Steve Thurston (2021)
Yale law professor Daniel Etsy speaks at the High Peaks Impact Awards ceremony, Oct. 15, 2021.
The push for environmental sustainability will redefine the future of investing, Daniel Esty said at the inaugural High Peaks Impact Awards (HPIA) hosted by the University at Albany School of Business on Friday Oct. 15.
“We are going to see the investor world as a critical place for change because investors are increasingly flowing capital into sustainability,” said Esty, a professor in Yale University’s schools of Environment, Business and Law, and director of the Yale Initiative on Sustainable Finance.
“They’re defining a new foundation for business and capturing a societal set of standards,” he said.
Esty, who has worked on 12 books and dozens of articles about environmental protection, policy reform and sustainability, spoke at the symposium about environment, social and governance, or ESG, practices.
“A spirit more evident in this country than almost any other is part of an ethos across the world that nature was big and humans were small and that we live in a world of endless abundance. [It’s] fundamentally not true,” Esty said.
He said we are bumping up against “planetary boundaries.”
“The population is now big—approaching eight billion people—and nature in many places is limited, limited to the extent that the demand for resources is now greater than the supply and we are running down the critical stocks of natural resources on which we all depend.”
He said that business will need to organize around a “sustainability imperative” in which the entity that pollutes or harms the environment will pay the cost of operating that way. Science and data will be more important than ever.
Other experts on the day pointed toward companies that are shifting focus in that direction and attempting to find a way to measure environmental impacts in a way that translates to the company’s stock price. SRI, or Socially Responsible Investment, is one term for this as is ESG.
It may be a generational shift.
As a professor, Esty said he spends most days with young adults and sees a change in their definition of success.
“Most of these young people, as they go off into their careers, are looking for a business that can give them purpose, driving change across society broadly, but in the business world in particular,” he said.
As younger generations recognize the inherent risks of the environmental crisis, Esty said the question is no longer if reformation of business and government practices will happen, but when.
“It is quite clear that the public is increasingly outraged at clear evidence of companies becoming profitable with a business model that harms others,” he said. “That is no longer acceptable.”