Episode 10 explores the role of investors – who secure public funds, underpin multinational companies and enable startups to connect and scale – in sustainable production and consumption. As Nandini Sukumar reminds us, the investor is essential not just for allocating capital, but also for the functioning and performance of the financial and capital markets.
Now more than ever, though, investors are being expected to balance monetary returns with climate change mitigation and social upliftment. Put metaphorically, it is like replacing the tracks and engine after the train has left the station. We uncover what that feat needs to look like so that investors can take a holistic, longer-term, impact-based approach, while still factoring in fiduciary duties.
We enquire as to how investors are already modifying their behaviour and actions as environmental, social and governance (ESG) metrics become too fashionable to ignore. Tatjana Greil Castro notes that asset managers and institutional investors are explaining where and how they are placing their funds. With increasing transparency and coordination between regulation and taxonomy, they are expected to focus on this even more.
For startups, according to Evan Patronik, ESG is innate to their raison d’être. However, while investors should enable the growth of startups, their needs can be misaligned. In his view, “the model needs to change”. One underlying cause is short-termism. As Evan says, “When you’re decried for having a down quarter or a down year, because you put less emphasis on revenue and profitability and more on impact or the way you give back, there’s no reward for being a good person in this space.” Lower returns means less money to spend, so less consumption and different headlines.
Another challenge for investors is consensus, a common framework and convergence of standards. Nandini shares the work the World Federation of Exchanges (WFE) has been doing for several years to tackle this, including the WFE Sustainability Principles.
Finally, there is pressure on companies to become more inclusive, but what about the often hidden face of the investor? We close out the episode looking at the future, and Evan and Tatjana remind us that increasing diversity in the investor community will enable capital to be distributed more equitably. Products must also continue evolving. There might just be light at the end of the tunnel.
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Head of Venture Selection, Unreasonable Group
Evan is the Director of Venture Selection for Unreasonable Group and leads the investment committees for two of Unreasonable’s largest initiatives – Unreasonable Impact and Unreasonable Future. Evan’s expertise is in sourcing, identifying and engaging for-profit ventures from around the world who are solving some of the world’s most challenging social and environmental issues. Through his relationships with advisory firms, funders, corporates, and ventures, Evan looks to build a stronger ecosystem for leveraging market forces to create lasting impact while providing significant financial returns. As a problem solver and co-founder of a number of companies (some without success), Evan is accustomed to putting out fires and applying lessons learned in his career to guide, mentor and support entrepreneurs.
CEO, The World Federation of Exchanges
Nandini Sukumar is the Chief Executive Officer of the World Federation of Exchanges, the global association for exchanges and CCPs. Ms. Sukumar is Vice Chair of IOSCO’s Affiliate Members Consultative Committee and Chair of the AMCC’s DLT Workstream. Ms. Sukumar has been CEO of the WFE since March 2015. Prior to this, she served as Acting Chief Executive Officer from November 2014, having been recruited by the WFE Board as Chief Administrative Officer in May 2014 to run the Federation on a daily basis and work with its global network of members as a proponent of the benefits of fair, orderly, public markets. Ms. Sukumar came to the WFE after a 14-year career at Bloomberg where she created, grew and ran their coverage of market structure, exchanges and UK regulation.
TATJANA GREIL CASTRO
Co-Head of Public Markets, Muzinich & Co.
In addition to managing the Muzinich Global Short Duration Investment Grade strategy, Tatjana also manages the Muzinich Enhancedyield Short-Term strategy and the Muzinich Sustainable Credit strategy. She is a founding member of the European Leveraged Finance Association, a member of the ECB’s Bond Market Contact Group, a regular participant at the UBS Investor Forum and a frequent speaker at investment conferences. In 2019, Tatjana was appointed as an advisor to the Dalai Lama Centre for Compassion. In 2018, Tatjana won Fund Manager of the Year (small to medium firms) at Investment Week’s Women in Investment Awards and in 2019 she was one of the best 30 female fund managers globally as ranked by Citywire. She has a Ph.D. from the London School of Economics, a Masters from the Kiel Institute of World Economics in Germany, and an M.Sc/B.S. in Economics from the University of Vienna.