECTION

The Introductory Section includes Chapter 1, which provides an overview and a roadmap for the volume, and Chapter 2, which presents the fundamentals of sustainability science and the main sustainability challenges. Over the past 250 years, the world has witnessed significant economic development and made great progress in meeting human needs. Human living standards have never been higher. Unfortunately, this economic development has come with significant consequences such as climate change, pollution, and biodiversity loss. The impact of these issues is so great that they have been characterized as potentially “compromising the ability of future generations to meet their own needs”. An alternative development model that preserves sufficient resources for the next generation to meet their needs is defined as “sustainable development”.

These chapters convey the importance of the topic before the later sections delve into the implications for private sector businesses and investors, the environment, and public policy.

PART I - BUSINESS IMPLICATIONS

Part I (Chapters 3–7) explores the business implications of sustainability. Chapter 3 introduces key concepts related to corporate sustainability and examines the critical topic of materiality: both the “outside-in” (how sustainability impacts business and financial performance) and the “inside-out” (how a business impacts the environment and society). It also highlights the limitations of siloed approaches to sustainability.

Chapter 4 offers an alternative approach, investigating the integration of sustainability from a company’s very inception by looking at sustainability considerations for entrepreneurship and startups. Chapter 5 explores the financial implications of sustainability, analyzing both profitability and market valuation indicators, while Chapter 6 presents the financial case for embedding sustainability at the core of business strategy. The section closes by examining the intersection of sustainability and risk management in Chapter 7.

PART II - INVESTMENT IMPLICATIONS

Part II (Chapters 8–11) transitions to the investment implications of sustainability and the perspectives of investors and financial institutions. Chapter 8 introduces sustainable finance and investing with its various strategies. Chapter 9 puts these strategies into practice by exploring how to build a sustainable portfolio using financial products that can span across all asset classes from green bonds to sustainable exchange traded funds (ETFs). The section also examines two specific sustainable investment strategies: impact investing (Chapter 10) and shareholder engagement (Chapter 11).

PART III - ENVIRONMENTAL IMPLICATIONS

Part III (Chapters 12–13) then focuses on the environmental dimension of sustainability. Chapter 12 broadly explores environmental sustainability, the energy transition, and climate finance. The book underscores the significant opportunities presented by the energy transition away from fossil fuels, while cautioning against the pitfalls of ignoring their harmful effects. This transition will impact most sectors including transportation, and must occur as fast as possible to keep global warming from reaching irremediable tipping points. Chapter 13 focuses on the business and financial implications of climate change. It also exposes the risks of climate change which can be divided into two categories: physical (resulting from weather events) and transition (resulting from enacted policies).

PART IV - POLICY IMPLICATIONS

The final section, Part IV (Chapters 14–17), moves beyond the private sector to look at public policy implications. Chapter 14 investigates the field of economics and highlights imperfections that materialize through the concept of externalities. Chapter 15 explores how policymaking can address these externalities through environmental policy and regulations, while Chapter 16 focuses on the roles of the State and fiscal policy in tackling the challenges of climate change adaptation. Chapter 17 highlights the macro-economic implications of sustainability and offers some cautionary remarks about some hidden threats to the sustainability agenda.

CHAPTERS & AUTHORS

Chapters number includes links to chapters abstracts and chapter 1 in full. Each chapter can be purchased individually for online access on the publisher website.

Chapter 1 ? -? ?Background and Context - Diane-Charlotte Simon

Chapter 2 ? -? ?Sustainability: Science and Challenges - Danny Bressler

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Part I Business Implications

Chapter 3 ? -? ?Business and Sustainability - Diane-Charlotte Simon & Laurie Lane-Zucker

Chapter 4 ? -? ?Entrepreneurship and Sustainability - Andrea E McGrath MBA I MPA & Laurie Lane-Zucker

Chapter 5 ? -? ?Corporate Sustainability and Financial Performance - Diane-Charlotte Simon

Chapter 6 ? -? ?The Financial Case for Embedding Sustainability Core into Business Strategy - Tensie Whelan

Chapter 7 ? -? ?Risk Management and Sustainability - Robert (Bob) Pojasek, Ph.D.

Part II Investment Implications

Chapter 8 ? -? ?Introduction to Sustainable Finance & Investing - Diane-Charlotte Simon

Chapter 9 ? -? ?Building a Sustainable Portfolio - Diane-Charlotte Simon

Chapter 10 - ?Impact Investing - James Gifford & Jér?me Tagger

Chapter 11 - ?Shareholder Engagement - James Gifford & Robert L Berridge

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Part III Environmental Implications

Chapter 12 - ?Environmentally Sustainable Businesses, Energy Transition, & Climate Finance - Diane-Charlotte Simon

Chapter 13 - ?Business and Financial Implications of Climate Change - Alan Miller

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Part IV Policy Implications

Chapter 14 - ?Market Imperfections: Internalizing the Externalities - Ingmar Schumacher

Chapter 15 - ?Environmental Policies, Laws, and Regulations - Karl Boyd Brooks and Diane-Charlotte Simon

Chapter 16 - ?Climate Change Adaptation, the Role of the State, and Fiscality - Peter S. Heller

Chapter 17 - ?Macro-economic Implications of Sustainability - Alexander Preker and Susan C. Hulton

CONTRIBUTORS

"Sustainability: Business and Investment Implications " was initiated and led by Diane-Charlotte Simon who acted as co-editor and main author. Alexander Preker (Editor-in-Chief for the World Scientific Series on Health Investment and Financing) and Susan Hulton acted as co-editors and chapter authors. 12 additional experts contributed to the book as chapter authors.

ABOUT THE EDITORS

Diane-Charlotte Simon is a finance professional committed to sustainability and the energy transition and has participated in transactions worth more than US$10 billion dollars in the renewable energy sector. She is currently a Vice President and Sustainable Banking Coordinator at Credit Agricole Corporate & Investment Bank, where she focuses on project finance in the US power sector. She has financed organizations of various sizes and life-cycle stages from early-stage start-ups to mature public companies. Previously, she worked as a Research Analyst at NewWorld Capital, a private equity firm providing growth capital and business assistance to companies generating environmental co-benefits. ??

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Alexander S. Preker is a globally recognized expert on financing, capital investment, private sector development, and market-based solutions to public policy challenges. He is one of the Commissioners for the Global Commission on Pollution, Health, and Development, USA.? He is President and CEO of the Health Investment & Financing Corporation, USA and a board member of several companies. Prior to his current work, Professor Preker had a distinguished career, working during decades in the World Bank (Chief Economist for Health), the International Finance Corporation (IFC) (Head of Health Investment Policy) and other international organizations. He has published extensively, having written many scientific articles and authored over 20 books. He holds several academic appointments including at Columbia University, USA.

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Susan C. Hulton is an international lawyer and legal adviser specializing in public international law.? She has extensive experience advising governments, and a record of leadership and innovation as a senior manager in the United Nations, an international criminal tribunal, and an international nongovernmental organization.? She is active in advocacy work in New York City and New York State in support of environmental justice. During the early 1990s, she was legal adviser on territorial sovereignty disputes; boundary issues (land and sea); and international environmental and natural resources law. From 1994 and 2000, she was a Legal Adviser with the UK Foreign and Commonwealth Office in London. From 2001 to 2018, she served as a senior official with the United Nations Department of Political Affairs at the United Nations.

ABOUT THE CHAPTER AUTHORS

Robert L Berridge is Senior Director of Shareholder Engagement at Ceres, USA where has worked since 2006. Previously, he was a general manager for Green Century Capital Management helping to oversee the marketing and operation of two environmentally focused mutual funds as well as the exploration of new fund ideas focusing on best-in-class ESG strategies.

Karl Boyd Brooks is a lawyer and a former EPA Regional and Assistant Administrator and former U.S. Supreme Court Fellow. After practicing law for a dozen years, he was named EPA Regional Administrator for the American Heartland by President Obama in 2010. Dr. Brooks has taught and written about the interaction of law and government administration for a decade.

Danny Bressler is an economist who served in the Biden Administration as a Climate Staff Economist at the Council of Economic Advisers from 2021–2022. His research, which focuses on climate change economics as well as other global risks, has been cited by the Supreme Court and covered in outlets such as the New York Times, NPR, Scientific American, and Vox.

James Gifford is the Head of Sustainable and Impact Investing for Credit Suisse. He is also a Senior Fellow at the Centre for Sustainable Finance and Private Wealth at the University of Zurich, Switzerland where he teaches a joint program with Harvard, USA on impact investing for the next generation of ultra-high-net-worth family members. James was the founding Executive Director of the UN Principles for Responsible Investment. Dr. Gifford has published numerous articles and book chapters on sustainable investment.

Peter S. Heller worked at the International Monetary Fund (IMF) for almost 30 years, where he wrote extensively on issues of economic development and poverty reduction, macro fiscal policy, and climate change. At the IMF, he was the Deputy Director of the Fiscal Affairs Department of the International Monetary Fund. His book, Who Will Pay? Coping with Ageing Societies, Climate Change, and other Long-Term Fiscal Challenges, was published by the IMF in 2003. He has taught and written extensively on economic and fiscal issues.

Laurie Lane-Zucker is the Founder and CEO of Impact Entrepreneur, PBC, USA, an impact economy business that hosts the Impact Entrepreneur Network and publishes ImpactEntrepreneur.com , a digital media source covering impactful business and finance solutions advancing sustainability goals around the world. For over 30 years, Laurie has been a recognized leader in sustainability, social enterprise, and impact investing.

Andrea E McGrath MBA I MPA is the Founder of Amplified Impact, USA a strategic advisory and research firm. Mrs. McGrath is a strategic and entrepreneurial leader with deep, cross-sector experience helping individuals and organizations, ranging from startups to the Fortune 500, to catalyze ideas into action. Mrs. McGrath has worked with trailblazers and pioneers in the fields of social entrepreneurship, academia, philanthropy and impact investing over the past two decades.

Alan Miller is a lawyer and internationally recognized authority on climate finance and policy who worked for 20 years at the International Finance Corporation (IFC), the private sector arm of the World Bank Group, and at the World Bank, where his responsibilities included representing the Global Environment Facility and WBG in international forums focused on climate change and green growth. He has taught and written extensively on environmental and environmental law issues.

Robert (Bob) Pojasek, Ph.D. has been teaching risk management, sustainability, process improvement and management systems at the Master’s degree level and through open enrolment arrangements at Harvard University, USA, and Tufts University, USA, since 1987. Dr. Pojasek was presented the Petra T. Shattuck Excellence in Teaching Award at Harvard University, USA.

Ingmar Schumacher is Professor of Environmental Economics at IPAG Business School in Paris, France. His research focuses on environmental economics, with particular emphasis on climate change, migration, and endogenous preferences. Prior to his position at IPAG Business School, he worked as an economist for the Central Bank of Luxembourg and held a post-doctoral position at Ecole Polytechnique in Paris, France. He is the Managing Editor of Environmental & Resource Economics.

Jér?me Tagger is a Partner at WhiteLabel Impact, USA and the CEO of Preventable Surprises, USA a think tank sparking difficult conversations about responsible finance. He was a founding COO of the Principles for Responsible Investment, UK, an executive at the Global Impact Investing Network, USA, Head of Research at Eurosif, UK and Chief Revenue Officer at ImpactAlpha, USA.

Tensie Whelan is the Director of NYU Stern Center for Sustainable Business and a Clinical Professor for Business and Society at New York University, USA, where she brings her 25 years of experience working on local, national, and international environmental and sustainability issues to engage businesses in proactive and innovative mainstreaming of sustainability. Mrs. Whelan was awarded the NYU Stern Faculty Excellence award in 2020.