Millennial Finance: Breaking New Ground In Sustainability Ratings

Millennial Finance: Breaking New Ground In Sustainability Ratings

September 2016

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Since the GFC, financial markets have been in the doldrums. Risk seems to lurk everywhere, and yields are shrinking. “Uncertain” and “shrinking” sum up precisely the dilemma for newly minted graduates with MBA and Finance MS degrees.

As an adjunct professor of securitization, I have been surveying the coping strategies of new finance graduates in the universities where I teach. Success comes to some by leveraging old relationships in new ways. Other graduates take advantage of the breakdown in market norms to carve out career paths in innovation.

A few, like Filippo Cecchi, do both.

From Passion to Epiphany

Living in Italy during the early 2000s, Filippo joined a small group of corporate and social responsibility (CSR) evangelists with a common vision and passion. At the time, they were unsure of how environment and social governance (ESG) principles created financial value.

Filippo moved to Hong Kong right after the Crisis, and earned an MBA at The Hong Kong University of Science and Technology. That is when the paradigm began to shift in his brain. He began questioning the relevance of textbook finance to long-term corporate health. He began to see CSR as more than a “good to have”—a core survival strategy in times of high volatility.

After graduation, instead of following the conventional path of MBA graduates back into the corporate world directly, Filippo rejoined his CSR evangelist-friends to update their ESG model and build world’s first sustainability rating agency, Europe-based Standard Ethics.

Filippo believes his own changed thinking is part of a bigger paradigm shift. Consider how sustainability is now used in corporate finance:

“Before, it was only used in biology and environmental science. Today it is commonly used to denote a firm’s capacity  to navigate complicated business environments controlled by diverse interests and beliefs of different stakeholders, investors, shareholders, academics, consumers and suppliers. The only way to find a convergence point is to do good!”

Filippo says firms capable of meeting high CSR standards are more likely to achieve sustainable conventional financial success. By taking fewer risks and demanding a higher standard of performance, their financial returns are marked by stability, predictability and yield.

 

This article was written by Ann Rutledge from Forbes and was legally licensed through the NewsCred publisher network.

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