It’s Climate Week in New York City, one of the largest climate action events in the world. Climate action requires transforming traditional systems, like financial markets. I spoke with ESG investment guru Jeff Gitterman about the potential of sustainable investing to foster climate resilience.
Jeff, we share a desire to create a more inclusive capitalist system. Can you describe your journey to build Gitterman Wealth Management as a responsible investment opportunity?
I decided to make Gitterman Wealth Management a sustainably focused investing firm after getting involved as an Associate Producer with the film Planetary.
Being introduced to well-known environmentalists like Paul Hawken, Joanna Macy, and Bill McKibben, as well as former NASA astronaut Ron Garan, really opened my eyes to what was happening to our planet.
Should sustainable investing be considered an alternative? It seems to me it should be part OF investing.
In my opinion, sustainable investing should be considered mainstream investing. Heatwaves, fires, droughts, severe weather, and floods are increasingly consuming the global landscape.
Investing like our life depends on it is somewhat of a new idea for us as a society, but we must adapt quickly given how fast the climate is changing.
Given the current economy and uncertainty around a recession, how do you view sustainable investment's place in a portfolio?
I personally feel that sustainable investing is the only way that a long-term investor should be thinking.
ESG is simply a richer data set, just as a GPS system is a better road map. ESG gives us more color on the companies we invest in and how sustainable a company is amidst our rapidly changing world.
Companies that solve the world’s biggest problems will be the world’s biggest companies, and it doesn’t make sense to ignore this wave.
Do we really need large institutions to lead this effort?
We need their capital to move toward limiting carbon emissions and towards funding solutions that will help us adapt to climate change. Things like crowdfunding and blockchain can certainly help, but the majority of capital sits in the big houses, and we need to bring them along.
What do you see as the barriers for investors?
Most sustainably-oriented private investments in VC and private equity are still primarily relegated to the wealthy. They generally do not allow younger investors with small amounts of capital to invest, even though so many young people are interested in taking some investment risk to help solve some of the world’s biggest problems.
In my opinion, the financial industry needs to become much more creative in seeking solutions to these problems.
Tell me more about your role in using media as an educational tool. What has the response been, and what would you like to see?
Financial advisors are the current entry points in our financial system for moving individual investor capital toward climate solutions, but most advisors are confused amidst all the differing opinions and political fighting over ESG.
We are trying to lead the charge in educating financial advisors. We have created two shows on FINTECH.TV — TheIMPACT and The Great Repricing, and published papers addressing risks to the capital markets due to climate change.
We need continued education to help advisors better understand the realities of ESG and climate-focused investing, for they ultimately stand as the gatekeepers for the many investors who want more sustainable investing choices.
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