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Thought leadership |
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Inflection Points Inflection Points is IPCM’s regular commentary on a variety of cutting-edge sustainability trends and issues which we believe to be germane and of interest to long-term investors. Most articles are written by IPCM team members, but we are also pleased to publish contributed guest pieces. Reader feedback is always welcome. Write to us at points@inflectionpointcm.com Download the latest issue in PDF or visit the Inflection Points overview page to see all issues |
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Innovation is in urgent need of revival The good folks from Occupy Wall Street/St Paul’s/the City have rightly drawn the world’s attention to many of the worst ills of contemporary capitalism, but they have not yet mentioned one which we consider to be equally pernicious: the financial system’s almost pathological abhorrence of innovation. All over the world, writes Matthew Kiernan in the Financial Times (5 December 2011), asset owners and their investment managers are failing to demonstrate the level of innovative thinking – and action – commensurate with the gravity of the current global economic, environmental, and social conditions. |
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We’ve got RI, ESG and CSR: now it’s time for Strategically Aware Investing! Everyone seems to be clamouring for more “mainstreaming” but, says Matthew Kiernan, the terminology is holding us back. The enormous confusion and conflation among acronyms (ESG, RI, SRI, CSR, SI) has resulted in their stigmatization by mainstream asset owners, advisors and managers. Words matter, and if sustainability concerns could be shorn of their historical, ideological and emotional baggage we’d all be a good deal further ahead, and so would global environmental and social conditions — not to mention investors’ risk-adjusted returns. Read the article An extended version of the article is now available as a PDF download. |
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Sustainable Alpha: The emerging markets opportunity Emerging markets have attracted a great deal of interest from outside investors over the past 12 months. At Inflection Point Capital Management, we too are enormously interested in global emerging markets (GEMs). That is where the global battle for environmental and social sustainability will ultimately be won or lost. On the face of it, the GEMs would seem to be a compelling destination for investors. We would, however, caution investors against getting carried away with an uncritical “GEMs mania” and a headlong rush into emerging markets. Our 20-page study, written just prior to the recent flow of substantial investment capital out of emerging markets when those markets were riding high, presents readers with a balanced picture of emerging markets viewed through the prism of a “sustainable investor”. It looks like we were either prescient or lucky; in either case, our fundamental theses remain: a) emerging markets are of critical importance to sustainability-oriented investors; and b) the benefits of in-depth, on-the-ground research cannot be overstated. There are definitely outsized returns to be had, but only after careful research and due diligence. As elsewhere, there are no free lunches. |
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Cancún’s “brontosaurus in the living room” The latest round of international climate negotiations taking place this week in Cancún, Mexico is the 16th such gabfest designed to breathe life into the Kyoto Protocol. One does not need to be an unreconstructed cynic, writes Matthew Kiernan in the Financial Times (5 December 2010), to ask how much real progress has been made during those 16 meetings. |
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A broader view of environmental investing Inflection Point CEO Matthew Kiernan's article published in Environmental Finance (September 2010) argues that tokenistic investments in clean-tech funds are not enough: pension funds should urgently address environmental risk and opportunities across their entire portfolios. Get the article in PDF or, for Environmental Finance subscribers, read the article online |
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Climate change – setting the record straight for investors Investors and analysts who bought into the idea that climate change would have a major impact on their investment strategies could be wondering if they, and the climate scientists, got their forecasts entirely wrong. Our view, however, remains unchanged: the only real questions remaining are the timing, the effects and the full magnitude of the impact of climate change. Read the article |
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The “Base of the Pyramid” — Gold Mine or Chimera? Some four billion people in this world are currently living on $2 or less per day. This group has been termed the “base of the pyramid” (or BOP) by academics and others. But poor people do have considerable purchasing power, contrary to both intuition and popular belief, and are responsible borrowers. We believe that it is high time that BOP issues, until now largely the concern and preserve of NGOs and academics, hit the radar screens of sophisticated, long-term investors. The social, economic, environmental, and investment performance benefits could be substantial. Read the article |
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The Access to Medicine Challenge August 2007 marked the start of the global credit crunch, and the impact of the crisis is still being felt. As investors, though, we would do well to be mindful of another global crisis. Like its financial counterpart, the global health crisis sucks in vast amounts of money and requires the mobilisation of politicians and industry leaders on an international scale. But if the crisis can be fixed, writes Andy White, companies and investors too will reap the rewards from having engaged with this issue. Read the article |
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Après Copenhagen — le déluge ?? The question most frequently asked by the carbon cognoscenti after Copenhagen is: “Is the glass 10% full, or 90% empty ?” Good question, and certainly one that occupied a good deal of our discussion at this year’s version of the Club of Davos meeting in late January, with George Soros and others participating. Indeed, a general aura of gloom permeated the conversation. But perhaps an even better question is this: “Does it really matter?” Read the article |
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Food security, sustainability, and investment In the year 2009, more than a billion people — a record number — did not have enough food for their needs. According to the Food and Agriculture Organization of the United Nations, the situation is only going to get worse, and this is likely to have significant impacts on global security, including civil disruptions and even regional wars. Senior Portfolio Strategist Gordon Noble examines the current food security crisis, the factors that led to it, and its strategic implications for investors. Read article |
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The smart money is going green Matthew Kiernan’s Investing in a Sustainable World offers clear proof that “going green” leads directly to better stock market performance, and that investors and companies who ignore it will be losing money. Revolutionary and backed by undeniable statistics, the book reveals the most powerful global megatrends which are transforming the basis on which companies compete, and offers an approach to sustainability-enhanced investing beneficial to both investors and companies. Available at your favorite bookstore and online retailer, or at www.amanet.org/books/intrnatl.htm |
In the USA, contact 1-800-250-5308 / SpecSlsWeb@amanet.org |
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Explaining “the glacial pace of change in the investment community.” Conventional investment “wisdom” has long held that companies’ performance on environmental and social (ES) issues is either immaterial or even harmful to the financial performance of both companies and their investors, writes Inflection Point CEO Dr Matthew Kiernan in UNEP Finance Initiative’s 0.618 newsletter, October 2009. |
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Digging beneath the surface Financial data are important, but most of a company’s true risk profile and value potential lurk beneath the surface. That’s where we focus, Matthew Kiernan tells Wealth Management magazine. While we use tools that are similar to those of traditional research departments, we focus them on different criteria. In the case of climate change, we have built up our expertise over seven to eight years while mainstream analysts have been looking at the issue for just one or two years. |
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