With just a few weeks of the summer holidays left, and news about the warming globe dominating the daily headlines, you may be in the market for a book about ESG investing, or investing according to environmental, social and governance principles. Look no further.
We asked a number of sustainable-investment mavens around the office and outside for their latest recommendations. Quite a few are bookworms. ("Just one book? Oh dear, there are so many," was one response.) Several choices address the subject of “corporate purpose,” the somewhat squishy term that guides companies about their responsibilities to a wide array of stakeholders and society. Others are about the climate crisis. These two subjects dominate the list.
11 Great Sustainability Books
Grow the Pie: How Great Companies Deliver Both Purpose and Profit, by Alex Edmans
The finance professor and TED speaker writes about the importance of human capital, offers specific examples of how corporate chiefs can run companies for purpose, and how investors can tell which companies actually have purpose. "It is an excellent explanation of why ESG-conscious investing is about achieving growth through purpose, not giving up financial returns for the greater good," says Lindsey Stewart, Morningstar’s director of investment stewardship research.
Purpose and Profit: How Business Can Lift Up the World, by George Serafeim
This new book by the Harvard Business School professor describes how environmental and social issues are increasingly relevant to companies and society, and how these trends create value. "Serafeim brings together the theory of market-driven, competitive business performance in the sustainability vertical and cutting-edge views on purpose-driven companies," says John Streur, CEO of Calvert Research and Management, the sustainable investing firm owned by Morgan Stanley. "There are applications and examples that are valuable to ESG investors, CEOs, employees, consumers—all centered on helping to drive positive change."
The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy, by David Gelles
Under CEO Jack Welch, General Electric GE undertook a sustained effort to push its stock price higher by any means necessary, often at the expense of workers and innovation. This approach became hugely influential in corporate America. And Gelles, a reporter for the New York Times and "Corner Office" columnist, shows how it led to the biggest income gap since the Great Depression. "This is a critique of the excesses of shareholder primacy," says Morningstar’s Jon Hale. "Here’s why we need stakeholder capitalism."
Net Positive: How Courageous Companies Thrive by Giving More Than They Take, by Paul Polman
The former CEO of Unilever UL and longtime sustainability expert Andrew Winston summarise how to imagine, build, and transform businesses that can outperform in multiple dimensions—people, planet, profit. "This can help sustainable investors identify companies creating the most long-term value across all sectors, not just business—but also for society and nature," says R. Paul Herman, the CEO of HIP Investor. "Investors can then engage with and even pressure companies to perform higher on ESG metrics [leading to] higher shareholder value."
The Weather Makers: How Man Is Changing the Climate and What It Means for Life on Earth, by Tim Flannery
This award-winning oldie but goodie by an Australian scientist, first published in 2005, discusses the causes and consequences of climate change. "The most compelling prose, by a surpassingly good writer, on the topic of climate change that I’ve read," says Julie Gorte, the senior vice president for sustainable investing at Impax Asset Management. "It puts things in historical perspective in ways that stay in my brain no matter how many miles I travel since reading it the first time."
The Overstory, by Richard Powers
This 2019 novel about nine Americans who fight the destruction of the forests, inspired by their life experiences with trees, won the 2019 Pulitzer Prize for fiction. "The Overstory is a great, great book and will make you want to become a passionate tree advocate," says Lisa Woll, the CEO of US SIF, the trade organisation for the sustainable investing industry.
Saving Us: A Climate Scientist’s Case for Hope and Healing in a Divided World, by Katharine Hayhoe
A Canadian-born scientist and evangelical Christian, living in Texas, tells us how to talk about climate change. "More effective communication on climate is critical to changing people’s attitudes," says Morningstar’s Hale.
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth
In this quick, accessible read, the economist argues that society must shift from addictive growth and create economies that are regenerative and sustainable. "I constantly think back to her approach of re-envisioning economic growth to balance the requirements for human sustenance with the Earth’s capacity to provide," says Alyssa Stankiewicz, Morningstar’s associate director of sustainability research. "It’s an inspiring and realistic take on what a more sustainable future could look like."
The XX Edge: Unlocking Higher Returns and Lower Risk by Patience Marime-Ball and Ruth Shaber
Patience Marime-Ball is founder of Women of the World Endowment, while co-author Ruth Shaber is president and founder of the Tara Health Foundation. Their book offers the case for promoting women as financial decision-makers within your organisation. "This makes a strong case for diversity when it comes to financial decision-making, looking at the intersection of gender and finance to unlock both higher returns and lower risk," says Kristin Hull, founder and CEO of NIA Impact Capital.
The Outlaw Ocean: Journeys Across the Last Untamed Frontier, by Ian Urbina
Based on investigative journalism that Urbina conducted for The New York Times, this 2019 book focuses on illegal fishing and modern slavery—the latter has become an engagement theme for the UN Principles for Responsible Investment. "Outlaw Ocean explores the range of environmental and social crises, including sea slavery and illegal fishing, occurring on the world’s oceans every day," says Woll of US SIF.
Sustainable Investing: The Art of Long-Term Performance, edited by Cary Krosinsky and Nick Robins
This is another oldie but goodie, first published in 2008, that sorts out the different kinds of investing approaches, in an essay collection curated by sustainable investing lecturer Krosinsky and sustainable finance expert Robins. "You can dip in, read a chapter, and put it down for a while without losing the thread," says Gorte of Impax Asset Management. Gorte herself contributed a piece to this sustainability book on how investors became a force for sustainability.
My Take
As for me, I’ve been recommending The Ministry for the Future, by Kim Stanley Robinson. This sprawling novel about a world attempting to combat global warming contains many plotlines, including one about Mary, who heads the ministry charged with prodding governments to address the warming climate, and Frank, an aid worker who barely survives a blistering heatwave in India. The sun also appears as a character. The book is unwieldy, but it works, and it’s thrilling. On the non-fiction side, I’ve been dipping into the Global Handbook of Impact Investing, edited by Elsa de Morais Sarmento and R. Paul Herman. This War and Peace-sized book contains 30 chapters from a variety of authors on subjects ranging from gender lens, green transition bonds, investing for impact in employee retirement plans, and impact washing.
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