Eccles is professor of management practice at Harvard Business School. Serafeim is assistant professor of business administration at Harvard Business School.
Company executives and institutional asset managers are increasingly working sustainability into their strategy and operations. Similarly, institutional asset managers are doing the same in constructing their portfolios. Yet both groups are doing this relatively independently of each other. These two groups should and will be seeing more of each other as sustainability matures.
As it stands, engagement between executives and institutional investors is limited to stylized interactions, such as quarterly calls, investor visits, and annual meetings. These interactions involve a small number of people representing each side of the conversation -- executives on the company side, and portfolio managers and analysts on the investor side. Substantive discussions about the long term almost never happen. They should.
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