In May 2020, a consortium of investors including PensionDanmark, PFA, one of Europe's 50 largest pension funds, and a leader in sustainable impact investing, decided to invest over €50 million in VindØ ('wind island'), the world's first artificial energy island. The project, which was the cornerstone of the Danish government's climate action plan, was expected to have a 3GW offshore wind capacity by 2030, eventually providing 10GW of offshore wind, a scale equivalent to 25 traditional offshore wind farms.

However, PFA, one of the key investors, has decided not to make a decision on whether or not to invest in the project when the time comes for a Danish offshore wind tender, facing political changes and market downturns. Saadia Madsbjerg, author of Making Money Moral, notes that the sharp rise in such impact investments, which argue for sustainability by driving better social change, is a welcome development, but that both investors and companies lack relevant field experience, making it difficult to manage risks and create value on an ongoing basis.

Of course, it has become clear that climate change is already having a direct impact on reality. According to a report on Gen Z by Deloitte, a global consulting firm, titled 'The Tides of Change 2023,' 60% of respondents are experiencing anxiety about climate change, and their evaluation of whether or not their employer is addressing it is actively considered as a factor in their job decisions.

However, the solutions proposed to address this issue, which drive social change,must start from the premise that they can continuously convince both individual investors and companies of the future profitability and value of such investment opportunities. How can we keep both companies and individuals engaged in these slow-changing, abstract results?

In this regard, I suggest starting by recognizing that the term 'sustainability' is perceived and used differently by companies and investors.

Impact investors identify investment opportunities through the lens of social themes, such as underserved markets, health and well-being, education and technology, but individual investors aresimply people who are making small changesin their lives. Moreover, people within organizations and institutions have long spoken abouta visible and universally accepted understanding of sustainability that can be implemented on a large scale, through products, policies, etc. 'Sustainable value', 'Sustainability Proposal', 'Achieving True Sustainability', 'The Impact of Sustainability', etc. Butindividuals are simply small, personal practices that make them feel like they are doing 'good things'such as recycling, plant-based diets, local shopping, and workers' rights, at an everyday, human level, while having difficulty explaining the meaning of the term.

In other words, there is a significant gap in the understanding of value between companies and individual investors, who are identifying it in different areas of ideals and practices. This suggests that organizations that are genuinely interested in the impact of large-scale sustainability need to start by understanding the practices and beliefs of individuals who shape what is feasible in everyday life. In other words,sustainability is addressed on a global scale, but the complexity of individual practices can only be understood on a human scale.

Lee Ryan, a qualitative research expert, in his 2020 presentation on 'sustainability,' said that while experts could discuss the gap between intentions and actions on sustainability, the individuals who participated in the research felt justified in doing their best to make the small world they lived in a little better, but were shrinking or feeling guilty in the face of the massive discourse of 'sustainability'. In addition,while companies tend to focus on a bright and positive future in their mention of sustainability within various business activities, individuals in reality want to be optimistic but experience a kind of sadness as they look toward a bleak future, which is a difference.

We already know that the natural environment that our children will face in the future will be worse than it is now. Therefore, corporate slogans that focus on optimistic trends can stimulate both the hope of individual investors who want to be part of the solution to the current situation, as well as the realization that even the current state may not be maintained, making them feel more complicated and difficult about related investments.

Sustainability is a global challenge. However, people simultaneously think about sustainability and unsustainability, and they don't use the term 'sustainable' in everyday conversation. They also don't ask who can sustain what. Therefore, perhaps'viability' is a more appropriate term for the general public and individual investors. We live hard to survive. The fact that humans have continuously adopted and adapted behaviors necessary for survival makes this a suggestion worth considering.

In other words, it's not about survival of the fittest, butthe viability of survival of the fittest. If investment is an act for a better future, then in the future, investors and companies may have a better choice to start by investing in the keyword 'viability' to encourage individual participation.

P.S. I'm finding that the number of likes is higher than the number of views on my articles these days. While I'm not writing popular articles, I think my articles are too good to be liked by people who don't read them. I hope only those who like my articles will react.

*This article is the original content published in the e-newspaper on September 26, 2023.

References

The VindØ consortium

PFA loses faith in its own energy island

Author Talks: Saadia Madsbjerg on making money moral

More than 40% of Gen Z are quitting due to climate change, according to a Deloitte survey

2023 Gen Z and Millennial Survey

Sustainability: Addressing Global Issues At A Human Scale⁠⁠⁠⁠⁠⁠⁠