One can take no satisfaction from the current meltdown in the global capital markets. However, if there is any silver lining within that massive financial cloud, it is the fact that the entire episode should serve as a wake-up call for international investors. More precisely, it is also a trillion-dollar advertorial for the broader analytical power, perspective and insights, and potential added value of "sustainability-enhanced" investment analysis and strategies. (To be clear, I define "sustainability-enhanced" simply as "including a sophisticated analysis of environmental, social, and governance (ESG) risk and opportunity factors in one's investment analysis of companies"). If ever there were a "teaching moment" during which Wall Street's "Masters of the Universe" might finally be open to new analytical and investment approaches, it is now.

• Accelerating natural resource degradation, scarcity and constraints, driven to a significant extent by the explosive pace of industrial development, population growth, and urbanization, especially in emerging market economies;
  
• Dramatically increased levels of public and consumer concern and expectations for companies' ESG performance, turbocharged by unprecedented levels of information transparency with which to assess it;
  
• Tightening national, regional, and global regulatory requirements for stronger disclosure and company performance on "non-traditional" business and investment risks, including ESG ones;
  
• The expansion and intensification of both industrial competition and institutional investment into emerging markets, where ESG risks tend to be most acute;
  
• The ongoing revolution in information and communications technologies (the Internet, YouTube, Facebook, webcasts, bloggers, et al.), which has accelerated the emergence of a stakeholder-driven competitive environment with unprecedented transparency and, therefore, business risk;
  
• Growing pressures from international non-governmental organizations (NGOs), armed with new financial and technical resources, credibility, access to company information, and global communications capabilities with which to disseminate their analysis and viewpoints;
  
• A substantial reinterpretation and broadening of the purview of legitimate fiduciary responsibility to include companies' performance on ESG matters; and
  
• An institutional investor base that is increasingly sensitized to ESG issues, newly equipped with better information, and willing and able to act on its concerns.

1. Addressing sustainability factors is irrelevant or even injurious to risk-adjusted financial returns.
   
2. It is very likely a breach of fiduciary duty to incorporate sustainability factors into investment strategy.
   
3. There is no academically credible evidence to support the sustainable investment thesis.
   
4. Sustainability and other "extra-financial" analyses are less rigorous and more arbitrary than traditional investment analysis.
   
5. All SRI/sustainability research and investment approaches are essentially the same, and are unhelpful at best and financially harmful most of the time.
   
6. Unlike any other single set of investment factors, sustainability factors have to add value all of the time; otherwise they clearly must be intellectually bankrupt, worthless, or even harmful.

• The distressing tendency of most investment professionals to treat all Environmental and Social (ES) investment strategies as one homogeneous, undifferentiated - and generally unhelpful - mass.
  
• The "silent conspiracy of passive resistance" by most pension fund consultants, key gatekeepers who have until quite recently been virtually unanimous in their ignorance, indifference or even hostility towards ES factors. Unfortunately, few if any of sustainability investing's many critics have taken the trouble to test the veracity of their assertions, either through their own original research or by consulting the growing financial literature and empirical performance evidence in this area.
  
• The extraordinary deference of pension fund trustees and fiduciaries themselves, who tend to be unduly intimidated by their professional advisors, and sometimes, forget that the advisors and money managers work for them and not the other way around. In essence, the investment manager and financial advisor tail has been wagging the fiduciary dog. This has to stop.

• Traditional financial analysis cannot possibly provide a complete picture of companies' true competitive risks, value potential, and future performance. Typically, at least 80 percent of a company's value is now driven by "intangibles," which cannot be adequately captured in financial statements.
  
• "Management quality" is arguably the #1 intangible - the factor most critical to companies' competitiveness, profitability, and - ultimately - their share price performance. Assessing it accurately is, therefore, the "Holy Grail" of 21st century investing.
  
• ES issues are, and will remain among the toughest, most complex management challenges of the next 20 years. They are, therefore, a potent, forward-looking litmus test for a company's management quality and execution capabilities overall.
  
• Companies with superior positioning and performance on ES factors tend to be: More forward-looking and strategic; More agile and adaptable; Better managed companies in general; and therefore: Likely to be financial out-performers as well.
  
• ES factors will become even more important to companies' - and investors' - competitive and financial success over the next 3-5 years.
  
• Despite this, they are currently grossly under-recognized and under-researched by mainstream investors. Those prepared to do the necessary research and analysis on sustainability factors, therefore, will be rewarded with a significant information advantage.
  
• The most compelling investment solutions will be those that combine institutional - quality ES research with best-in-class fundamental and quantitative research, portfolio construction, and asset management capabilities. ES analysis should not be regarded as a substitute for traditional investment analysis, but rather as a powerful enhancement to it.

• It is secular, not values-driven. That is, it is focused primarily on those sustainability factors judged to have the greatest probable impact on companies' competitiveness and risk-adjusted financial performance.
  
• Individual company assessments are relative to industry peers, and invariably follow an in-depth analysis of each sector's competitive dynamics as viewed through the sustainability "prism."
  
• The weights given to each of the four sustainability "pillars" (and, indeed, individual sub-factors) differ, by industry, geography, and time, reflecting the very different impacts that different sustainability factors have in different industry sectors - and countries.
  
• Those weights are informed (but not strictly determined) by attribution analysis of their actual contribution to companies' share price and other financial performance indicators over the previous five plus years.
  
• Wherever possible, judgments about companies are taken only after live, real-time interviews with senior company officials, preferably from a variety of functional backgrounds (questionnaires are not utilized).
  
• The Innovest analysts conducting the interviews have experience in the industry sector concerned, the finance and investment industry, or both.