Sustainable Investing: The Future of Alpha?

Published on
30 July, 2018
Business Strategy, Sentiment, Portfolio Management
25 minutes

Sustainable Investing: The Future of Alpha?

Featuring Aniket Shah

Aniket Shah, the head of sustainable investing at OppenheimerFunds, explains what sustainable investing is and why it matters. He discusses the history of the investment practice, delves into the ways in which it’s being integrated today, and forecasts what its future may hold. He also addresses the investment implications of climate change more specifically. Filmed on July 23, 2018 in New York.

Published on
30 July, 2018
Business Strategy, Sentiment, Portfolio Management
25 minutes


  • JE

    James E.

    4 8 2018 19:51

    1       4

    Trying to mitigate carbon emissions is quite humorous, since it is the most abundant element on the planet. Since the climate on Earth has changed for millions of years what is so different now? All climate change models exclude the influence of the sun, quite a telling omission. However the environment and sustainability are very important areas of concern and need to be researched, areas as the unsustainable grazing in Africa, rotational grazing instead of set stocking, the Amazon should be protected, a major concern that such a sink of magnificence is being decimated as politicians sit idolatry by.
    I can see in the not to distant future a battery that can store enough energy for a household for six months, with solar panels, free electricity for ever. Great for the pocket. Still to be able to crack the problem of producing sustainable energy for ever would be nice, to keep us warm through the next cold period when the sun goes quite for a while instead of pumping out great volumes of solar wind as it is foist present. Maybe we get hit by the asteroid that has earth’s name on it.
    Just my thoughts.
    The elites have the narrative at present, they have the crowds’ ear, it won’t last for ever.

  • DC

    D C.

    3 8 2018 18:09

    2       1

    Thanks to crowd wisdom comments and the free market of up and down votes for saving me 24 minutes I would have never gotten back!

  • DP

    David P.

    2 8 2018 10:31

    3       1

    Sales pitch, too obvious unfortunately. That subject deserve a better coverage, maybe as an interview with someone on the opposite side to confront the views.
    Getting someone with a real science background would also help

  • PU

    Peter U.

    2 8 2018 09:57

    0       0

    never seen a presenter on RV get a ratio of thumbs down to thumbs up this bad, EVER

  • LT

    Lucas T.

    1 8 2018 16:56

    2       2

    I made it through about ten minutes before tuning out. You might believe his good intentions if it were not below 13 layers of gobbledygook.

  • JC

    JAMES C.

    1 8 2018 15:11

    5       5

    I think this is largely nonsense based on superstitions created by carefully structured narratives laid on the people via a unscrupulous mass media. Much of the real social and economic issues being discussed has been baked in the cake of a vast number of companies for many years now. It seems bogeymen are being created to justify nations taking a subordinate relationship with the UN, generally for purpose of control and taxation of masses via unelected UN body and its policies (I have to raise taxes because the UN said so)? Its shameful that the system that has created the vast wealth we have (at least in developed nations) is not being relied upon to continue its work. It seems academia cannot or will not understand and filter the real from the imaginary and thereby train the young to continue the wealth creation we historically have.
    Anyone can achieve a goal if they have direct control of all relevant factors and "drive it home" but it is rare to have a system that is distributed and can achieve multiple and varying goals largely aligned with participants needs. Although not perfect this system is what we owe our "alpha" to in terms of national wealth (and what allows us to share with others). There is no guarantee of a societally beneficial goal if centrally created from averages, this drift towards some sort of neo-Marxism under UN rule is a real concern for the future.

  • SD

    Sebastien D.

    1 8 2018 12:23

    6       0

    The RV audience is unforgiving!
    It makes me feels that the guests are like gladiators entering the arena... and may not leave it alive...

    Expected much worst from the comments

  • VC

    Vince C.

    1 8 2018 07:22

    3       2

    The definition of smoke and mirrors. Poor quality.

  • WM

    William M.

    31 7 2018 21:35

    10       1

    Whatever your political view and/or awareness of ecological and social issues, Mr Shah gave a very clear, articulate overview of what the sustainable investing movement is all about. Even if you don't buy into it, it's a movement that seems to be getting a lot of traction with many investors especially younger ones. I appreciate that RV presents videos like this to round out our awareness and maybe open our minds...
    It would be interesting to have a follow-up with Mr. Shah discussing individual investments. As with the responsible investing movement that preceded this ESG movement, there is certainly much to debate when it comes down to specific investments, but that doesn't mean it's not worth considering when making one's investment decision. Ethics and politics etc. are always going to be very controversial and sometimes quite uncomfortable to "cuss and discuss", but I personally think we need to do more of this in this country if only to try and better understand each other and possibly cooperate with one another better. Or maybe we should all just get out our guns and duke it out in a big civil war re-enactment!

  • PW

    Paul W.

    31 7 2018 18:42

    0       0

    I have been a student of the African economies for several decades and remember what was probably the first iteration of "ESG" investing when many companies caved to the demands of a noisy minority to divest from all operations in South Africa. I believe the divestment had almost nothing to do with the end of apartheid and once apartheid was nominally ended (not really - it is actually worse today with opposite polarity), it left the country without the type of industrial base that could have helped it prosper. Maybe its just that I'm an old dog unreceptive to new tricks, but I don't see much positive coming out of the new ESG movement either. At the end of the day, I just don't trust a politically-driven (Mr. Shah's assertion notwithstanding) organization to create a list that reflects my values. I am perfectly capable of evaluating a company as to whether their behavior is something I would embrace within my own company - an ESG portfolio, by definition, represents a set of activist values that I might or might not agree with so I am just not willing to delegate my thinking.

  • GS

    Gordon S.

    31 7 2018 11:58

    6       0

    I fear that most of the people who are raging about climate change in the comments here are missing the broader message Mr Shah is trying to convey. One may or may not “believe” in CO2 emissions affecting global temperatures, fair enough, but does it really make sense to completely ignore the planet we live on? We are witnessing the collapse of ecosystems all around the world, in particular large drops in the biomass of insects on land and the mass dying of corral reefs in the ocean, the foundations of life. I am personally deeply convinced that we should take these environmental factors into account. Unfortunately, most of the ESG products are in my opinion frauds (just check out their various holdings), but that doesn’t make the issue less acute.

  • CY


    31 7 2018 09:27

    4       0

    Mr Shah is well spoken, and I appreciate the concepts on sustainability and responsibility he outlines. However there is little a typical viewer can act on short of going to buy a fund he manages, or just scratch one's head a bit.

    Of course one could go find the prospectus of his funds and look at the top holdings, but that doesn't add insight or value beyond what a person with an internet connection can consider already.

    However I doubt that Mr Shah couldn't have provided more insights. Perhaps it's just a matter of the interviewer not having enough time to ask the deeper questions?

  • JB

    Jason B.

    31 7 2018 05:12

    3       5

    Will he be managing the Clinton Foundation investment portfolio? How about Al Gore's $$?

  • SF

    Stephen F.

    31 7 2018 04:32

    2       6


  • GH

    Gregory H.

    31 7 2018 03:51

    13       3

    Don't fret... Every once in awhile it's good to have videos like this (this belongs on CNBC or Bloomberg), so you can be reminded how great many of the others are on RealVision.

  • DS

    David S.

    31 7 2018 01:59

    5       0

    This is always going to be a hard sell to independent traders. One point that Mr. Shah tried to make was that it may be more profitable to invest in green. He needed to show a concrete example of a trade now to interest the RVTV traders. None were shown as I remember. In the past the only way to make green profitable was for governments, (all of us) to subsidize it or pass laws like bottle deposits. At one point no one wanted National Parks until Teddy Roosevelt started the forest service. DLS

  • FC

    Fractal C.

    30 7 2018 22:38

    1       4

    I am not going to watch this but this has to be more thumbs down than up video for sure!

  • JL

    Jack L.

    30 7 2018 18:11

    8       2

    Peter Thiel compares the University/'Sustainability'/'Inclusion'-Industrial Complex as being the modern equivalent to the 15th Century Catholic Church selling indulgences.

    This was like going to mass :)

    Very well-spoken seemingly good natured gentleman though and I appreciate RV giving us all sorts of perspectives!

  • Sv

    Sid v.

    30 7 2018 18:04

    3       1

    carnival barker. Still, there is some education in seeing what is being pumped by the big dogs.

  • IF

    Ian F.

    30 7 2018 17:59

    9       0

    Just marketing for Oppenheimer's products... I went to a CFA event about ESG and they had someone from Oppenheimer pitching their ESG mutual funds. They run less than one $billion in this strategy. If they really cared they would put their money where their mouth is.

    On another note the New York City Pension Fund put a big chunk of their assets into an ESG ETF, you know how this story ends....

  • JB

    Jim B.

    30 7 2018 17:54

    14       15

    It's interesting to hear the views of a true believer on the climate change issue. Climate science is not only spectacularly wrong in its predictions, it is corrupt as a practice because of the politics behind it (which Shah claims are now irrelevant). Does he really think carbon dioxide is the main cause of "climate change," when the long-term geological data completely contradicts this assertion? CO2 probably has as much positive effect (fertilization) on the environment as negative (if any) effects. I wish there were a way to "short" climate hysteria, other than being short Tesla. The best way to insure that people (actual human beings) are protected against the potentially negative effects of climate change is to insure a reliable, cheap, abundant source of industrial energy - and this will inevitably include fossil fuels for many decades to come.

  • CK

    Chris K.

    30 7 2018 16:21

    31       1

    Unfortunately, RealVision seems to become increasingly intolerant to opinions that differ from the RV mainstream view on any major issue - be it financial markets, politics or science. While I’m personally critical of social investing, I appreciate Mr. Shah’s perspective. Listening to things that I disagree with is difficult (and sometimes straight out painful), but it helps me better understand other players in the market and become a more critical thinker. Nothing helps me more to refine my investing framework and I thus embrace the RV contribution that go against my personal beliefs.

  • SK

    Sung K.

    30 7 2018 16:20

    2       2

    Complete waste of 25mins

  • CM

    C M.

    30 7 2018 15:53

    3       0

    Comments in this video about looking down the road for 30 years reminds me of Buffett's desert island game. If you were stranded on a desert island for ten years in what stock would you invest? Buffett's trick was to find the company least subject to the corroding forces of competition and time. In this video, the theme is based on sustainability. The issue I have with a 30 year sustainability timeline is that a number of themes do take a long time to play out and may not make good investments today. One still needs to balance positive cash flow and multiples with the future, unpredictable size of "sustainability" end markets.

  • JM

    Jamie M.

    30 7 2018 15:35

    3       3

    somebody owes me 25 min. of my life back. Hopefully this was the "consumer" facing description of his job and there is a lot more to it.

  • BH

    Ben H.

    30 7 2018 14:40

    6       0

    Thanks Aniket,
    Very interesting topic IMO and we are deff seeing a shift towards this sort of investing ..

    You only have to look at China and what they are doing in regards to environmental initiatives, banning polluting companies and their big investment in electric vehicles including buses where you have whole city fleets now electric one of them has 16,000 buses all electric this is just in one city.. there is a massive push to go electric in China and also around the world this is now gathering momentum- its a great trend to be invested in over the coming decade and beyond IMO.
    In reply to Yuriy B's comment below as far as opportunities to invest have a look around this theme check out all the raw materials needed for this EV world- Lithium, cobalt, copper, nickel both producers and explorers..

    Yuriy and anyone who is interested another company that comes to mind and fits this theme perfectly has an easy to install IOTproduct which is helping companies/buildings improve their environmental "footprint" and save money by measuring the utility usage and taking that data and presenting it as actionalble insites ( think fit bit for buildings) it shows how much water, gas, electricty, solar etc a building uses, all of this information is can be displayed on a screen in almost real time and allows building occupants/ building managers to be come aware of the usage and make changes.

    Studies have shown by making occupants aware it can save up to 6% off monthly electricy bill, they are also just releasing a service where a building can buy gold standard carbon offsett credits to offsett their monthy footprint and become carbon neutral- IMO this is huge..

    The company is called Buddy Platform ltd and is listed on the ASX, code BUD.
    Disclamer i hold BUD and none of the above is investment advice as always DYOR lol..

  • GM

    Greg M.

    30 7 2018 14:34

    20       10

    Just to add some color on the Paris Climate Agreement that this Ivy League weenie kept droning on about in the video. There is no enforcement mechanism - the agreement is a paper tiger and useless. If Oppenheimer truly cared about the environment then stop funding the military industrial complex (divest from Lockheed et al.). The USA military is the 7th or 8th largest user of fossil fuels, not to mention every former base becomes a superfund site.

    Of course you think Climate change is a threat - that's who is signing your checks. You remind me of the SVP at HSBC who went around the bank spreading non-sense of climate change. I remember her starting her presentation with the line "the science is settled." (like science is ever settled) The lady pulled 475K a year in salary to boot.

    Global warming ERRRRR Climate change is a big-con and it is Monday morning and I don't have a tolerance for bullshit. Follow the money.

  • V!

    Volatimothy !.

    30 7 2018 14:18

    11       0

    Is it more sustainable to mine cobalt and lithium than coal and uranium? Nobody talks about factory farming and what they do with all that concentrated animal waste. Once again I think we are treating the symptoms rather than the problem (over consumption).

    “Our great error is that we suppose mankind to be more honest than it is.” Alexander Hamilton

  • MM

    Mike M.

    30 7 2018 12:27

    2       1

    Long term investing is chum for the HFT and the fast money boyz. Knowing what I know today I would never trade an equity or bond, every dollar saved would be invested in precious metals. If owning gold works for the Central Banks it will work well for this trader.

  • PU

    Peter U.

    30 7 2018 12:07

    2       5


  • YB

    Yuriy B.

    30 7 2018 11:59

    4       3

    Ankit, thank you for this! As a physician, a novice investor, and a shamelessly apolitical person, I love this. Would love to see a follow-up interview of specific equity opportunities in this space.

  • Nv

    Nick v.

    30 7 2018 09:42

    18       1

    Hi Aniket

    Interesting, thanks. I would highlight the success ESG has had in avoiding accounting fraud companies

    Have you excluded Facebook on ESG grounds from your universe as yet?
    For destroying democracy, spreading fake news and running a control structure at the expense of shareholders