‘Where the Money Tree Grows: Invest Climate-Smart and Get Rich’, the new book by acclaimed sustainability duo Sasja Beslik and Karim Sayyad, did not come as a complete surprise for their numerous international fans. Already in March 2019, just a few days after publishing the Swedish version, the co-authors announced on social media that the book would soon be available in English too. Promise fulfilled, in mid-August, the short but dense tome hit the market and has since managed to claim a top-hundred position in the ‘Green Business’ category on Amazon Kindle Store.
It appears that even Nordic readers who enjoyed the book’s original edition might benefit by revisiting the new version. A lot, if, arguably, not enough, has happened in the world of sustainable investing during the last couple of years. “We have revised and updated parts of the book to reflect some development,” Beslik tells NordSIP. “We had to work with the language and add new features, like an ESG analysis of Amazon, H&M and Tesla as well as remove some parts that were too Swedish,” he adds. “Sadly, however, there is a lot of hot air in ESG, and most of the issues, challenges and opportunities are pretty much the same,” he concludes.
After pioneering ESG in Sweden for the past couple of decades, both Sayyad and Beslik have recently moved on to seek new perspectives and experiences outside the Nordics. “The international audience is far more engaged and keener to understand what can be done in this space, far more willing to discuss the complexity of ESG,” reflects Beslik. “Nordic countries used to have an advantage five years ago, but today ESG capacity is more even internationally,” he adds. As their book is now accessible to a broader set of readers, their ambition is clear. They hope to bring the best of Nordic ESG insights into an international context and contribute to a healthy discourse on sustainable investing.
An Oddly Convenient Truth
The book starts by reiterating some obvious yet quite often forgotten or misinterpreted facts. We are all aware that reducing the footprint of our individual consumption is critical to solving the climate problem. We know, moreover, that as wealthy individuals indulging in a comfortable western lifestyle, our footprint is enormous compared to that of poorer countries’ citizens. “In the United States, for example, one person’s carbon footprint is comparable to that of 33 people in Bangladesh, 10 in India, 4 in Sweden, and 2 in China,” the authors remind us.
The point, however, is not to shame and blame us for our frequent flying, excessive meat consumption or constant showering. Yes, it would be highly advisable to take it all down a notch for the sake of the planet as well as our conscience. Yet, those individual acts of thrift and abstinence are hardly the most efficient way to contribute to the cause. Instead, the book convincingly argues that we should employ “the power of capital”. It illustrates in no uncertain terms a truth that those of us less willing to compromise with a comfortable lifestyle might find rather convenient: “Your cumulative, lifetime carbon footprint (that is, the sum of your climate impact from your consumption and investments) will be largely derived from your investments.”
The authors are at their most passionate when calling on individual investors to do the right thing and act responsibly in their pension and savings portfolios. Given all the supporting evidence, it is a conundrum that even notoriously rational and eco-friendly Nordic people fall short of acting logically. According to the book, eight out of ten Swedes sort their waste for the sake of the climate, yet merely 12% have made changes in their investments to render them more sustainable. Facts like this alone are enough to justify the need for more educational efforts, of which this book is a perfect example.
Beyond Electric Cars and Solar Panels
After presenting convincing arguments for changing our investment behaviour to make room for sustainable solutions, Sayyad and Beslik move on to explain in some detail how we could go about doing it. There is a world of opportunities beyond straightforward solutions like buying the shares of electric vehicle makers and solar energy companies, they argue. The pedagogical introductions they provide to the world of energy storage, smart farming, green infrastructure, or plastics alternatives might be quite an eye-opener for many unwitting savers, including some professional investors.
Careful not to overwhelm the readers with the complexity of ESG analysis which encompasses so many different aspects and layers, the authors introduce each new issue through a specific example. Whether patiently dissecting the business models of companies like Tesla, Amazon, Facebook, or Alibaba or taking on whole industries like big oil or fast fashion, they make sure to emphasise the importance of a stringent materiality assessment. Acknowledging that there is not always consensus about materiality, Beslik and Sayyad urge us to think carefully about what is important in each case, ask the right questions, and examine the most relevant data before making an investment decision.
The Exciting Life of a Sustainable Investor
Apart from providing a valuable set of tools and rules for aspiring investors, however, one of the book’s feats is making the world of sustainable investing sound anything but boring. As many financial professionals know, serious ESG analysis is not just about reading reports and pouring over statistics. Fieldwork, quite often of the adventurous type, is an essential part of the exercise.
The book gains in entertainment value, too, as it lavishes examples of the authors’ fact-gathering and truth-finding expeditions. It takes us on a journey around the world, from the cobalt mines in the Democratic Republic of Congo to nickel extraction in the Russian city of Norilsk, from an oil rig in the middle of the ocean to a steel factory in Bosnia and Herzegovina. We follow engaging and personal stories about witnessing the consequences of climate change while diving in Australia’s Great Barrier Reef or being thrown in jail at the airport in Bangalore for collecting contaminated water samples.
Engaging or Disengaging
The field adventures described in the book add more than some colour and emotion to the world of sustainable investing. They are also illustrations of investor engagement. True, not all investors would go to the same extremes just to verify the environmental or social policies and practices of the companies they intend to invest in. They should, however, expect the professionals they entrust with their money to do so, according to the authors. Through examples, once again, they demonstrate the power of group action, whether in the form of shareholder initiatives, investor alliances, or simply choosing the right ESG funds or ETFs.
Given Sayyad and Beslik’s experience in the asset management industry, the readers might be left slightly disappointed by the book’s final (and shortest) chapter, covering asset allocation and sustainable mutual funds. Surely there is more to be written on this popular topic than the four-page synopsis that reads more like an afterthought. Funds are, after all, the preferred investment choice for most non-professional investors who might benefit significantly from some expert guidance. Avoiding treacherous greenwashing and choosing suitable and reliable sustainable products is not that trivial a pursuit. Or is that the topic of the duo’s next book perchance?
Finally, let us address the book’s subtitle, ‘Invest Climate-Smart and Get Rich’. In the litigious world of finance, a statement like this would most probably be accompanied by a lengthy disclaimer. Yes, there is plenty of academic evidence to support the thesis that you can do well by doing good, at least in the long run. There are, however, no guarantees that you will get rich even if you study the book diligently and follow all the advice within. Just as the act of buying and nurturing an actual Money Tree, the most popular Feng Shui plant out there, is probably not going to attract prosperity to your home or office. However, if reading the book, or planting a symbolic tree, helps you focus your ambitions and intentions in the right direction, enriching future generations, it would be an excellent outcome indeed.