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Sustainable: Moving Beyond ESG to Impact Investing
Should business and finance play larger roles in resolving the great social and environmental challenges of our time? Proponents of environmental, social, and governance (ESG) investing say yes. They argue that ESG financial strategies can help reverse runaway carbon emissions and fix income and gender inequalities, among other ills. ESG-integrated investments already encompass more than $120 trillion in financial assets. Are they working as promised? If not, how can they be improved?
In Sustainable , a finance-industry veteran offers an insider’s look at the promises, prospects, and perils of ESG investing. Terrence Keeley argues that many ESG advocates have been overly optimistic about what it can accomplish. Divestment threats are ineffective tools for altering corporate behavior, and verifiably “good” companies do not systematically generate great returns. Most importantly, business and finance cannot cure social ills on their regulators, public policies, civil society, and individuals must all play specific, complementary roles to shape the future we want. Keeley provides comprehensive solutions that would promote more inclusive, sustainable growth. In particular, he recommends reallocating capital from some indexed products toward an emerging class of strategies with more verifiable social and environmental benefits. Keeley identifies dozens of alternative “impact investing” strategies that could generate true double bottom lines. He also highlights promising civic organizations with proven methodologies for achieving widely shared benefits at scale.
Proposing practical, actionable, and in many cases profitable solutions to social and environmental problems, Sustainable offers an incisive vision of the roles business and finance can and should play in building a flourishing society.
In Sustainable , a finance-industry veteran offers an insider’s look at the promises, prospects, and perils of ESG investing. Terrence Keeley argues that many ESG advocates have been overly optimistic about what it can accomplish. Divestment threats are ineffective tools for altering corporate behavior, and verifiably “good” companies do not systematically generate great returns. Most importantly, business and finance cannot cure social ills on their regulators, public policies, civil society, and individuals must all play specific, complementary roles to shape the future we want. Keeley provides comprehensive solutions that would promote more inclusive, sustainable growth. In particular, he recommends reallocating capital from some indexed products toward an emerging class of strategies with more verifiable social and environmental benefits. Keeley identifies dozens of alternative “impact investing” strategies that could generate true double bottom lines. He also highlights promising civic organizations with proven methodologies for achieving widely shared benefits at scale.
Proposing practical, actionable, and in many cases profitable solutions to social and environmental problems, Sustainable offers an incisive vision of the roles business and finance can and should play in building a flourishing society.
- GenresFinanceSustainability
320 pages, Hardcover
Published November 29, 2022
17 people are currently reading
192 people want to read
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Displaying 1 - 4 of 4 reviews
January 16, 2023
This book was an interesting deep dive into ESG and a new approach to sustainable investing, as promised. Keeley brought up a lot of fascinating and relevant points that I have saved in my future notes and that I enjoyed. The book was well researched and worth reading. I may be recommending it to a friend.
Yet despite that, I think it should be revised and fleshed out more. First, parts of it felt repetitive – I need a third party opinion on this, because it may just feel that way to me because I am somewhat familiar with the subject matter. Second was that it seemed that the author sometimes jumped too quickly to some conclusions, without talking through their practicality or how we would actually get there. I was hoping for a bit more build-up and analysis of some of the points he brought up at the end. Lastly, on that note, the book ended abruptly. I finished it expecting more. I wanted the thesis to be fleshed out more. Instead I felt like the end was very vague, “what if” pontificating.
Yet despite that, I think it should be revised and fleshed out more. First, parts of it felt repetitive – I need a third party opinion on this, because it may just feel that way to me because I am somewhat familiar with the subject matter. Second was that it seemed that the author sometimes jumped too quickly to some conclusions, without talking through their practicality or how we would actually get there. I was hoping for a bit more build-up and analysis of some of the points he brought up at the end. Lastly, on that note, the book ended abruptly. I finished it expecting more. I wanted the thesis to be fleshed out more. Instead I felt like the end was very vague, “what if” pontificating.
September 5, 2025
A critique of the ESG movement, a disdain not rooted in pro-oil climate denial or a libertarian frustration with non-consensual collective action rather, the author questions the effectiveness of ESG’s mechanisms in addressing its stated goals. The author presents ESG divestiture as dual loss: it represents an ineffective strategy and a lost opportunity cost.
The author argues that divestment and exclusion-based portfolios will ultimately fail, given an inconvenient truth of market economics (pun intended). Exclusionary financial practices cannot effectively restrict funding if the commercial activity is legal and delivers acceptable returns. Value based divestment will not meaningfully deter investment, as the “sinful” activity will continue to attract adequate financing from less hesitant investors.
Additionally ESG divestiture removes the investors’ ability to participate directly in corporate governance and to exercise their values based conviction. Keely champions the democratic power of a shareholders to reform companies from within. A value aligned corporate owner wields more influence than an idealistic relinquisher.
Given the shortcomings of ESG divestment strategies, the author presents impact investing as a more constructive approach to values-based investing. Unlike exclusionary tactics, impact investing emphasizes positive selection and active portfolio management, rewarding companies that deliver measurable environmental, social, and governance outcomes. Its progress is tangible, verifiable, and expressed in objective terms.
The book is divided into three sections: The history of ESG, the shortcomings of ESG and the case for impact investing. The first two sections dominate nearly 80 percent of the book leaving the impact investing side underdeveloped. The book excels at exposing the flaws of ESG and preparing the ground for an alternative, however it leaves some to be desired on the implementation of impact strategies.
The author argues that divestment and exclusion-based portfolios will ultimately fail, given an inconvenient truth of market economics (pun intended). Exclusionary financial practices cannot effectively restrict funding if the commercial activity is legal and delivers acceptable returns. Value based divestment will not meaningfully deter investment, as the “sinful” activity will continue to attract adequate financing from less hesitant investors.
Additionally ESG divestiture removes the investors’ ability to participate directly in corporate governance and to exercise their values based conviction. Keely champions the democratic power of a shareholders to reform companies from within. A value aligned corporate owner wields more influence than an idealistic relinquisher.
Given the shortcomings of ESG divestment strategies, the author presents impact investing as a more constructive approach to values-based investing. Unlike exclusionary tactics, impact investing emphasizes positive selection and active portfolio management, rewarding companies that deliver measurable environmental, social, and governance outcomes. Its progress is tangible, verifiable, and expressed in objective terms.
The book is divided into three sections: The history of ESG, the shortcomings of ESG and the case for impact investing. The first two sections dominate nearly 80 percent of the book leaving the impact investing side underdeveloped. The book excels at exposing the flaws of ESG and preparing the ground for an alternative, however it leaves some to be desired on the implementation of impact strategies.
August 4, 2024
I enjoyed the discussion around the irrationality of the current ESG movement.
October 23, 2025
Introduction
The author ends his introduction with a well-known Irish joke of an American tourist visiting Dublin, asking for directions to Temple Bar: “I certainly wouldn’t start from here”, is the response. But “here”, the author argues, in the context of sustainability, is all we have and “we better get going”. However, I think it would have been more appropriate to introduce this book with an alternative punchline to that joke used in the west of Ireland, “you’re on the right road, sure enough, but you’re turned the wrong way”.
Overall Review
This book reads more like a promotion piece for the asset management industry than a book concerned with impacting the world in any meaningful way. While the author acknowledges some of the failures of the capitalist system, they stop short of dissecting the systemic mechanisms that have contributed to these shortcomings. Instead, they lean towards the concept of "more inclusive sustainable growth" as the ultimate solution. In doing this, the book chooses to ignore questions about whether sustainability should ever take precedence over profit and growth, or if they can coexist harmoniously without hard choices. Instead, the author assumes we can all wave the magical wand of “more inclusive, sustainable growth”, and these difficult questions and trade-offs will no longer exist.
The narrative aligns with the prevailing sentiment in the ESG movement, advocating that sustainability should primarily be pursued when it promises financial rewards. The author introduces an intriguing hypothetical scenario where companies, driven by financial interests, willingly embrace social and environmental responsibility. This raises an important question: If such a mutually beneficial reality were attainable, why haven't corporations pursued it independently of his assertions, and why is such a book necessary?
One of the more controversial assertions made is that extreme poverty could be eradicated, “save for a few war-torn nations like Afghanistan and some poorly-governed regions in sub-Saharan Africa”. The book overlooks the underlying causes of conflict and poor governance, missing a vital opportunity to connect these issues with the growth-at-all-costs mentality that the author is attempting to legitimise.
His chapter on activists is comically biased. He cherry-picks historical events to support the argument that activism is misguided and that stakeholder activism is much more effective. It is important to note, however, that in the particular engagement used to demonstrate how effective stakeholder capitalism could be, the voting support of BlackRock and other large asset managers was needed to pass, a point notably absent from his analysis. Effectively, the author is arguing for allowing activism that can be controlled by his company and other large asset managers.
The "solution" proposed in the book is simply to take the amount of investment needed for the UN's agenda for sustainable development, and divide it by the total amount of money currently invested in the world. “Only 1.6% of the money needs to be invested”. That's it, that's the solution, no analysis of the systemic obstacles to this investment, or analysis of what has prevented this investment from being made in the past. Just one simple percentage calculation, proposed as a solution.
The author ends his introduction with a well-known Irish joke of an American tourist visiting Dublin, asking for directions to Temple Bar: “I certainly wouldn’t start from here”, is the response. But “here”, the author argues, in the context of sustainability, is all we have and “we better get going”. However, I think it would have been more appropriate to introduce this book with an alternative punchline to that joke used in the west of Ireland, “you’re on the right road, sure enough, but you’re turned the wrong way”.
Overall Review
This book reads more like a promotion piece for the asset management industry than a book concerned with impacting the world in any meaningful way. While the author acknowledges some of the failures of the capitalist system, they stop short of dissecting the systemic mechanisms that have contributed to these shortcomings. Instead, they lean towards the concept of "more inclusive sustainable growth" as the ultimate solution. In doing this, the book chooses to ignore questions about whether sustainability should ever take precedence over profit and growth, or if they can coexist harmoniously without hard choices. Instead, the author assumes we can all wave the magical wand of “more inclusive, sustainable growth”, and these difficult questions and trade-offs will no longer exist.
The narrative aligns with the prevailing sentiment in the ESG movement, advocating that sustainability should primarily be pursued when it promises financial rewards. The author introduces an intriguing hypothetical scenario where companies, driven by financial interests, willingly embrace social and environmental responsibility. This raises an important question: If such a mutually beneficial reality were attainable, why haven't corporations pursued it independently of his assertions, and why is such a book necessary?
One of the more controversial assertions made is that extreme poverty could be eradicated, “save for a few war-torn nations like Afghanistan and some poorly-governed regions in sub-Saharan Africa”. The book overlooks the underlying causes of conflict and poor governance, missing a vital opportunity to connect these issues with the growth-at-all-costs mentality that the author is attempting to legitimise.
His chapter on activists is comically biased. He cherry-picks historical events to support the argument that activism is misguided and that stakeholder activism is much more effective. It is important to note, however, that in the particular engagement used to demonstrate how effective stakeholder capitalism could be, the voting support of BlackRock and other large asset managers was needed to pass, a point notably absent from his analysis. Effectively, the author is arguing for allowing activism that can be controlled by his company and other large asset managers.
The "solution" proposed in the book is simply to take the amount of investment needed for the UN's agenda for sustainable development, and divide it by the total amount of money currently invested in the world. “Only 1.6% of the money needs to be invested”. That's it, that's the solution, no analysis of the systemic obstacles to this investment, or analysis of what has prevented this investment from being made in the past. Just one simple percentage calculation, proposed as a solution.
Displaying 1 - 4 of 4 reviews