The Future of Responsible Investment

Abstract

The enhanced future path of responsible investment will be marked with a strong but wise symbiosis of artificial intelligence, automation, and long-term human judgment. AI and automation are expected to take over data-heavy aspects of ESG and impact investing, machine-learning algorithms will continuously run satellite imagery, IoT stream of feeds, social-media sentiment, regulatory filings and social scandals, in order to calculate dynamic carbon footprints, detect greenwashing, predict climate-risks and assess social scandals, with amazing speed and sensitivity. Portfolio construction will also be made easier through automation, enabling hyper-personalised responsible investment products, e.g. green bonds with internal carbon-pricing logic, actively ESG-tilted ETFs or impact-linked loans, whose rates change according to measured sustainability KPIs. Distributed ledgers and blockchain will provide the unalterable traceability of green claims, carbon credits and sustainable supply chain and thereby reduce fraud and boost investor confidence.