An Introduction to Sustainable Investing

Some people think a business's job is to pursue profits. We think they're right.

Some people think a business has a broader responsibility to its employees, customers, community, and world. We think they're right, too.

For a long time, many believed there was always a trade-off between the two. The conventional wisdom held that pursuing profits meant ignoring responsibility, and that when companies considered their people and the planet they lost focus on the bottom line. The evidence shows that is wrong.

This should not necessarily be surprising. We see this same dynamic in so many aspects of our lives.

When you make those kinds of decisions – thinking long-term, considering your reputation and relationships, weighing benefits and not just costs – you take the High Road in your personal life.

The managers of companies have to make some very similar choices. Every day, they're confronted with the decision of taking the High Road or the Low Road.

High Road Businesses are ones that care about the environment, their employees, and their reputation — and who put policies in place to reflect this. They are more likely to be innovative, attractive to top talent, and conscious of risks than Low Road Businesses who do not share these policies.1

And — perhaps most important from the standpoint of investing — High Road Businesses have been shown to be more profitable and generate higher investor returns.

1) Khan, Serafeim, Yoon, Corporate Sustainability: First Evidence on Materiality, 2014. Eccles, Ioannou, and Serafeim, The Impact of Corporate Sustainability on Organizational Processes and Performance, 2014. Greening and Turban, Corporate Social Performance As a Competitive Advantage in Attracting a Quality Workforce, 2000.

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