Investors

Investing with a long-term perspective

Investors, particularly pension funds, have the potential to drive systemic change by adopting integrated value strategies that account for financial, social, and ecological impacts. However, challenges persist due to the prevailing investment paradigm, which prioritizes maximizing financial returns based on Modern Portfolio Theory (MPT) and the Efficient Market Hypothesis (EMH), often at the expense of broader societal and environmental considerations. Many investors, including pension funds, tend to be passive, investing in numerous companies with limited involvement, missing opportunities to foster positive change.

To address societal challenges, investors could use active ownership and stewardship by integrating environmental and social risks into their strategies. Yet, obstacles like weak governance frameworks and a short-term focus hinder this shift. The future lies in adopting governance models that harmonize financial goals with the need to tackle climate change and social inequality, requiring new tools to measure and report social and ecological impacts.

By embracing integrated value, investors can align their investments with long-term societal and planetary needs, playing a critical role in creating a sustainable future where financial, social, and ecological objectives are balanced. This shift demands evolving investment criteria and a new sense of accountability from investors.