In this episode, Philippa talks to Sarah Adams about why the sustainable investing conversation has been distorted by an all-or-nothing mindset, how genuine stewardship actually plays out inside the real estate market, and the surprising ways companies and investors can work together to move sustainability initiatives forward.
Sarah Adams is co-founder and Chief Sustainability Officer at Vert Asset Management, where she designs the firm’s shareholder engagement programme and helps investors understand how environmental issues become financially material. Her career has spanned mainstream institutional investing at Dimensional Fund Advisors, environmental work with WWF and Forum for the Future, and academic study across UCL, SOAS and a recently completed MBA.
Her argument, running through the episode, is that sustainable investing has been asked to carry more expectations than any other corner of finance to be perfect, to solve everything, to be universally applicable, and to do it all without any impact on returns. That, she argues, is exactly what stops the conversation moving forward. Better isn’t perfect, but better is worth having.
In this conversation, you’ll hear about:
- The organic food analogy that runs through the episode: why sustainable investing has not yet made the shift from niche to normal, and why the “must be perfect or don’t bother” mindset is standing in the way
- Why Sarah wants to change the question from “does sustainable investing hurt returns?” to “which fund, at what fee, with what tilt, doing what work?” the same nuance you’d expect anyone to bring to a value or quality fund
- Vert’s focus on listed real estate (REITs) as an under-served corner of ESG investing, and why biodiversity in dense urban settings is a very different problem to biodiversity in a desert logistics park
- The data explosion of the last decade CDP, TCFD, ISSB, SFDR and Sarah’s concern about the “checklist inflection point” where widespread adoption stops driving genuine change and starts getting passed to the newest hire
- What real engagement looks like at Vert as a small investor “way, way, way down” the shareholder register, and how deep real estate expertise gives them a different kind of edge to the biggest houses
- The surprising discovery that some corporate engagement teams actually ask investors to bring specific topics up so they can push those issues up the chain internally
- The SBTI real estate story: how the science-based targets bar became so tight that companies began dropping out entirely, and the follow-on conversations Sarah is now having about what verification model comes next
- The B Corp catering moment (“no one has ever asked me for organic before”) and the landlord who quietly applied heat film to every window in the building after Sarah’s team asked about theirs
- The role of regulation as the stick, philanthropy as the youthful funder, and capital markets as the place where good ideas are forced to sharpen their pencil
- Sarah’s book recommendation, The Collective Edge, and the observation that runs through her working life there is no single wonder kid leading anything worth leading
- Sarah’s hyphenated word for the future she’s working towards: “pragmatic innovation”
Key takeaway
Sarah’s argument is that sustainable investing does not fail because of poor products or poor performance. It fails when it is asked to do everything at once, held to a standard of perfection no other corner of investing has to meet, and reduced to a monolithic yes-or-no question. The path forward is more nuance, better questions, and the willingness to have the messy middle-ground conversation. Ask more questions of your caterer, your landlord, your fund manager. It is free, it is powerful, and most of the time the person on the other end actually wants to answer.
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This podcast is intended to be of a general nature, will not be suitable for everyone, and should not be treated as a specific recommendation. We recommend taking professional advice before entering into any obligation or transaction.
Approaches to sustainable investing vary, and not all investments will meet every definition of “sustainable” or “ESG”. Sustainable investing does not guarantee positive social or environmental outcomes or investment performance. Investments can fall as well as rise and suitability depend on your circumstances.