Josh Whitney, Executive Director and North American Ventures Lead at Anthesis Group, attended the 2020 Burridge Conference, hosted by the Leeds School of Business at the University of Colorado, Boulder. This year’s focus was on sustainable investing.
Josh moderated the panel, “Business Decisions with an ESG mindset,” with three finance industry professionals including Om Bhatia, Chief Financial and Revenue Officer at Parcel S.A., Michael LaMotte, Senior Managing Director at Guggenheim Partners, and Gerrit Nicholas, Co-Founder and Managing Partner at Orion Energy Partners. They brought expertise in Global Paper and Pulp, Investment Banking and Energy Investments.
The conference brought together professionals and students from the full suite of the financial sector, including venture capital, private equity markets, startups and the business ecosystem.
The “Business Decisions with an ESG mindset” Panel
Josh was invited to help kick off the conference by providing an overview of sustainable financing in the “decisive decade” and the key issues, risks and opportunities driving businesses to climate action. In a time of unprecedented environmental change, the WEF Global Risk Report of 2020 concluded that climate-related issues dominated all the top-five long-term risks by both impact and likelihood. In short, sustainability is the future of every sector. Stakeholders are driving companies and regulatory actors to have higher standards, impacting across a company’s supply chain and operations, as well as downstream to consumers. With so much pressure on businesses to take action across a wide range of sustainability issues, it is useful to have a shared framework in place for working towards sustainability goals. The UN Sustainable Development Goals have become the essential guide for businesses on how to meet these raised expectations, how to act and what to focus on, serving as the the 17 commandments of Sustainable Investing.
Grounded in a quick overview of major sustainable themes and drivers impacting the economy today, Josh moderated the panel, shaping the conversation around what a good business looks like, how panelists are directing investments to address sustainability, managing risks related to climate change and posing questions to the panelists around what their LPs are looking for, and how the finance industry has recently changed in the face of climate change.
The conference reinforced our understanding of the momentum behind and rapid growth for ESG investment. Markets are maturing and people are hungry. There’s plenty of money to put to work, though the challenge of finding good deals and companies remains. Impact investing is no longer considered exploratory and companies demonstrating strong ESG performance are in high demand. Private wealth management companies, PEs, venture capitalists, and family firms are beginning to recognize the need for systems and evaluation tools to vet the ESG credentials of potential and current investments. To provide companies with a roadmap to meeting investor sustainability expectations, Executive Director Don Reed produced a white paper about climate risk in later-stage private investing. It explains the drivers, physical vs. traditional risk, and what good climate risk analysis looks like as LP expectations rise. At the other end of the private investment spectrum, Anthesis Ventures is leveraging deep subject matter expertise to support early stage companies developing breakthrough innovations that can accelerate the transition to a sustainable economy.
The Current and Future Landscape
In the face of coronavirus, sinking oil prices, and a dropping Dow, it’s time to watch investment behavior. Some LPs still believe climate change is a luxury investment, despite growing evidence of the commercial opportunity and business imperative of addressing sustainability in investments. It is undetermined whether this belief will drive investors to turn back to traditionally conservative investments, and away from sustainable investing. The decisive decade ahead of us will require sustainability to play a critical role in investing strategy, an expectation that was reinforced by the speakers and informal dialogue at the 2020 Burridge Conference.