Cary S. Krosinsky

This paper assesses the State of Sustainable Finance in the US with a core focus on active sustainable investing and how its financial performance contrasts with anti-ESG legislation

This paper aims to advance the debate on sustainable investing ratings in two ways. First, it delineates principles that can inform the development of sustainable investing ratings that aim to support sustainable development. Second, it introduces the Robeco SDG score as a novel metric of sustainability performance that corresponds to these principles. This SDG score is made available for free in order to enable research, spark discussion, and further the state of sustainable investing ratings.

The Sustainable Finance Institute has taken its work on impact with The Global Impact Investing Network (GIIN) one step further, adding the following case study to the academic literature on Africa, healthcare and positive impact, showing how improved access to critical equipment in frontier and emerging markets helps deliver more positive impact, based on the following findings:


1) The potential to improve access to critical equipment fivefold is clear

2) Equipment efficiency… Show more

The Sustainable Finance Institute has taken its work on impact with The Global Impact Investing Network (GIIN) one step further, adding the following case study to the academic literature on Africa, healthcare and positive impact, showing how improved access to critical equipment in frontier and emerging markets helps deliver more positive impact, based on the following findings:


1) The potential to improve access to critical equipment fivefold is clear

2) Equipment efficiency improvement can be increased by 300%+

3) Delivered productivity returns of $31.30 per $1 invested in healthcare are also achievable, making both impact and investment success possible Show less

Although many US states such as Florida and Texas have been considering or passing legislation attempting to prevent their pension systems from considering environmental, social, and corporate governance (ESG) issues, active sustainable investors have been financially outperforming over the long-term and earning higher returns for their clients while managing tens of billions more dollars on the back of such financial success.

The implication is that sustainable investing could and… Show more

Although many US states such as Florida and Texas have been considering or passing legislation attempting to prevent their pension systems from considering environmental, social, and corporate governance (ESG) issues, active sustainable investors have been financially outperforming over the long-term and earning higher returns for their clients while managing tens of billions more dollars on the back of such financial success.

The implication is that sustainable investing could and should be the future for the majority of all active investment approaches across all asset classes, given the insufficiency of ESG data and ratings, which the more successful investors, as analyzed, do not rely upon, and that much as is the case with PE and VC, sustainable investing across all asset classes, requires choosing the best managers who utilize appropriate expertise. Show less

How financial institutions can accelerate the transition to an environmentally sustainable economy

Solving climate change is the imperative of our times
and additional areas of social and environmental concern
remain unsolved, such as are well outlined by the UN’s
Sustainable Development Goals (SDGs).

We strongly feel more cooperation between China and
Japan is worth exploring as an important potential pathway
for encouraging and developing badly needed positive
outcomes against such societal goals.

How to solve the SDGs in a city using finance, Case Study - New York City, investor case studies included from Goldman Sachs, Equilibrium Capital, Generate Capital, Encourage Capital across affordable housing, renewable energy, food, health and waste, more work identified as needed on mobility and resilience.

Opening chapter of our 7th book, Modern China.

Asia is something like half of the world’s economy, home to over two thirds of the world’s largest cities and China is the dominant player in the region. The Financial Times recently declared without hesitation that “the Asian Century is set to begin.” Few doubts remain that this will come to pass, with China likely to become only more influential on the back of its recent economic rise over the past forty years. The implications of this… Show more

Opening chapter of our 7th book, Modern China.

Asia is something like half of the world’s economy, home to over two thirds of the world’s largest cities and China is the dominant player in the region. The Financial Times recently declared without hesitation that “the Asian Century is set to begin.” Few doubts remain that this will come to pass, with China likely to become only more influential on the back of its recent economic rise over the past forty years. The implications of this present-day balance between East and West may not sink in quickly and is often viewed in a competitive light.
It would be easy then for a tremendous opportunity to be lost, the possibility for renewed cooperation and the potential power for combined inspiration and innovation to help solve the world’s most significant environmental, social and economic challenges. Show less

Modern China provides readers with an on-the-ground perspective of what’s truly happening in China today on the back of its recent economic rise, its desire to solve environmental challenges and the new positive dynamic being created by China’s need for foreign capital.

China has recaptured its role as a leader in innovation, arguing that the current hostile relationship hinders global progress on issues from climate change and inequality, and on air pollution to food integrity and… Show more

Modern China provides readers with an on-the-ground perspective of what’s truly happening in China today on the back of its recent economic rise, its desire to solve environmental challenges and the new positive dynamic being created by China’s need for foreign capital.

China has recaptured its role as a leader in innovation, arguing that the current hostile relationship hinders global progress on issues from climate change and inequality, and on air pollution to food integrity and water security, pushing back on confrontational approaches and attempts to clarify misperceptions about contemporary China.

China’s recent rise includes becoming a global leader on green policy and green finance, as it is increasingly leading the way towards modernization through innovation strategies focused on infrastructure, education, healthcare and aspects of clean energy technology, leading to opportunities across private equity, venture capital and green bonds. This creates an exciting opportunity for positive change, with environmental challenges becoming more salient to its own population, adding pressure on the government to provide solutions. China changes faster than any country in the world, creating an opportunity for meaningful, ongoing, positive transitions.

Modern China, produced along with the Sustainable Finance Institute and leading students from Brown University is a call for more cooperation, making a clear, cogent case for collaboration in the face of current confrontational approaches. At the same time, dire environmental and social circumstances require an all-hands-on-deck approach. This book provides specific examples of what’s working and what’s needed to compete and thrive in this new paradigm through trusted relationships placed front and center for the future of economies and the betterment of global society. Show less

Recommendations to the NY State Comptroller, included achieving 100% Sustainable Assets by 2030, applying minimum standards to ownership and on relationships with partner organizations, as well as allocations to climate solutions, education and incentives, and ensuring a well resourced team performs such work in perpetuity for the maximum benefit of all beneficiaries.

These recommendations informed the subsequently released Climate Action Plan of the New York State Common Retirement Fund… Show more

Recommendations to the NY State Comptroller, included achieving 100% Sustainable Assets by 2030, applying minimum standards to ownership and on relationships with partner organizations, as well as allocations to climate solutions, education and incentives, and ensuring a well resourced team performs such work in perpetuity for the maximum benefit of all beneficiaries.

These recommendations informed the subsequently released Climate Action Plan of the New York State Common Retirement Fund during spring 2019, part of what have become globally leading commitments to short term, rapid, low carbon transition, in this instance, the State of New York. Show less

The Anthropocene era is characterized by a pronounced negative impact of human and social activities on natural ecosystems. To the extent finance, economics and management underlie human social activities, we need to reassess these fields and their role in achieving global sustainability. This article briefly presents the scientific evidence on accelerating impacts of human activities on nature, which have resulted in breach of planetary boundaries and onset of global climate change. It offers… Show more

The Anthropocene era is characterized by a pronounced negative impact of human and social activities on natural ecosystems. To the extent finance, economics and management underlie human social activities, we need to reassess these fields and their role in achieving global sustainability. This article briefly presents the scientific evidence on accelerating impacts of human activities on nature, which have resulted in breach of planetary boundaries and onset of global climate change. It offers some potential leverage points for change toward sustainability stewardship by highlighting the important role of finance and economics in addressing climate change. We examine the role of financial stakeholders in addressing planetary boundaries and offer a modified stakeholder theory, from which we propose future directions for finance in the Anthropocene. Show less

Contributor to the latest progress report of The City of London‘s Green Finance Initiative, in partnership with China’s Green Finance Committee, on the State of Sustainable Finance alongisde green finance guidelines for the Belt and Road Initiative (BRI).

Building on existing responsible investment initiatives and published in seven languages, the Green Investment Principles aim to incorporate low-carbon and sustainable development into the BRI by encouraging firms involved and invested… Show more

Contributor to the latest progress report of The City of London‘s Green Finance Initiative, in partnership with China’s Green Finance Committee, on the State of Sustainable Finance alongisde green finance guidelines for the Belt and Road Initiative (BRI).

Building on existing responsible investment initiatives and published in seven languages, the Green Investment Principles aim to incorporate low-carbon and sustainable development into the BRI by encouraging firms involved and invested in projects to sign up to a voluntary code of practice. Show less

To solve societal challenges, we need strategies that work, that can be scaled for purpose, and—importantly—that are financially viable. Here’s how to get there.

Following the Brexit and Trump election cycles, consistent, long-term policy solutions to environmental and other societal challenges are becoming increasingly difficult to achieve. Stepping into this breach is a clear opportunity for innovation by public and privately held companies, as well as the increasingly significant role of investment and consumption.

Sustainable Innovation and Impact provides a roadmap of the many critical pathways of positive change emerging to achieve modern… Show more

Following the Brexit and Trump election cycles, consistent, long-term policy solutions to environmental and other societal challenges are becoming increasingly difficult to achieve. Stepping into this breach is a clear opportunity for innovation by public and privately held companies, as well as the increasingly significant role of investment and consumption.

Sustainable Innovation and Impact provides a roadmap of the many critical pathways of positive change emerging to achieve modern day societal success, including rapidly evolving corporate and investment innovation and impact strategy considerations. Exploring innovation around the future of energy, electricity and related technologies, as well as transportation and buildings efficiency, the authors provide ideas framed around the circular economy, operational and supply chain strategies and the global economy.

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Morningstar adding mutual fund sustainability ratings were a welcome addition to the broad landscape of sustainable and impact investing when introduced in early 2016.

By adding an assessment of 1–5 Globes to their fund pages (shortly to be featured on Yahoo Finance as well), the general public gains a first, simple perspective on ESG and investing. But other than their ability to attract attention to ESG data on companies, Morningstar’s Globe system and similar ratings aren’t… Show more

Morningstar adding mutual fund sustainability ratings were a welcome addition to the broad landscape of sustainable and impact investing when introduced in early 2016.

By adding an assessment of 1–5 Globes to their fund pages (shortly to be featured on Yahoo Finance as well), the general public gains a first, simple perspective on ESG and investing. But other than their ability to attract attention to ESG data on companies, Morningstar’s Globe system and similar ratings aren’t particularly useful for investors.

By taking a ‘holdings-based approach’ — a weighted average of portfolio companies’ ESG scores — fund sustainability ratings such as those calculated by Morningstar don’t tell what you need to know if you want to have impact with your investments. No credit goes to investors on their efforts on shareholder engagement and public advocacy or on their sophistication, culture and investment strategy. Show less

Simplified Chinese version of our December 2016 book, authorized for translation by the People's Bank of China into the official Green Finance Series

(as originally published)

As we have seen in this issue of the JEI, which I was thrilled to help edit and organize this symposium, existing ESG Data has strengths and weaknesses.

I was thrilled to see the 2016 launch of the Morningstar Globe system of mutual funds ranked for the first time on their ESG performance. But when Parnassus Endeavor only received 3 of 5 Globes on launch – and was 3 Globes as of this writing – flaws in simple applications of ESG data were exposed:… Show more

(as originally published)

As we have seen in this issue of the JEI, which I was thrilled to help edit and organize this symposium, existing ESG Data has strengths and weaknesses.

I was thrilled to see the 2016 launch of the Morningstar Globe system of mutual funds ranked for the first time on their ESG performance. But when Parnassus Endeavor only received 3 of 5 Globes on launch – and was 3 Globes as of this writing – flaws in simple applications of ESG data were exposed: Parnassus Endeavor has demonstrated significant financial outperformance using a value lens.

In some ways, one might suggest we’ve had the entire ESG data story exactly backwards.

Instead of building ESG databases and then trying to figure out how to use them, let’s instead:

1) figure out what outcomes we seek, then
2) pinpoint the strategies we need to deploy, and finally,
3) determine what data we need to see how we are doing at the system and strategy level.

This way, ESG data can be useful. I think the most important word I can offer is just that – useful.

Metrics are either useful, or they aren’t. If thought of as information that tells us what else we might need to do differently, then data couldn’t be more important.

Included in this issue are a broad range of articles and cases, from using satellites to deriving better ESG data and investing accordingly, to using machine learning to develop more robust ESG analysis.

Other papers cover alpha strategies, green bonds and financial performance, and a number of other specific corporate and investor use case perspectives.

The race is on to develop the best investment processes. In this age of increasing transparency, investors need to be thorough, and understand where data, specifically, helps them.

With corporations continuing to see a “wild west” of ESG data requests, and no sign that policymakers have straightened this situation out, we hope to start an important conversation with this issue of the journal. Show less

Belated Simplified Chinese translation of our 2008 first book on sustainable investing.

A seminal shift has taken place in the world of investing. A clear and overarching reality has emerged which must be solved: financial considerations must factor in sustainability considerations for ongoing societal success, while sustainability issues equally need to be driven by a business case. As a result, investment practices are evolving, especially towards more positive philosophies and frameworks.

Sustainable Investing brings the reader up to speed since our previous books on… Show more

A seminal shift has taken place in the world of investing. A clear and overarching reality has emerged which must be solved: financial considerations must factor in sustainability considerations for ongoing societal success, while sustainability issues equally need to be driven by a business case. As a result, investment practices are evolving, especially towards more positive philosophies and frameworks.

Sustainable Investing brings the reader up to speed since our previous books on trends playing out in each region and asset class, drawing on contributions from leading practitioners across the globe. Implications abound for financial professionals and other interested investors, as well as corporations seeking to understand future investment trends that will affect their shareholders’ thinking. Policymakers and other stakeholders also need to be aware of what is happening in order to understand how they can be most effective at helping implement and enable the changes arguably now required for economic and financial success.

Sustainable Investing represents an essential overview of sustainable investment practices that will be a valuable resource for students and scholars of sustainable banking and finance, as well as professionals and policymakers with an interest in this fast-moving field. Show less

While US financial institutions have at times enjoyed a reputation of being something of a laggard on sustainability issues versus their European counterparts, significant changes and innovations are under way which are beginning to drive meaningful change.

The purpose of this paper is to begin the process of clarifying global asset value especially as may be affected by the sustainability (or lack thereof) of financial systems, and not just that which is represented by institutional assets under management. This paper, therefore, will answer this question of what is the actual total value of all global asset classes individually and in aggregate, towards helping inform money flows as they relate to this overall global stock, and how do they or… Show more

The purpose of this paper is to begin the process of clarifying global asset value especially as may be affected by the sustainability (or lack thereof) of financial systems, and not just that which is represented by institutional assets under management. This paper, therefore, will answer this question of what is the actual total value of all global asset classes individually and in aggregate, towards helping inform money flows as they relate to this overall global stock, and how do they or can they influence total value, as well as how should these stocks and flows shift to enable the financial system to become truly sustainable and how to measure for that. Show less

Framework for Action on Climate Change with Case Studies Across Asset Class

The UN-backed Principles for Responsible Investment initiative has led to around a third of the world’s financial assets being managed with a commitment to invest in a way that considers environmental, social or governance (ESG) criteria. The responsible investment trend has increased dramatically since the global financial crisis yet understanding of this field remains at an early stage.

This handbook provides an atlas of current practice in the field of responsible investment. With… Show more

The UN-backed Principles for Responsible Investment initiative has led to around a third of the world’s financial assets being managed with a commitment to invest in a way that considers environmental, social or governance (ESG) criteria. The responsible investment trend has increased dramatically since the global financial crisis yet understanding of this field remains at an early stage.

This handbook provides an atlas of current practice in the field of responsible investment. With a large global team of expert contributors, the book explores the impact of responsible investment on key financial actors ranging from mainstream asset managers to religious organizations.

Offering students and researchers a comprehensive introduction to current scholarship and international structures in the expanding discipline of responsible investment, this handbook is vital reading across the fields of finance, economics and accounting.

Our chapter covers Removing Distractions on the Road to ESG Integration Show less

Background paper on the complications of Reducing Emissions through Investment

Why most techniques overlook the largest opportunities

Annual global carbon emissions continue to increase, and scientists are increasingly convinced we are approaching limits to how much more carbon we can burn as a society and stay within a safe degree of the future effects from what is expected to be a changing climate. Institutional Investors at the same time now own a majority of public companies, mostly in a “business as usual” capacity, in effect locking in the status quo… Show more

Why most techniques overlook the largest opportunities

Annual global carbon emissions continue to increase, and scientists are increasingly convinced we are approaching limits to how much more carbon we can burn as a society and stay within a safe degree of the future effects from what is expected to be a changing climate. Institutional Investors at the same time now own a majority of public companies, mostly in a “business as usual” capacity, in effect locking in the status quo. Measuring and reducing the carbon footprints of equity portfolios and other assets owned emerges as a potentially important effort to encourage businesses to reduce their own carbon footprints through a resulting positive dynamic in a race for invested capital. Such carbon footprinting however can only achieve maximum effect through an optimization of performed techniques combined with an understanding of the strengths and weaknesses of the data. It is essential to pinpoint and not overlook the largest opportunities for decarbonization, which most current techniques do not accomplish. Show less

The nature of Value is in the process of changing as policymakers, corporations and investors grapple with how to move markets beyond short-term thinking, while social and environmental trends continue to accelerate.

A company’s externalities have, historically, had little or no impact on its cash flows or risk profile. For this reason, externalities have been largely excluded from the measurement of corporate value.

However, as economic, social and environmental megaforces… Show more

The nature of Value is in the process of changing as policymakers, corporations and investors grapple with how to move markets beyond short-term thinking, while social and environmental trends continue to accelerate.

A company’s externalities have, historically, had little or no impact on its cash flows or risk profile. For this reason, externalities have been largely excluded from the measurement of corporate value.

However, as economic, social and environmental megaforces transform the operating landscape for business, the disconnect between corporate and societal value creation is disappearing. New regulations, growing stakeholder influence and changing market dynamics are driving the internalization of business externalities at an increasing rate. Externalities are now part of every company’s value creation story.

A New Vision of Value is the follow-up to KPMG International’s 2012 report
Expect the Unexpected: Building business value in a changing world.

Was a pleasure co-authoring this report with the team at KPMG. More on this just released report here: www.kpmg.com/truevalue Show less

Climate change made global headlines on Sunday, 21 September 2014. People across the world took to the streets in the People’s Climate March, reportedly the largest climate change demonstration ever, to demand action. With its effects being increasingly felt and feared globally, climate change is relevant not just to the natural world but also to investing. There is one strand of investing in which it is among the most important issues, if not the single most important issue: sustainable… Show more

Climate change made global headlines on Sunday, 21 September 2014. People across the world took to the streets in the People’s Climate March, reportedly the largest climate change demonstration ever, to demand action. With its effects being increasingly felt and feared globally, climate change is relevant not just to the natural world but also to investing. There is one strand of investing in which it is among the most important issues, if not the single most important issue: sustainable investing.

Yet despite the persistent news coverage of climate change and the growing understanding of the various environmental, social, and governance (ESG) issues in investing, many would agree that there is still a lack of clarity about sustainable investing. Here are five carefully curated videos on sustainable investing that stand out for their focus, the strength of their content, and the effectiveness of their delivery. Show less

Why sustainability embedded in investing needs to triumph longer term over separation of sustainable investing as other.

The Value Driver Model is a tool that utilizes key business metrics to help companies assess and communicate the financial impact of their sustainability strategies. This paper provides a contextual basis for the Model and illustrates how companies can begin to calculate Value Driver metrics. It is part of a larger toolkit, which includes case studies and can be found through the link provided.

A short eBook on Sustainable Investing, a positive investment discipline that specifically considers future social and environmental trends in financial decision making, in order to provide the best risk-adjusted and opportunity-directed returns for investors.

Towards a systemic understanding of global institutional ownership of public equity and across all asset classes. Implications for sustainability and sustainable financial markets.

Why Apple, often roundly criticized by some SRI investors and ESG data providers, has actually been a sustainability opportunity all along.

Edited by Cary Krosinsky with Nick Robins, and Stephen Viederman, Evolutions brings together thought leaders from across the Sustainable Investing field, while discussing the philosophy surrounding sustainable investing as well as strategies and future considerations.

Arabic translation from Cairo-based Arab Nile Group of our first book on sustainable investing from 2008.

Also translated into Complex Chinese by Taiwan-based Heliopolis.

With conventional investors now scrambling to factor in issues such as climate change, this book captures a turning point in the evolution of global finance.

Sustainable Investing is already outperforming the mainstream, and concerned investors need to know how best to position themselves for potentially radical market change.