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Long-term perspectives in investment analysis

Short-term perspectives are one of the critical barriers for financial markets to integrate sustainability as a strategic issue lies in short-term perspectives.

Gregor Vulturius / Published on 28 May 2019

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Citation

Setterberg, H., Sjöström, E., & Vulturius, G. (2019). Long-term perspectives in investment analysis. Report. Stockholm Sustainable Finance Centre in collaboration with Swesif. https://www.stockholmsustainablefinance.com/publication/long-term-perspectives-in-investment-analysis/

Investment decisions that fail to consider long term issues can lead to the mispricing of risk. For example, a supplier of fossil fuel vehicles may suffer from emerging climate policies and regulations. Indeed, these risks are financial, but go unnoticed due to the short sightedness of the market, and at the expense of sustainability priorities. At the very core of investment decisions, sustainability and financial priorities are not aligned, despite the risk for mispricing assets.

This study initiated by Swesif and published on 28 May 2019, looked at how different actors in investment analysis define ‘long-term’ for themselves, and how they address long-term questions. The study arrives at a number of propositions to actors in investment analysis that could help bring more of a long-term perspective into the capital market conversation.

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