#23: Building on Last Week’s Insights: Key Questions Sustainable Investment Leaders Need to Ask and Answer
Last week, we raised critical questions about your sustainability and responsible investing strategies. This week, let's dig deeper into why these questions are vital and how answering them can transform your approach to sustainability.
Key Questions for Defining Your Sustainable Investment Strategy
(1) How do you define sustainable society, the overall means to achieve it, and the role of business in driving this transition?
Importance: A whole system vision and approach is essential for sustainability success. It ensures that companies are addressing the most important systemic changes and maximizing positive impacts for the business, its stakeholders and society.
Considerations: Reflect on how a clearer understanding of sustainability overall impacts your company’s strategy? What positive changes do you aim to contribute to? How can your business operations and investments drive these changes?
(2) What is the role of investing?
Importance: Systemic changes are essential for sustainability. The financial and corporate sectors have the power to collaboratively drive it. This makes investing (and corporate system change strategies) very powerful drivers of system change and societal benefits.
Considerations: Assess how your investments can support sustainable development. Are you funding projects and companies that drive systemic change? How can you substantially increase positive social and environmental impacts while providing superior investment returns?
(3) Why is addressing the root causes of global challenges important?
Importance: Current sustainability approaches do not resolve global challenges because they do not adequately address systemic root causes. Systemic changes are essential for resolving challenges and protecting investment portfolios as well as business and society overall.
Considerations: Identify the systemic issues contributing to global challenges. How can your investment strategies address these root causes? What short-term and long-term benefits can arise from this approach for both society and your company?
(4) What are the company’s unique strengths and advantages in this area? Where is room for improvement?
Importance: Leveraging your company’s unique strengths maximizes impact and competitive advantage. Identifying areas for improvement helps in creating a comprehensive and effective sustainability strategy.
Considerations: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) related to your sustainability efforts. What resources, expertise, and networks can you utilize? What gaps need to be filled to enhance your impact?
(5) What would success look like now and in the future?
Importance: Defining success provides clear goals and metrics to track progress. It ensures that efforts are aligned with desired outcomes.
Considerations: Establish short-term and long-term goals for your sustainability initiatives. What milestones indicate progress? How will you measure and report success to stakeholders?
Why These Questions Matter
Addressing these questions is crucial for developing a robust sustainability strategy that not only meets current standards but also drives long-term, systemic change. By exploring these areas, your company can:
Achieve True Sustainability Leadership: Stand out as a pioneer in sustainable investing by addressing root causes and systemic issues.
Enhance Investment Returns and Risk Management: Sustainable strategies that consider long-term impacts tend to be more resilient and offer better risk-adjusted returns.
Attract New Investments: SCI is the first responsible investment strategy with the potential to achieve the SDGs. This can attract substantial new investments.
How We Work
At SCI, we guide financial clients through this transformative journey by:
Providing Expertise and Support: From initial assessments to strategy development and implementation, we offer the expertise, models, and training needed.
Customizing Strategies: We tailor our approach based on your resources, goals, and unique context.
Integrating System Change: We help you to integrate systemic change into your sustainability and responsible investing strategies, ensuring a comprehensive approach.
Ready to redefine your sustainability strategy and take the lead?
Schedule a free 30-minute strategy call to explore how we can support your journey.