Putting the Long Term to Work: Shaping the Prudent Society Investment Model

Abstract

Thinking small is the last thing institutional investors should be doing right now. A fundamentally new investment model, best described as the Prudent Society Model, is emerging to cope with the changes, risks, and opportunities resulting from the sustainability transition. Institutional investors who are the first to succeed in getting this model right will flourish. The model integrates three insights: focusing on short-term disruption for long-term success, developing tools to successfully exploit new instruments and unlock new markets because of climate change, and deepening the ownership of investments. The authors suggest that boards need to learn, adapt, and experiment to implement this model.