On-Demand: Sustainable Investing | Innovation and Lessons Learned

And from there, we'll go to misconceptions, innovations and the future of this. We will have 15 minutes at the very end for questions and answers from the audience. So, throughout the discussion, I encourage you all to put your Q&A in the box that Bella gave us some instructions on because we will have time reserved at the end. So, without further ado, I'm going to pass it over to Preeti, Lourenco, and Danielle. And if you could each dive into what is your role, what do you do? You all come from this topic at a very different angle, so I'd like to just set the framework to begin with, if you could dive into your role and then from there, if you could define ESG and sustainability. So, Preeti I'll start with you, your role and then how you define those two.

Preeti Bhattacharji: Yeah. Happy to do that. And it's so great to be here. Great to meet everyone and to connect on this topic. My name is Preeti Bhattachar, I'm the head of sustainable investing for the US private bank here at JP Morgan. And Christina, you asked for how we think about the framework of ESG and sustainable investing. So, I actually just want to start by kicking us off and grounding us a little bit in the framework we tend to use, because there are a lot of terms that get thrown around sustainability, ESG, SRI, mission related investing. And I want to make sure that we're all using language as consistently as much as we can. So, I'm going to queue up the framework we tend to use here at JP Morgan in the private bank to help explain the various components of the space quickly.

And we can double click into different pieces useful to the group. So, when we're referring to the space, we use sustainable investing as our umbrella term and so sustainable investing are first any type of investing in this space. Within that space, I think there are roughly four different approaches we tend to see clients take and you'll see those outlined here. On the far left is the most common. It's an exclusionary approach increasingly called a value-based approach. This is the approach we take if a client comes to us and says, I don't want to invest in something. Often tobacco, sometimes fossil fuels, sometimes firearms. So, if a client comes to us and says, I don't want to invest in X, then we help them implement an exclusionary or values-based screening approach. So that's the first approach. The second approach is an ESG investing approach.

So that's the approach we take if a client comes to us and says, I'm worried about environmental and social governance-related risks in the portfolio. I'm worried about climate-proofing my portfolio. That's something we hear a lot lately. Can you help me identify investment managers who are uniquely presenting qualified to identify environmental, social, and governance-related risks in the portfolio and can you conduct security selection and portfolio construction accordingly? If a client comes to us without approach, then we help them up optimize an ESG investing approach. The third bucket is thematic investing. So, if you think of ESG investing is really around risk management. Thematic investing is all about alpha-seeking. This is the approach for clients who say I see these mega trends. I see electric vehicles and batteries and financial and mobile finance; I want to get in on these. How do I invest in alignment with some of these mega trends?

And so thematic investing is the right approach for clients who are looking to participate in these mega trends. And that fourth bucket, the last bucket on the far right, is what we call impact investing. Typically, on our platform that manifests in the private side. So, you're looking at some lock up, often about 10 years a lock up for that capital. But that is really for clients who say I want intentionality around my impact. I want additional really robust impact-related reporting around my investments, often third-party reporting. And so, if you think about exclusionary screening as the removal of something from the portfolio or integration around risk management, thematic investing around mega trends, impact investing is all about intentionality.

Christina Burck: Perfect. Thank you, Preeti. And Danielle, what about you? I think Preeti did a great job putting a whole bunch in there. So, anything else? First your role and as well as how you would define this space?

Danielle Barrs: Absolutely. First of all, so glad to be here. Thank you for having me. I am Danielle Barrs. I am a director in EisnerAmper's ESG and sustainability solutions group. I have a little bit of a different background than some other folks in this call. I have been in the past 10 years in what you would probably call traditional sustainability. We used to call it corporate social responsibility, refers to the triple bottom line. All of those things are kind of that umbrella sustainability term. So, I definitely agree with Preeti on anytime you hear the term sustainability, people tend to use it as an umbrella term and then you might dive into things like ESG integration or impact investing. I definitely think there are some confusions around the terms and so clarifying those is going to be extraordinarily important before we do dive into the discussion about the different kinds of investing.

I do want to lay the land a little bit about ESG versus sustainability because the previous clarification on these terms is really important. So, coming from the background of sustainability, you really do have these two sides to it and two overarching themes that you're seeing. So, within sustainability, a lot of folks will call that impact first mentality or the impact approach, something like that. And it essentially means that we are caring more about what our businesses are doing for the environment and how they impact the environment and our societies and our communities. That is the impact first mentality. And that is sort of your inside-out approach.

It's a very common layman's terms way of saying, it's your corporation's impact on the outside world, society, communities, environment. On the flip side, ESG we have these social issues, these environmental factors, the world is changing, we know this, we're moving towards a low carbon economy. How do all of these things, how do all of these transition risks that come along with this changing economy, that's my business and that's a very outside in mentality and I love dividing it out like that because it really kind of the stage between sustainability and then what we look at when we talk about ESG.

Christina Burck: Perfect. And then Lourenco, we'll go to you.

Lourenco Miranda: Oh, thank you very much. Thank you very much for having me. Thank you for the opportunity. So, I'm Lourenco Miranda. I am the managing director for EisnerAmper ESG and sustainability solutions. So, the way that we will approach is very exactly what Danielle mentioned. So, we go to our client, and I see a company as having to manage all their stakeholders, to have multiple stakeholders external and internal. So, you have external stakeholders like your business partners, your suppliers, the regulators, general public, the civil society. You have external investors. So, people that would like to invest in your company, capital providers like banks. So, bankers will look at your company and see how bankable you are. You want to also have access to funding, access to finance. So, there's a lot of different external stakeholders that you have to manage. At the same way that you have internal stakeholders like your board, your management, your staff, that you also have to manage, and you also have to manage their expectations.
So ESG and sustainability come to solve this seemingly conflicting objectives that the company might have. So, to Danielle's point, you have the external factors that will probably affect my bottom line, which will affect my ability to generate business in a sustainable way in the future. So, things that could happen with the climate change, things that could happen with a social event or a social factor, an internal governance issue that I might have in my company, I have a poor risk management or a poor compliance, these things will affect my ability to become profitable in the long run. So, I have to go look outside and see what are the opportunities that I have in order to reduce the impact of those external events. So those are the sustainability opportunities that I might seek in a very basic risk management concept, and try to mitigate and adapt my firm, my company towards those external events.

So that's where I see this as the two sides of the same coin, exactly what Danielle explained. We see that the operations of this company impacting the environment and all the stakeholders, the external stakeholders’ expectations towards this company or the general public, the consumers, the investors, how this company is affecting the society, is affecting the planet that we live in, that we share. And at the same time, investors and capital providers will be looking at how well I'm managing my risk, how well I'm managing those external events that will impact my profitability, will impact my balance sheet, my income statement and my strategy, my future outlook and how I disclose this to the outside. So, all of these elements that's integrated that I feel that you cannot separate them. It's very hard to manage just one in isolation. That's where I see the beauty of ESG and sustainability put together that we can have a holistic view of the company. And that's what I feel that can't be missing and we'll talk about this later on today on sustainable investing.

Christina Burck: That's perfect. And I think we touched on a lot of the things that we hear interchanged and the differences in defining. So, I think we hear sustainability, sustainable investing, ESG impact, which you all touched on. One more I'd like someone to define it and talk about the differences in the space is also responsible investing. I think that's one other term that we hear interchanged. So, could someone just hit on the definition and the differences between responsible versus impact and sustainable?

Lourenco Miranda: I think I can take this one.

Christina Burck: Go ahead.

Lourenco Miranda: So, it was in 2017 that the United Nations Financial Institutions, coined the term responsible investment. So, they had created principles for responsible investing. So, I think the term responsible investing is an umbrella term that could mean interchangeably with sustainable investing. So responsible investing is a term coined by the UN Principles of Responsible Investment by the United Nations. That's something that can create some confusion, it can create some terminology confusion, but I think that's not the point. I think the point is, is sustainable investing, or responsible investing really creating the results that it was promising? So, if I am investing responsibly or sustainably, will that really bring a better future to my kids, to the next generations?

When I think about sustainable investing, or responsible investing, and the way that I put them together in one big terminology, is this concept of: “I'm going to invest in my capital today, not for my benefits today, but the benefit of future generations”. There is this intergenerational aspect of sustainable and responsible investing that I don't think that it's still ingrained in our minds, in investors' minds and people's minds that this concept of long-term. That something that, like the impact of climate change, is not going to happen tomorrow, it's a progression and a transition.

So, if you're investing in the transition, if you're investing in impact, the impact will be observed in the future. So responsible investing or sustainable investing, however you call it, it must carry this mentality of a long-term, intergenerational capital allocation. The benefit of my investment will not be perceived today, it's going to be perceived in the future. But, of course, I want to receive returns from my investments today. I want to see how to solve this balance between short-term returns and long-term benefits. So, all of this is probably the equation that we must start thinking about in sustainable or responsible investing.

Christina Burck: That's perfect. And yeah. Anyone else you want to add?
Danielle Barrs: Yeah, I'll just say I really like the way that Preeti laid it out. I think that conceptually, it makes sense to me to have sustainability as the umbrella term and then have sustainable investing and responsible investing be used interchangeably similar to how corporate social responsibility, you see that same term is kind of being interchanged with sustainability. However, I will say I have not seen it laid out like that nearly enough. I think it's a great concept. I think it's how it should be. So, I've heard a lot of impact investing and responsible investing being used interchangeably and a bunch of them go back to that impact materiality versus financial materiality, folks really are using the impact first mentality to be part of a sustainability spectrum. However, when you look at investing, for some reason, those terms start differing a bit.

So, a lot of folks are using impact investing to say, we want to use our money, our investments to do some good for society and we want to have a positive impact. That's kind of where that term comes from. However, to Lourenco's point, you also do need returns on this and that's fair to want to have both. The give impact first mentality really does say we want to do good first. And the idea of impact investing really is saying if there's not the return there, I don't know if we want to do it. So, to me, it's a little bit of a misnomer. I think that responsible investing, and sustainable investing definitely should go hand-in-hand as saying, we want to do good for the planet, for the society, if we don't get the returns that we're looking for, it's okay, we'll get there and then ESG or impact and ESG investing and some of the other returns we're using can be more we really do want the financial return.

So, it's definitely tough. I just saw the other day on a site, essentially, they laid out those terms and then just added the term impact in everything. So, it said responsible impact investing, ESG impact investing, sustainability impact investing. And I just thought that it was so strange to be adding impact in there, but I really do think it's important of the call that the difference between sustainability really is your impact first and then the other side is we care more about the returns, but generally speaking, I really do like the way that Preeti laid it out there.

Christina Burck: And I think that's absolutely the perfect transition. So, we've defined, we've really spent time on that. So exactly what were you alluding to at the very end. Like what are some of the biggest misconceptions you all hear in the space of sustainable investing?

Preeti Bhattacharji: I'll jump in on that. And exactly, it's that last point, I think one of the biggest misconceptions is that there has to be a financial trade-off to participate in the space. I think part of the reason where you break the ecosystem up into the buckets that you saw is it emphasizes when you're looking at ESG investing and you're looking at thematic investing, you're actually looking at market rate investing. You're looking at protecting your downside risk and you're looking at opportunities for alpha-seeking. That is the intention behind those buckets. I mean, for those Lourenco, I take your point as you think about long-term trends. I think a lot of sustainable investing is about long-termism, but I will tell you, the long-term is here in many ways, particularly as it relates to some of these climate trends.

And so, for those of us who are investing in electric vehicles 10 years ago, we've frankly done very well for ourselves. And if you're thinking about what your timeline is, it doesn't have to be 40, 50, 60 years, it could be, but it could be shorter. And the rate of change for a lot of these sustainability trends is reducing the timeline for a lot of these catalysts, both regulatory and market-related catalysts to actually start manifesting. And so, the big misconception is there has to be a financial trade-off. We have seen again and again, in the data and on the platform that you can often get market rate returns. Sometimes you can get alpha-seeking returns while taking these ESG integration and thematic approaches, particularly as you're participating in some of these mega trends.

Christina BurckThat's perfect. That's perfect. And I think just partnering with sustainable investing. Lourenco, I'll pass this one over to you. So how do you guys advise clients and individuals every single day, how to avoid some of these most common mistakes, how some of the ways you just advise them to avoid that?

Lourenco Miranda: And it is absolutely right. So, to Preeti's point, it's absolutely right. We need to have returns, so you have to be profitable, and you have to show the profitability in the short-term and as well as in the long-term. So, we have to be sustainable in the sense that you want to sustain this business through the future, through to the next generations. But at the same time, of course, you must have immediate return for your shareholders. One of your stakeholders, the investor, wants also to understand if the money that they're investing or the capital providers are also getting their money back. So, if I'm lending to a company, I want to be sure that the credit risk of this company is low so that I will receive this money back. So, that is the same concept of risk management.

So my biggest advice to my clients and to the public, in general, that are thinking about sustainably investing and yes, the returns, you have to look for the returns and there's no trade-off, I agree with you Preeti, that there is no trade-off between investing sustainably, doing good for the planet, for the society and the returns. So those are very linked, very connected elements. But in the case of sustainable investing, I want to bring the concept of causality. What is causing those returns to be good returns now and sustainable in the future? I want to also be able to show that the volatility of my returns is not too big. I also want to show that there is some sense of stability in that return for the future.

Returns now and sustainable in the future. I bring the term to causality in this equation. If you are thinking about sustainable investing, put yourself in the place of the companies that you're going to invest and look at all the exposures that this company has in terms of ESG risks. Understand the ESG risks to this company and the transmission channels that environmental, social, and internal governance, corporate governance issues could bring to your profitability, to your result. If you think about environment, the number one factor we think about is climate change. Climate change is divided into physical and transition risks. What are the transmission channels that will link those physical risks and transition risks to your balance sheet, your income statement, and into your cashflow, mainly cashflow because that's one that is going to be more indicative of sustainability in the future.

That's how I believe that through due diligence, understanding the risk factors that will impact your bottom line, impact your profitability, through all the environmental, social, and internal governance factors is the way to go. Once you understand, identify, and assess those risks, you can start creating opportunities on the other side of the equation, how to mitigate and to manage those risks. That is the two sides of the same coin concept: first understanding the risks by identifying and assessing those risks, understanding why this company has this ESG rating, which is totally linked to these risks that these companies face, the vulnerabilities that this company is exposed to some external events.

Now, these risks are linked to the opportunities to the initiatives that this company is taking to avoid and to mitigate those risks. When you start putting those two (risks and opportunities) together, it's exactly what will guarantee the sustainability of your business. When you put those two (risks and opportunities) together and do your due diligence, and understand the company that you're investing, if you're investing in a fund, understand the composition of that fund. Understand the two sides of the equation, the risks, and the opportunities that exist to mitigate those risks. That for me, is the essence of sustainable investing.

Christina Burck: I think that's perfect. And I think Preeti, I'm also going to pass it over to you in that sense. So, Lourenco covered a lot in there, but yeah. Any other best practices, since you both answered the last few to advising clients on how to do their own due diligence. I know Lourenco had a lot there, but any others you want to add for due diligence?

Preeti Bhattacharji: Yeah. I think Lourenco hit a lot of the key points. The only layers I would add is, first of all, don't think you have to do this alone, especially if you're new to this space, find the right partner, and if you're finding the right partner, two things you should be looking for. I would suggest you look for are character and competence. You want to find somebody with real track record and experience in the sustainable investing space, and you want to find somebody who has the right character, who will embody the types of sustainability-related goals you have, as you're trying to operationalize your own experience and your own portfolio in the space. So, character and competence, I think are what you'll want to look for in a partner and you'll want to partner to help you through this journey.

The other thing I'll say is, as you're double-clicking and with that partner, looking at some actual investment managers and investment opportunities we often talk about the four Ps, people, process, philosophy, and performance. You want to be looking at all four of those, and you will very quickly start screening out once you look at those four. Investment managers and investment opportunities that are frankly newer to the sustainable investing space. If you start asking people what their track record in sustainability is, what their performance in sustainability is, the investible universe shrinks very quickly. And that's yet another reason you want the right partner who can help you find those folks who have real track records in the space and who aren't completely to this movement.

Christina Burck: Perfect. And I think just shifting a bit from definitions and misconceptions in the space. So, Danielle, I'll go to you. What are some current innovations you are seeing in the space of sustainability?

Danielle Barrs: Sure. So, if we're talking about sustainability as a broader term, not necessarily as it relates to investing, but just the sustainability space in general, I would say number one, very big innovations in tech and IOT. So, building automation systems, improving operational costs through energy efficiency, clean energy integration, and all of that clean tech space is going to be really, really big. So, I would definitely look into that. Within that same realm of energy, carbon capture and storage are going to be huge, which is essentially taking carbon out of the atmosphere and putting into the ground really, really great innovations in that space as well. This is kind of an outsider here, but aviation, sustainable aviation fuel, and fuel in general, either in EVs, regular speed vehicles or aviation sustainable fuels is going to be really, really big. So, I'd say those three things.

Christina Burck: Perfect. And Preeti, Lourenco, do you want to answer that from a sustainable investing angle?

Preeti Bhattacharji: I think Danielle did a great job of covering a lot of the thematic areas where there's a lot of innovation happening. I'll say within the investing universe, we're seeing a lot of innovation around shareholder engagement. And so, thinking through how investors can use not just their dollars and their purchasing power, but actually use their shareholder power to vote proxies, to engage with corporates in order to further align those sustainability-related agendas and to Lourenco's point, to create those financial catalysts that actually help change pricing in the market. You know that I think is really cutting-edge work that a lot of the investment managers are seeing on the platform are pushing forward. So, I think shareholder engagement, which has been around for decades, but is being reborn in the context of sustainability is really having an interesting moment right now.

Christina Burck: Yep. Absolutely. Lourenco, do you want to elaborate more on that?

Lourenco Miranda: I couldn't agree more. That's engagement, stewardship.. That's exactly the way that you can start influencing and increasing your impact. And that's for me, the essence of sustainable investing. At the end of the day, you want to have a better society. You want to have a better planet because the societal benefits of it. Having a better planet are the warranty of future generations. That's the idea. So, engagement is key. I've seen also another big innovation in the space in terms of data. So, we all say that our data is scarce, that we don't have a uniform convention of how to deal with the data. There are standards that are out there, there is SASB, there are frameworks, like TCFD. They're coming along to help us create this common language for financial impact. Those help a lot in terms of standardizing the language. One thing that I've seen in terms of data when we complain about scarcity of data, are innovations in terms of unstructured data, things like natural language processing, machine learning, artificial intelligence, being put into play, and if used wisely, they can bring a competitive advantage for sustainable investing because there's a lot of data there that is not structured in a way, they are not numbers in a table. They could be text, they could be even images. In my previous lives, I did models in terms of taking satellite images to create predictive models using artificial intelligence. So, all of these are part of the toolkit that should not be forgotten.

Christina Burck: Absolutely. And I want to just pause here quickly and remind the audience if you haven't done so already, feel free to put your questions in the Q&A because we'll be approaching that after a few questions. And so, a question for all of you even elaborating more on innovations, but instead, what do you see the future looking like for sustainability and sustainable investing? So, we talked about innovations, but then in the future more, how do you see that looking?

Preeti Bhattacharji: I think we're heading exactly through society around reporting and data. I think we're heading to a world with more robust, thoughtful, interactive reporting mechanisms. You know, I will say, as a member of the millennial generation, I feel data entitled and it shocks me that when I click into financial statements, I can't see alongside my financial returns my carbon returns, my other sustainability-related returns, even as I think about ESG-related and opportunities in the market, I think that's changing. We at JP Morgan recently acquired a company called Open Invest to help think through what is that next generation of thoughtful, interactive user-friendly reporting going to look like? And I think we and others are building it now and that's ahead of us across the sector.

Lourenco Miranda: Excellent.

Danielle Barrs: I agree on data and reporting for sure. Just to piggyback off of a few things that Lourenco and Preeti both said, risk management and then data, especially surrounding I think materiality and those frameworks and standards, it's not really innovation, but consolidating those frameworks and standards is going to be really big. That's important because that's how you're getting out there so that investors can make informed decisions. So, this is really, really important stuff that we're now automating data, especially to the data entitled generation, right? I mean, that's really important for us to see everything all at once in very user-friendly dashboards. And to do that, you really need to incorporate things like automation from the get-go, from start to finish and through the entire life cycle and risk management is going to be a huge one.

And it ties into data because for example, part of your risk management is looking at those, and you talked about it a few times, your transition risks and your physical risks. And essentially, that's looking at the risks associated with climate change. So, we can't decouple this conversation of ESG investing, sustainable investing and sustainability at large, because the reason why we're looking at this sort of thing is because of the impacts that we're seeing on the environment and on societies. So, for example, your physical risk management is going to look at extreme weather events. So, you're looking at flooding, wildfires, all of those things, and those are going to affect your investment decisions and folks aren't reporting on it.

So, things like integrating, it sounds out there, but integrating geographic information systems so that you can look at flood plains, that's going to be huge and no one's talking about it enough. We're not thinking about it enough, but really bringing in all of the different industries and sectors to work together to get that streamlined data and then incorporate it in a way that the report investors are getting can be very easily compared across companies and sectors and is readily available. So, I think those things are going to become really important as well.

Preeti Bhattacharji: Yeah, Danielle, I couldn't agree more. And I think you just did a really great deep dive into the future of E. You know, something we haven't talked as much about on this panel is the future of S. And so, in many ways, I think the environmental piece of sustainable investing has matured a lot over the last 10 years. And the social piece is where the environmental piece was 10 years ago, but it is in the maturation process as well. And so just like we've talked about climate and climate reporting and climate disclosure, I think there's a whole body of work coming down the pike around human capital management and disclosure. You know, the majority of the American economy is no longer about making widgets, it's a service-based economy. And so, thinking about how we manage talent, which are our primary assets, what does retention look like? What does training look like? What does diversity look like in that context? I think there's going to be a lot of work in the future in sustainable investing around that SPSG.

Christina Burck: Perfect. And so just a final question. Basically, being is there anything we haven't touched on? I think Preeti did a great job on how we haven't really talked about the S too much. So, any other points, any calls to action, anything maybe we talked about, but you'd like to dive more into, or maybe a topic we didn't even? So, I'll let all of you answer that. Just one last thing to really leave the audience with.

Lourenco Miranda: I think more and more the civil society, the general public, regulators, they are coming and asking for more (information), and then investors are asking for more (information). In the past, the first time I worked with environmental and social risks was in the late '90s,in the beginning of the 2000s. Back then, there was a very small number of people working on this topic, and we didn't know very well what that was about. It improved a lot. This topic was a nice to have topic back then. Today it's a competitive advantage. If you have ESG integrated, you have corporate social responsibility,
if you manage the ESG risks and the opportunities, and if you understand how those (risks and opportunities) impact your balance sheet and your income statements and your cash flows, and you manage them accordingly, you have good governance, you take care of the social part, you're concerned about the environment, having all those pieces together are no longer nice-to-have. Investors are there too. As very active shareholders they are, they will go and start asking for more society. You see more and more people asking. There's no way out, that's inevitable. It's going to be part of all conversations.
Preeti Bhattacharji: The only final thought I would add before we move to Q&A is if you feel overwhelmed, that's fine, you don't actually have to know how to do any of this. You have to know how to find the right partners who can help you do this. And so, start small, focus on directionality. Think about what your sustainable investing-related goals are. Are they alpha seeking? Are they risk stabilization? Are they impact first? And find the right partners who can help walk you through the process.

Christina Burck: Danielle, any last points you want to add?

Danielle Barrs: The only thing that I will expand on a little is this concept of materiality. And so, to Preeti's point, find good partners, that's really important, but also find the leadership within your company that can actually come together and make a plan for this. And that really starts with these materiality assessments, SASB, which is the Sustainability Accounting Standard Board, its sector-specific standards. And there are 77 industries covered. You cannot possibly cover all of the metrics and targets out there that you need in order to do your due diligence. So really sit down with the people, with the stakeholders that matter and determine what's right for you and what you want to fill focus on first, as opposed to just trying to tackle everything at once, because that's really difficult and find people that can help you do that.

Christina Burck: Perfect. So now we got a couple of questions from the audience. And Danielle, I know you were just at an energy conference, so maybe you want to tackle this one and Preeti and Lourenco can help you, but how do you see energy, oil, and gas companies moving more towards sustainable energy, and what are the current challenges they're facing?

Danielle Barrs: Sure. Carbon sequestration, I know this isn't really related to investing so much, but I mentioned carbon capture and storage. So that's a really big way that they're moving towards there. Kind of tying in the investing piece again, clean energy and clean tech is where a lot of people are investing when they want to go into this space. And so, as Preeti mentioned earlier, you don't have to go into sustainability investing needing financial returns, of course, we want to, but just so we're all clear, we can go into it with a philanthropy mindset as well and say these are some things that we really want to do that are going to impact the environment. Clean tech is going to be one of those things that you're going to see some great returns in the future. Carbon capture and storage, battery storage, it's a little bit lagging. Unfortunately, we are really hoping to see some movement in that space, but not quite yet, but clean tech and carbon capture for sure.

Preeti Bhattacharji: Yeah. Couldn't agree more. And just as a testament to how much opportunity I think we at JP Morgan see in this space, we've just hired our first chief climate scientist. You know, Dr. Sarah Kapnick, she has a PhD in these issues. And so, looking for investment opportunities, looking for risk management across the wealth management platform, I think that's a testament to how seriously we're all taking this now.
Christina Burck: Absolutely. And I think this question as well is great. Are there any tax savings to be realized in this space?

Preeti Bhattacharji: So, to answer this question I'll actually make a broader point, which I think is important, which is sustainable investing is still investing. Your core fundamentals of investing don't change. You're looking at liquidity, tax management, returns, all of the things you look for when you're managing any type of investing, your partner should still be looking for and helping you figure out what your sustainable investing platform looks like. So, for example, on the JP Morgan US Private Bank platform, we have 130 products. Tax management is one of the considerations as we look through the suites of product and help you figure out which of the right fit for you. So, absolutely, tax efficiencies and tax management are part of the conversation and so is liquidity. So are all of the other goals-based considerations that you have when you're thinking through building your portfolio. You know, I often talk about how you can multitask with your money, your money is doing a lot of things for you at any given moment. Sustainability adds another their layer into that. You're not losing your tax management considerations when you're having these conversations.

Christina Burck: Perfect. Perfect. And last question, unless you all want to jump in, what are some of the hardest lessons you've learned in sustainable investing over time? I know we've seen to my very beginning; this space has changed. It's evolved over the last mid-years between countries, corporations, individuals. So, what are some of the hardest lessons you've learned?

Lourenco Miranda: I can start this one. First of all, the concepts, the language, they can be overwhelming.. You can feel overwhelmed by the number of the different names and philosophies and the jargon. It is overwhelming. So, the way that I have solved this through time was I try to go back to basics, and I agree with you Preeti as well, that investing is still investing. The foundational concepts of investing are still there. I always advocate to go back to basics, risk management and finding the opportunities to mitigate those risks that you're exposed.

You reduce the cash flow volatility and increase predictability in the future. It's going to be better for the investors and it's going to be better for the capital providers. The general public will like that because they will also perceive that you are doing something good for the society and doing something good for the planet is doing good for the society because we live and we share this planet. So, the societal benefits of sustainable investing, responsible investing, you call it throughout the spectrum, they have to be perceived. So go back to basics of why we are doing this, why we are talking about sustainable investing and why we are doing this with our money. So why we are doing this with our capital if I'm a capital provider. So, think about the reasons why, and the causes that are impacting our decisions.
Christina Burck: Perfect. Preeti, Danielle, any last points? Otherwise, this has been great.

Preeti Bhattacharji: I think the only other thread I'll pull on is related to Lourenco's comments. There's a lot of stuff these days that calls itself sustainable. Everybody is suddenly a member of the sustainable investing market. Scratch beneath the surface, dig deeper, ask questions. If you don't know what questions to ask, find a partner who can ask the right questions. And by the way, I think that is ironically an exciting development that so many folks are crowding in, because I can tell you, 10 years ago that wasn't the case, nobody was crashing this party and suddenly everyone's crashing the party. So, make sure that you're with partners who can help you ask the right questions as you're navigating the space to really interrogate the opportunity set, to make sure that you're able to participate in a robust way that aligns with whatever your goals are.

Christina Burck: Perfect.

Danielle Barrs: I think one last thing that I will add and apologies. Now that Preeti and Lourenco's had support that. I do want to point out that ESG investing is really just a first step in how we're going to get to where we want to go as a global economy. There is this whole other aspect of everything, which is ESG performance improvement or just sustainability performance improvement in general. So, you definitely want to look at investing initially and doing your due diligence in those companies, but there are ways to invest in helping companies improve their ESG performance and improve sustainability. So, it's not just we're going to invest in this and then leave it and let the chips fall where they may, there's active involvement in this entire process where you can get these companies to where they want to go, and I think that should definitely be mentioned as well. So, in addition to that initial step, there are ways to work with these companies and make sure that they're doing what they say they're going to do.

Christina Burck: Perfect. Now, this has been great. I appreciate it all. You guys really helped us uncover the definitions, the space, misconceptions, innovation in the future. I encourage the audience, if you guys have any other questions or thoughts, or if you want to dive in deeper with any of these speakers, I encourage you to reach out to your EisnerAmper or JP Morgan contact, and they can set something up. They can introduce you to the speakers. Don't let the discussion stop here, this is just a starting point. Kind of to all our points, the space has changed so much. It's going to keep changing. So, make sure you do your due diligence. Make sure you work with different partners who really know this space and you can educate you and teach you. But thank you so much for joining us. Speakers, thank you so much for your time. And with that, have a great afternoon. And Bella, I will pass it over to you because I know you had some last-minute touchpoints.

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