Sustainable: Moving Beyond ESG to Impact Investing

Appropriate for a Catholic and Blackrock alumni Terrence Keeley’s “Sustainable” offers a conflicted defense of ESG investing which Keeley worries has gotten out over its skis in it’s ability to meaningfully help solve the problems that proponents suggests it does while delivering sustainable returns in its current formulation.Citing Bank of America research he argues “Good” ESG stock have been rich due to crowding since 2008 (page 192) but notes they gave up 55% of that premium in early in 2020. He also worries that ESG funds are overweight large cap tech, “They should also query what might happen to the performance of ESG funds if the fortunes of these five companies (AAPL, AMZN, MSFT, GOOGL, META)) were to deteriorate substantially.” (page 194) As of his writing these firms represented 22% of the S&P but 30% or > of many active ESG funds.It’s worth noting that btw August 1982 and the start of 2022 the S&P 500 delivered a 10.3% compound annual return against the backdrop of a 2000 bps decline in interest rate. Given a likely sea change in the interest rate environment in the aftermath of 2022 many ESG favorites may have a higher beta and higher risking which means ESG managers might need to jibe to protect returns.Keeley is very bullish on impact investing (page 238) but his evidence to support it shows greater variance so the skill of the managers might become more important going forward.One question I would have for Keeley is if there is an opportunity for firms like Blackrock to use impact vehicle to push money towards capital intensive security spending where returns might be lower than the market in the short term but have significant spillovers as we are seeing from American defense firms’ contributions to the ongoing Russo-Ukrainian War.Like Graham Greene’s disillusioned Whisky Priest in The Power and the Glory Keeley ultimately keeps his faith in impact investing and stakeholder capitalism to generate returns for individual investors and contribute to advancing our common human family.

A lively, engaging and thoughtful read. It was perfect for someone like me, who doesn't have a brain for finance, but cares deeply about how I'm investing our retirement accounts. I was hesitant to read a book by someone with Keeley's expertise and experience, assuming it would be beyond me. But his style is so lively and warm, he draws the reader close. And Keeley is able to impart complex information in a way that even a non-Wall Streeter like me could grasp. Highly recommended.

First 14 chapters were sensible, informative, and thoughtful. But the remaining three chapters devolved into woke leftist goals, and unrealistic solutions. For example, green energy has an important role to play, but could it possibly be more relable without mining for lithium needed in batteries? Would have been a lot better if it ended at chapter 14.

Some very useful references but perhaps too generic in overall content. Although some of the fundamental concepts are well explained

Full disclosure, I am the publisher of this book. We published it because when conflicting opinions abound on the value of ESG, this book demonstrates why businesses need to drive equitable, inclusive economic growth and why ESG is not working and will not work in its present incarnation. The proposed solutions are the most crucial contribution of the book.

Love that Keeley took his mission driven values alongside his passion, drive, knowledge and writing skills to compile this fantastic book. SUSTAINABLE is educational and actionable with better paths forward for all us . BRAVO and much thanks to Terry Keeley!!!!!

ESG — environmental, social and governance factors — have been adopted by major corporations around the globe. But is ESG all good? In ``Sustaianable'', Terrence Keeley has produced an exceptionally readable book on how markets, governments and society can bring about solutions. Chapter 11 --``InsideThe ESG Arms Race'' -- is particularly captivating and illuminating. Beyond being a real-world veteran and expert on the topic, Keeley, simply put, can write, something hard to find for a complex topic like ESG.

Terrence Keeley, a hopeful but pragmatic investment expert, delivers a much needed sober and analytical review of the important and often oversimplified debate about ESG investing. Drawing on his long career in finance and his lifetime attention to ethical behavior, Keeley offers an overview of the field, the environmental and social challenges it hopes to address, and a variety of suggestions for improvement.Whether you are serious, skeptical, or merely curious about ESG investing, Keeley's Sustainable should be top of your reading list.