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by Patrick O’Shaughnessy

My guest this week is Katherine Collins, who is the head of
sustainable investing at Putnam Investments, a portfolio manager on two of
Putnam’s sustainable investing funds, and the author of the book The
Nature of Investing: Resilient Investment Strategies through Biomimicry.

Our conversation is on the ins and outs of ESG and impact
investing, a young but increasingly common topic in the investing world. This
is challenging ground for me as a quant, because the data available is so new
and limited—so Katherine’s perspective was very helpful as we continue to
learn. Given the importance of this topic, I’m also searching for more guests
with both positive and negative views on the role of ESG in an investing
framework, and welcome suggestions for future guests. Please enjoy my
conversation with Katherine Collins.

Show Notes

1:29 – (First Question) –Mechanical vs human judgement

4:21 – ESG, and the non-utility portion of it.

7:11 – Data behind the objective function that is different
from returns

12:34 – What are the most interesting data sets

16:04 – How does she determine what factors to target

19:31 – Why do we know that diversity of
experience/opinion/background is good for a company

21:30 – The social vertical and how it plays into her
investing system and better returns

            25:51 – Corporate
Sustainability: First Evidence on Materiality

27:00 – Environmental factors and the issues that jump to

29:48 – Importance of signing the UNPRI and is it just box

32:33 – Data for companies on the solution oriented

34:53 – Why doesn’t the market recognize the Alpha

36:17 – LP interest in ESG investing

38:25 – How other groups of investors approach ESG

40:03 – Best practices at business making an impact in ESG

44:01 – Unique or interesting tactics in environmental

46:33 – Who is the biggest opponent or position in
opposition of ESG

47:37 – Most interesting edge

48:20 – Playbook for business managers thinking about social
for the first time

49:59 – Measurements vs principles/values

51:21 – Advice to quants trying to use ESG in how they
gather data

53:04 – Most memorable encounter with a company through the
lens of ESG

53:53 – Where to learn more about ESG

54:50 – How much role regulation plays in the future of
business sustainability

56:30 – Any more lessons from her research into natural

57:05 – Kindest thing anyone has done for her

Learn More

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