I think a lot of investors, especially those who are new to sustainable investing, are questioning whether or not hopping on that train is really going to make a difference. So, as someone who sees what's happening on the ground, are you optimistic about the impact this form of investing can have on the world?
Oh absolutely. I think there's something like $32 trillion of capital with an ESG type mandate or something that's ESG connected. We're definitely moving in the right direction, even if I think of 5 or 10 years ago. We were very early with ESG in 2012 or 2010. At the time it still looked like this hippy-dippy thing. Today it's mainstream.
Two things: One is that every investment platform is selling an investment product, and an investment product is not just about returns. It's about everything. And part of that is impact. So we have a lot of investors actively demanding ESG, who only want to do ESG deals, and they're very inquisitive. You definitely can't fool them. So we see firsthand how that resonates.
Secondly, when you think about ESG, you're thinking “Is your investment making a positive impact? Can you quantify it?” But there's also this much more pragmatic view, which is with our investments, are we taking into account what are very likely changes in social dynamics that will result in loss? Or that will result in regulatory compliance? So a great example is when we looked at oil in Canada as far back as 2009 or 2010, and we were modeling scenarios that would introduce a carbon price. So is that ESG? Yes, in a way, that's ESG investing.
When you're making a decision, you're saying “What if society changes and what we're investing in becomes pricier?” So in a way being an ESG investor is almost just being an investor, where you have to think about what will happen to society in 5 years, and all the trends are pointing toward more regulation and more demand from consumers. I have this joke I like which is if that alternative medicine worked it would just be called medicine. Well, ESG investing at some point will just be called investing.