Investment sustainability

This week the sustainability meeting organized by Banco Santander was held. The event, which was chaired by the president of that global financial institution Ana Botín, was attended by representatives of companies and organizations of the financial sector of our country to, first of all, learn about the perspectives of said financial institution, on investments with orientation of sustainability in the world and our country.

In this regard, it should be noted that this vision is new for Mexico but that it has already been operating for several decades at a global level on sustainability and its connection with the objectives of protecting the environment and reducing the impact of carbon emissions. Originally, it had a vision of concern and social responsibility about the importance of companies taking decisive actions to protect the impacts on the environment caused by human activity.

However, in a second phase, which at first seemed more like an orientation of good wishes, it has gradually become a global agreement that also involves the vision of the main institutional investors who understand the effects of climate change as a potential risk towards investments. and that therefore must be recognized and incorporated in the development models of companies and, consequently, in the evaluation for the allocation of resources through investments in the capital and debt markets.

It is clear that for companies, debt issuers and those who make resource allocation decisions through investments in global financial markets, the vision of sustainability is also a potential source of value and business generation.

To first understand the vision of potential risk for investments, it is important to understand that, for example, an increase in global temperature in the next 20 years may represent an impact of several trillion dollars on investments located in coastal regions worldwide.

In particular, there are more vulnerable sectors such as investments in coastal areas with a hotel vocation but also in large cities and business centers.

It is also important to remember that this type of investment does not only refer to environmental impacts, it refers to the importance of addressing economic imbalances that particularly affect vulnerable groups worldwide. The lack of attention on social issues to groups in economic vulnerability causes serious social imbalances that, translated into political imbalances, create an adverse environment for investments and compromise the financial viability of many businesses.

Hence, in this expanded vision, sustainability issues also address the need to conduct businesses that incorporate what is called Impact Investments, which in addition to generating value, focus on generating growth opportunities in areas and between groups. today oblivious to economic growth.

These investments are no longer just desirable but absolutely necessary. Globally, there is a strong trend (even reflected at the regulatory level) that large institutional investors can only invest in publicly traded companies, for example, that realistically test their sustainability actions. Even as soon as in the next 10 years, many global investors will be prevented from making investments in sectors that today are considered to have a negative impact at the environmental level, such as those related to the consumption of coal, the exploitation of fossil fuels or those that are precisely intensive. in the use of technologies or fuels that contribute to environmental deterioration worldwide and specifically that fuel global warming.

This new vision refers not only to polluting a little or polluting less. It refers to creating conditions that allow to reverse the negative effects of climate change and address the most important issues of social imbalances and marginalization, which are negatively uneconomic if we seek a sustainable development capacity at a global level and especially in countries like Mexico.

Raúl Martínez Solares

CEO of Fibra Educa and President of the Council for the Promotion of Educational Savings

Behavioral Economy

The author is a political scientist, a marketer, a financier, a specialist in behavioral economics and a professor at the Faculty of Economics at UNAM. CEO of Fibra Educa and President of the Council for the Promotion of Educational Savings.

Follow him on Twitter: @martinezsolares

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