MiB: Sustainable Investing is Risk Management

Investors’ personal values are fine when selecting stocks, but those values can also operate risk measurement and evaluation strategy. So says Brian Deese, Global head of Sustainable Investing for Blackrock. The firm manages over $7 trillion in assets; Deese helps the firm use Environmental, Social, and Governance (ESG) factors as a risk measure across all of their holdings.

Over the past few years, ESG has also been a source of Alpha, generating above market returns for investors Whether this is driven by a heavier  weighting in technology stocks among ESG funds or is a function of the positives of ESG is (arguably) unknown.

We discuss how Solar and Wind have become the fast growing sustainable energy source in the USA. Renewables (including Hydro and Nuclear) now account for 40% of the US energy production. The biggest changes coming in energy include efficiency improvements, decarbonization, and electrifying transportation.

Deese worked in the White House as President Obama’s senior advisor for climate and energy policy. He helped to negotiate the Paris Climate Accord, and was one of the key architects of the rescue plans for Chrysler and GM.

His favorite books can be seen here; A transcript of our conversation is available here.

You can stream and download our full conversation, including the podcast extras, on Apple iTunesOvercastSpotifyGoogleBloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.

Next week, we speak with Danielle DiMartino Booth, founder of Quill Intelligence, a research and analytics firm, and author of Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America.

 

 

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