Georg Kell: ESG Financial Analyst and Designer of the Global Sustainability Agenda
Since 2011, Ethisphere Institute annually counts the German national amongst the ‚100 Most Influential People in Business Ethics‘, Fergal Byrne calls him a „key figure at the heart of the development of today’s sustainability agenda“. When Georg Kell worked on Kofi Annans renown speech “A Global Compact“ almost 20 years ago, he didn’t yet know that what was originally meant as a wake-up call and appeal to the experts, executives and politicians of the World Economic Forum in Davos, would turn into the world’s largest and most influential corporate sustainability initiative of our time under his leadership. Today, Kell sees the Global Compact’s biggest impact in having reshaped global views and mindsets on CSR. He says the biggest transformative power of the sustainability agenda is now finally awakening through a change of thinking in the financial world. It’s about time.
Pioneer of the Modern CSR Agenda
Kell studied engineering and economics at TU in Berlin, where he then started his career at Fraunhofer Institute for product technology and innovation. He earned his PhD at St. Thomas Aquinas College in New York City. After having worked as a financial analyst in various African and Asian countries, he joined the United Nations in 1987.
The UN Global Compact (UNGC), led by Kell until 2015 has today been adopted by over 9,500 companies in over 160 countries to anchor CSR and to discuss a socially and environmentally sound globalization. During his time at the United Nations, Kell established the UNGC as a cross-sector forum for sustainable practices and policies. The platform significantly contributes to not only implementing CSR within corporations, but also to continuously develop, disclose and share the concept. Besides the UNGC, Kell moreover supervised the conception and implementation of parallel initiatives, such as the Principles for Responsible Investment (PRI), the Principles for Responsible Management Education (PRME) as well as the Sustainable Stock Exchange (SSE) Initiative.
|The United Nations Global Compact is the worldwide largest and most important initiative for responsible business practice. Based on 10 universal principles and the Sustainable Development Goals (SDGs), it pursues the vision of an inclusive and sustainable global economy for the good of all people, communities and markets, today and in the future. (UNGC)|
Moreover, Kell is Chairman of Arabesque, an ESG Quant fund manager that uses self-learning quantitative models and big data to assess the performance and sustainability of globally listed companies. Its investment technology processes over 100 billion data points to select an investment universe of equities with the aim of delivering superior returns, integrating Environmental, Social, and Governance (ESG) information with quantitative strategies. This offers long term returns and a significant reduction of portfolio risks.
System Change and the Power of Ideas
Only when companies take over ESG factors into their strategy and operations and realize that it pays to create sustainable solutions instead of being a root cause of global problems, a sustainable transformation can be successful. Responsible leadership, he says in an interview with the UN News Center, means “connecting all the dots (for) you know your own future financial success depends on the success of the market where you invest”. In the interplay of global stakeholders, business plays a key role when it comes to the rewriting of old paradigms in this regard. For Kell, the systemic transformation of markets is at the center of a successful sustainability agenda. The bis challenge and the real test lies in the reality that institutions and political systems are only changing slowly. Business must operate in frameworks which are, in the face of digitalization, technological development, planetary boundaries and complex, changing government structures outdated. So, the path to transformation is still oftentimes a chaotic and not always forward-oriented one. He for example calls out Germany’s subsidies of diesel consumption to be a “perverse outdated industrial policy”. We do not have a pre-drawn map to navigate the transformation we’re facing, but for Kell there’s no arguing: “we have to move from an industrial era model to a future-fit model”. Therefore, it needs courageous visionaries and leaders who, in the presence of an unknown future, do not fear to follow ambitious goals. We should not forget: Out of an inspirational speech – with the right vision and leadership – can emerge a network of over 9,500 corporations which is able to shape the awareness of an entire generation: “The strongest power humanity has is idea power”, says Kell.
Wake-up Call of the Financial World and the Acceleration of the Sustainability Agenda
Kell sees the true transformational power to move towards a sustainable system in the distribution of financial capital. In Fergal Byrne’s Podcast „The Sustainability Agenda“ , he calls 2018 to be the year of alignment between sustainable investment and responsible business practices. As one of the most inert players, the broad financial world has, in their obsession with short-term profits, tried to escape the ESG debate. Only a study in 2015, showing a positive correlation between ESG performance and long-term stock evaluation trigger a rethinking according to Kell: The wake-up call. In this development Kell sees the next big “boost” of the sustainability agenda. The PRI is growing fast, a variety of other initiatives is developing and with new financial products a new generation is realizing they can personally invest according with their values. The financial world is catching up in regard to the sustainability agenda and, thanks to quick technological developments, in a way that might have it overtake and significantly shape it: “Once finance speaks and relocates capital, then the sustainability issue really goes to scale and will be accelerated and hopefully policy makers will also realize about time to adjust the framework conditions”. Ultimately, we will need political leadership and a regulatory playing field that allows us to operate beyond the boarders of an industrial system.
At the moment, Kell is very much invested into the question of how to make the alignment between sustainable investing and corporate good practices happen in practice, and how to create transmission mechanism most effectively to bring it to scale as rapidly as possible. Because: We’re running out of time.
On November 14th 2018, Georg Kell will speak at the “8th International Conference on Sustainability and Responsibility: Responsible Leadership in Times of Transformation”. He will hold a laudatory for Robert G. Eccles, ESG & Integrated Reporting Pioneer and currently visiting Professor at the Saïd Business School at the University of Oxford, who will be awarded with the „Lifetime CSR Achievement Award 2018”. Join us and buy a ticket at: www.international-csr.org/icsr-ticket-information/
Website Georg Kell:
Articles, Interviews, Videos:
- Financial Times Artikel Georg Kell, Arabesque Partners, board vice-chairman by Sarah Murray, 28 Oct 2015
- Nordsip Artikel Georg Kell’s Arabesque: ESG is not a Fad, by Aline Reichenberg Gustafsson, CFA, 31 August 2017
- Nordsip Artikel A Breath of Fresh Air by by Aline Reichenberg Gustafsson, CFA, 10 September 2018
- Podcast The Sustainability Agenda Episode 51 – Interview with Georg Kell, Fergal Byrne, 2 August 2018
- Interview on Big Data and Sustainable Investing on Swedish TV, “Exclusive Interview with Sustainability Heavyweight Georg Kell”, 18 May 2018 on DiTV, Sweden
- Video Interview Sustainable Investing Meets Corporate Sustainability Video Interview “Sustainable Investing Meets Corporate Sustainability”, org, 07 November 2017
- Interview für Verantwortung-Magazin.de, Kai Baum, 1 November 2017 Die Finanzwelt muss noch weiter aufholen
- UN News Center, Interview with Georg Kell, Executive Director, UN Global Compact