Using innovative policy and regulatory approaches to incentivize the alignment of investment strategies with sustainability considerations /

The current institutional rules and norms governing the investment industry are no longer sufficient and have failed to ensure that the capital markets are effective and efficient in the allocation and management of public goods and finite resources. [...] The paper focuses on the investment strategies employed by the different actors in the investment industry and how these actors can be incentivized to incorporate sustainability at the various stages of the investment decision-making process. [...] From the investor perspective, these include the risk of not acting and therefore the risk to the business and investor returns, in addition to the positive returns from factoring sustainability opportunities into current investment approaches. [...] Given the size of assets under management, the behaviour of the investment industry is critical to global capital allocation and the direction of economic development and growth. [...] The issue is also compounded by the complexity of the challenge, as the investment industry grapples to define and therefore understand sustainability and the risks and opportunities arising from sustainable investment, often resulting in avoidance.