Communication for Sustainable Development

Sarasin predicts end of "sustainable" investment

Bank Sarasin has predicted the end of the terms sustainable and ethical as both investment philosophies become mainstream.

Cover for the Sustainable Business Booklet.Image via Wikipedia

The private bank said sustainability had been part of its corporate philosophy for 20 years.

Burkhard Varnholt, chief investment officer at Bank Sarasin, said there had been "stellar growth " in sustainable investment.

He said: "It is true that ethical and sustainable investing has become something of a zeitgeist and I think the terms will disappear in five years because it will become mainstream.

"It is the idea whose time has come.

"As we enter into a world that is increasingly a global village the opportunities for people to cut corners are shrinking rapidly.

"Companies and investors are quickly realising they have to strike this balance if only for selfish reasons."

Many Sarasin clients avoided losses from Greek or Spanish bonds as both countries failed its sustainability country analysis and BP shares.

Mr Varnholt said: "The benefit of sustainable investment comes from avoiding really big losses.

"BP was one of those examples. We had never invested in BP because it never managed to meet all the investment criteria we have.

"We have less complete wipe outs than a passive investment fund does."

Mr Varnholt said the investment by many ethical and sustainable funds in BP struck him as a beginners mistake.

He said: "I am not totally surprised. Not everything that claims to be green is really green inside

"My advice is to check what is inside is what it claims to be inside."

Mr Varnholt said he was a strong believer in thematic investments and tipped water funds as an area of growth with China looking to build 400 desalination plants.

He said: "Investment in water is so inevitable that if you have patience you cannot go wrong. I think you will see it explode in the next few years."
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