Understanding “Sustainable Finance 3.0”

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Here’s a note from Emilie Kehl:

As ESG continues to grow in popularity and develop into a dominant investment theme, there is an increased focus and hot debate on whether and how ESG integration is having a meaningful impact and contributing to progress on environmental and social challenges.

I am stoked to share the release of a new report developed in collaboration with High Meadows Institute’s Chris Pinney, Abby McGuckin, and other brilliant minds which covers exactly this.

In this report, we take a look at the drivers and challenges in moving to impact-oriented financial markets (which we refer to as Sustainable Finance 3.0). Our review of some of the world’s largest asset managers finds that the integration of systemic impact factors into mainstream investment management is (unsurprisingly) currently still in its early days. We also find that, as with ESG, standards for defining and disclosing data on non-material societal impacts are complicated by the lack of widely agreed-upon impact measurement frameworks and disclosure standards. At the same time, we see signs that these challenges are beginning to be addressed by both markets and public policy.