In assessing the year ahead, we consider four things to be self-evident and to give rise to five areas of focus for ourselves and our role in the sustainable investment value chain:
A - About us
- SRI-Connect must remain free-to-use for everyone with current professional exposure to the sustainable investment value chain … in economics terms, it must remain a 'public good'.
- To achieve this, we have to continue generating revenue from training work, from best practice evaluation and market analysis and from communications facilitation. That's fine. We like doing this kind of work - especially where these support the integration of sustainability into fundamental valuation and capital allocation.
- We must, however, do a better job at communicating the free-to-use benefits of SRI-Connect across the value chain. While site usage has grown consistently and steadily over the past ten years, this occurs through 'word of mouth' promotion rather than through active marketing by us. To accelerate this, we're setting ourselves a target of 10,000 site users by the end of 2026.
B - About the world we operate in
- Considered policy and predictable outcomes are taking a rest from the world stage at present. While today's frenetic pace may not constitute a 'new normal' forever, it seems likely to persist for a while longer.
- SRI-C should try to avoid being distracted by this (very distracting) geopolitical turmoil while recognising that our clients (as investors, investment analysts and listed companies) have to track, predict and respond to this.
C - About sustainable investment (two thoughts):
- Generative AI will soon change everything for everyone in any information and judgement business (and investment is not much more than an 'information and judgement business') by commoditising data at zero-cost
- This means that our industry's 'reporting and data play' is effectively over.
- Significantly, however, sustainable investment requires a different type of information (derived from human judgement) that AI will not easily assimilate / generate effectively (especially - as seems highly likely - if it is misdirected towards data gathering). Sustainable investment can benefit significantly from AI but also could be a 'moat' to takeover by AI.
- Adaptation to and mastery of this emerging technology is of paramout importance (to us and to our clients)
- Sustained underlying demand: Beneath the froth of politics and policies and renaming and bla bla bla, there is a fundamental client demand for the application of sustainability to investment practice
- However, this underlying demand should not be mistaken (because of the combination of toxic politics and AI) as validation that 'keep calm and carry on' is a viable strategy for sustainable investment.
- The next iteration of the industry will need to be fundamentally different from the last.
D - About the future (for sustainable investment)
Ultimately, three things matter for the long-term of our industry:
- Integration within fundamental active investment decision-making;
- Demonstrable sustainability impact
- The people that will deliver these
Anything that does not contribute directly to one of these outcomes should be treated with caution as potentially superfluous to requirements.
Staff turnover in the industry in recent years means that there a considerable number of experienced individuals free of corporate constraints and available to share their experience with our industry as it reshapes itself for its next iteration. We will be doing our best to engage these people in whatever way we can.
So ...
- For the long term: Perhaps in spite of the world we see around us today, we still stand with Margaret Mead's confidence in "a small group of thoughtful committed individuals…"
- We have had the privilege of being part of an expanding group of thoughtful, committed sustainable investment professionals since 1995 … and we are still believers.
- For 2026: Our focus will be on 'efficiency for all … through focus by SRI-C'
Efficiency for all … through focus by SRI-C
Fundamentally, SRI-Connect aims to facilitate the exchange of high-quality, investment-relevant ideas and debate between companies, investors and research providers.
Whereas everyone seeks this for themselves and their firms, we aim to provide open-access & architecture that enables it to be done at scale.
To achieve this, we need to focus ruthlessly to ensure that - in a world of AI slop - relevant and meaningful content reaches the right people in a format that is actionable by them. Such focus needs to be applied at multiple levels:
I - Focus on integration and capital allocation
Generally, we support 'integration' by:
- Staying clear about our definition of 'integration' (impact of sustainability factors on valuation and capital allocation) and not being deflected by definitions that allow any application of sustainability to any investment practice to qualify as 'integration'.
- Focusing on the real sustainability drivers of investment advantage (typically 'Operating Context' and 'Company Exposure' rather than 'ESG performance').
- Ensuring that 'investability' is the primary criterion by which we prioritise research and analytical comment for distribution
Focus for 2026. We will:
- Expand the universe of sources that we cover & …
- … increase the rigour of our focus on 'investability' …
- … while improving our understanding of the interests and focus of individual analysts and investors …
- … such that we deliver - to each analyst and investor individually - more relevant investment insight without increasing the overall volume of content
II - Focus on profile - for insight and connectivity
(for organisations, for individuals, for companies, for investment research ideas)
We stand by our long-held conviction that sustainable investment is only as good as the best ideas generated by our most innovative thinkers (whether these be individuals or teams, senior or junior, asset managers, research providers, companies or others). We have always sought to reward the efforts of these individuals and organisations with profile in the sustainable investment value chain and to report the results of such profile building transparently to the individuals and organisations profiled.
Focus for 2026. We will:
- Expand significantly the number of firms for which we can supply SRI/ESG engagement profiles
- Distribute there profiles (to counterparts and stakeholders) more proactively and broadly in a way that improves connectivity between companies, investors and research providers
III - Focus on efficiency in company <=> investor engagement
(… and hence real sustainability 'impact')
We genuinely believe that our industry could double the impact of its sustainable investment engagement and halve the time it takes if we were simply to deploy tools and techniques that have long been used by 'mainstream' investors. (Given the pressure that 'ESG engagement' is generally under, this year might be the time to adopt approaches that are aligned with mainstream practice and private).
Focus for 2026. We will:
- For as many companies as are interested: Demonstrate how they can double the effectiveness of their sustainable investor engagement (for the year) within a period of two working days
- For as many investors and research providers as are interested: Demonstrate how greater efficiency can be achieved by focusing on winnable cases, by passive accessibility, by encouraging companies to do the logistical lifting and by trusting the weight of market interest
IV - Focus on social inclusion
Although I haven't quite articulated how we are going to approach this issue, the following strikes me to be true:
- 'ESG' has never properly got to grips with the 'social' dimension and has largely ignored the 'economic' dimension of sustainability
- This isn't - as is often suggested - because it is harder to get quantitative data on social or economic issues than on environmental ones. Rather it's because we have looked for 'end of pipe' measurements without considering what a fundamental objective might plausibly be. (We have sought to measure what might be measured rather than the deeper question of what matters)
- The 2007-8 credit crunch was the first substantial 'miss' in this regard; the easy demonisation of 'ESG' was a reckoning point; AI presents a likely third chapter. Let's not miss this next opportunity to add value simultaneously to society and investment performance.
V - Focus on capacity development for the value chain
Again, we haven't articulated exactly what we're going to do here.
However,
- We like developing capacity and supporting skills, careers and job development within sustainable investment. (See: Mike's mic: 12 years to develop; 12 hours to deliver)
- We particularly like helping investors develop the skills for sustainability integration and helping company managers (IROs and CSOs) develop messaging and communications practices that facilitates integration and sustainable capital allocation
- So, watch this space …
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SRI-CONNECT in bullets
As part of our resolution to "do a better job at communicating the free-to-use benefits of SRI-Connect across the value chain", we have summarised our work and role in seven bullets below. There's nothing new in this apart from the determination behind writing it ... to ensure that everyone in the global sustainable investment value chain knows it.
SRI-Connect (www.sri-connect.com):
- … is the research and communications network for the global sustainable investment value chain
- … is (and always will be) free for sustainable investment professionals to join and use
- … has 5,000+ users comprising investors, research providers, listed companies and organisations that support these
- … facilitates the flow of high-quality sustainable investment research, supports direct contact between companies, investors and research providers and builds the profile of individuals, teams, organisations, reports, analysis and investment ideas
- … focuses on: integration of sustainability into valuation and efficient communications across the value chain
- … is unique, provides an unique set of services (for free) and does not (so far as we can work out) compete with any other organisations in the sustainable investment value chain
- … is run by Mike Tyrrell and Andy White both of whom have >30 years' experience in sustainable investment and is funded by work that we do in training, market analysis and communications support
