Capital Allocators – Inside the Institutional Investment Industry Sustainable Investing 1: Wendy Cromwell – The $170 Trillion Opportunity (Capital Allocators, EP.139)
Jun 8, 2020
Wendy Cromwell, Vice Chair of Wellington Management and Director of Sustainable Investment, shares her extensive experience in the finance industry. They discuss the booming field of sustainable investing and the importance of integrating ESG factors into investment strategies. Wendy emphasizes the transformation from exclusionary to proactive investment approaches, the influence of climate research, and the rising focus on social issues in addition to environmental ones. Listeners gain insights into the evolving landscape of responsible investment and the necessity for active engagement with companies.
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Path to Sustainable Investing
- Wendy Cromwell's interest in endowments and foundations stemmed from their progressive investment policies.
- This led her to focus on investment policy research, asset allocation, and multi-asset management before transitioning to sustainable investing.
Sustainable Investing Evolution
- Sustainable investment has evolved from negative screening to focusing on positive investment rationale.
- This shift allows for broader investor alignment by focusing on shared goals rather than exclusions.
Market Inefficiency and Long-Term Value
- Market inefficiency exists due to an overemphasis on short-term growth and a decline in average stock holding periods.
- This creates opportunities for long-term investors focused on high-return companies with strong stewardship.
