Promise and Peril of Big Finance

Abstract

This chapter explores the promise and peril of Big Finance as it uses finance to address Wicked Problems and the SDGs. It also provides the history of socially responsible investing (SRI). Its development parallels the history and evolution of the Wicked Problem framework. ESG (environmental, social, and governance) is fast becoming an industry standard for determining whether an investment achieves positive social and environmental returns. But does it work? Tom Van Dyck, managing director and financial advisor of Royal Bank of Canada (RBC), brings his perspective on ways companies can make money through mission by divesting from fossil fuel companies and investing in alternative energy. It is followed by a discussion of the challenges BNY Mellon and McKnight Foundation teams had in developing a new ESG product, building new expertise in climate finance, and the roles foundation staff and consultants played to ensure a product with integrity entered the market. The case illustrates the importance of Deliberate Leadership in building a trusted relationship among partners to balance fiduciary responsibility with a deep commitment to create a product that aligned with a philanthropic mission to address the SDGs. The chapter focuses on SDG 13 climate action and how it impacts systemic issues connecting the SDGs.