Sustainable Investing Beating the Market with ESG

This book reviews the latest methods of sustainable investing and financial profit making and describes how ESG (Environmental, Social, Governance) analysis can identify future business opportunities and manage risk to achieve abnormal returns.

“Sustainable Investing offers practical advice to market participants, with a variety of examples from investors and corporates who have dealt with the challenge of integrating Environmental, Social and Governance (ESG) aspects into their operations. The authors anchor these case studies in emerging research from academic finance, while providing readers with a critical lens to evaluate the strengths and weaknesses of what may sometimes appear to be contradictory conclusions. Sustainable Investing is an excellent resource for international investors, advisors, and corporates.”

—Annie Bersagel, Portfolio Manager – ESG, Folketrygdfondet, Government Pension Fund Norway

“A must-read to understand the tectonic shift of sustainable finance and how to be a part of it– through detailed case-studies and first-hand practitioners’ input, this book takes on the challenge of making sustainable investments clear and actionable.”

—Carole Crozat, CFA, Head of Thematic Research for Sustainable Investments, BlackRock

Most of what is described as sustainability investing today is very far from the mark. If we are to build a truly regenerative economy, across all dimensions of value creation, we must transform not just financial markets but economics itself. This timely book by Hanna Silvola and Tiina Landau is a welcome guide to an increasingly complex landscape of risk and opportunity.”

—John Elkington, Author of Green Swans: The Coming Boom in Regenerative Capitalism

“Pension investors want to make sure that their pension funds are able to provide their participants with a good pension. At the same time, they also want to contribute to a sustainable world with good quality of life, for current and future generations. Sustainable Investing provides a comprehensive overview with many practical cases that inspire to take action.”

—Els Knoope, Senior Portfolio Manager, APG Asset Management

"This book provides excellent advice for beginners in sustainable investing and also for those more advanced. The concrete examples are helpful and not easy to come by yet in the public space. Recommended reading for investors and the interested public alike.”

—Eila Kreivi, Director, Head of Capital Markets, European Investment Bank

This book reviews the latest methods of sustainable investing and financial profit making and describes how ESG (Environmental, Social, Governance) analysis can identify future business opportunities and manage risk to achieve abnormal returns. Megatrends such as climate change, sustainable development and digitalisation increase uncertainty and information asymmetry and have an impact on the future returns on investments. From a profit perspective, it is largely about how ESG factors affect the long-term value added by companies and the valuation of companies in the financial markets. Although sustainability provides an opportunity for abnormal returns, this phenomenon must be considered in a critical light. The book describes the risks and limitations associated with the accountability and availability of ESG data and tools.

This book provides both academic findings and practical models for assessing the sustainability of investees and introduces practical tools and methods to make ESG analysis practice. It focuses on the ESG analysis of equity investments and fund investments in institutional investment organizations and provides a handbook for all investment analysts who are involved with investment decisions. Readers will benefit from understanding the methods, opportunities and challenges that professionals use in their ESG analysis with cases, interviews and practical tools for both institutional and private investors.

Tiina Landau is an internationally recognized sustainability expert and Certified European Financial Analyst (CEFA). She currently works as Sustainability Manager at Neste Corporation, embedding sustainability considerations into new business models and supply chains. Previously she served as Senior Responsible Investment Officer at Ilmarinen, a pension investor with 50 billion euros in investment assets and was recognized as a top 50 contributor globally in responsible investments among asset owners in the IRRI survey 2017, voted by professionals in 43 countries. In addition, she has previously worked on sustainable investing at OP Financial Group (80 billion euros in investment assets) and in management consulting at KPMG. She has extensive experience as a speaker in media and seminars and also writes a column in the Finnish financial newspaper Kauppalehti.

Hanna Silvola is an Associate Professor of Accounting at Hanken School of Economics, Finland. Her research interests are in sustainable investing and in measuring, reporting and assuring corporate sustainability information in strategic decision-making. She has international experience from the London School of Economics, UK, University of Stanford, USA, Monash University, Australia and the University of New South Wales, Australia. Dr. Silvola has published on a range of topics in accounting in journals such as Accounting, Organizations and Society; Management Accounting Research; Journal of Small Business Management and Journal of Management Accounting Review. She has comprehensive experience as a speaker in media and executive education.