Episode summary
Episode 368: A New Chapter in Sustainable Investing: Dr. Michael Viehs
The Fiftyfaces Podcast
· · 31 min · Guests: Michael Viehs
Summary
Michael Viehs argues that sustainable investing only makes sense when it starts with the preferences of ultimate beneficiaries and asset owners. He says the industry still mixes up ESG as an investment input, which is mainly about risk management and opportunity identification, with sustainable investing that aims for positive societal or environmental outcomes and may involve trade-offs with returns. He welcomes regulation that pushes investors to ask clients what they actually want, and he stresses that public and private markets require different approaches.
He traces his own path from an accidental entry into a PhD on shareholder engagement to practical work at Federated Hermes, where he applied academic research to portfolio managers and investment teams. That experience led him to a long-term investment philosophy centered on pension funds and insurance companies, and to a view that the most useful research is evidence-based and usable in investment decisions.
Viehs sees stewardship as increasingly thematic and expert-driven, but worries the current backlash could make portfolio managers avoid basic conversations with companies. Looking ahead, he highlights climate transition, nature and biodiversity, and AI-enabled data analysis as the most interesting areas, with AI potentially improving both reporting and impact measurement.
Key takeaways
- Viehs says ESG should be treated mainly as an input for risk management and opportunity identification, not as a synonym for impact investing.
- He argues investors should explicitly ask beneficiaries and clients what sustainability preferences they have before setting mandates.
- He believes stewardship starts with ordinary due-diligence conversations between portfolio managers and company management teams.
- Viehs sees nature and biodiversity, especially in private markets, as the next major sustainable-investing theme.
- He thinks AI can reduce repetitive reporting and improve impact measurement by helping compare companies and detect adverse effects.
Notable quotes
“Openly talking about what sustainable investing means is really important and at the end of the day it's a question of what do the ultimate beneficiaries and asset owners want”
“I would really characterize myself as being a long-term investor”
“the question that we ask as researchers in the beginning whether there is a financial benefit from environmental social and governance characteristics is actually not the right question to ask anymore”
“I think stewardship has evolved into a much much more thematic and also expertdriven exercise”
“success without fulfillment is the absolute failure”
How the episode opens
Openly talking about what sustainable investing means is really important and at the end of the day it's a question of what do the ultimate beneficiaries and asset owners want and I think we need to have a much much more open and nuance discussion about the fact that there are many investors asset owners out there who not necessarily want to have an investment mandate that specifically talks about sustainable impact or positive societal or environmental outcomes. And I think getting to grips with what the sustainability preferences of your investors and your clients actually are is incredibly important. And I'm to that extent also glad to see that parts of the regulation are moving into that direction whereby investors are actually required to ask their ultimate beneficiaries and clients as to what sustainability preferences they really have.
I'm Ethan Devit and welcome to the 50 Faces podcast. A podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. This podcast series is kindly supported by Franklin Templeton and Alvine Capital.
Franklin Templeton is a global investment management firm that provides a broad range of investment solutions including mutual funds, ETFs, alternative investments, wealth management, and technology enabled financial services. Founded in 1947, the firm manages approximately 1.8 trillion in assets under management and serves individual and institutional investors across more than 150 countries. Alvine Capital was founded in 2005.
It's European focused private capital advisory and placement agent that provides capital raising services to investment managers from its bases in London and Stockholm. It creates bespoke capital raising programs that blend appropriate investor targeting and sophisticated marketing to deliver a fund raise aligned with institutional expectations. I'm joined today by Dr.
Michael V, who is a globally recognized expert on responsible investment, stewardship, and long-term value creation with over 20 years of experience in practice and academic life.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- sustainable investing
- stewardship
- responsible investment
- long-term value creation
- future of stewardship
Companies and tickers mentioned
- BEN
- Franklin Templeton
- Alvine Capital
Watch the episode
Watch “Episode 368: A New Chapter in Sustainable Investing: Dr. Michael Viehs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Fiftyfaces Podcast, this episode and its artwork belong to Aoifinn Devitt. Octagon is not affiliated with the show; this page is an independent summary.
