While I can’t compare myself to the professionals on Wall Street, I have picked up that those investors often seek some type of catalyst to produce excess return. With an estimated $20 trillion of professionally managed assets around the world categorized as ESG investing, it would be rational to expect a dialogue about levers and practical solutions that can realize market opportunities. But that is just it, the conversation still seems to be painfully focused on problem definition and disclosures.

It has been almost 20 years since the term ESG was first used in a study entitled “Who Cares Wins”, which also formed the basis for the launch of UN PRI (UN Principles for Responsible Investing). Over 1,600 institutions have committed to the global initiative, representing over $70 trillion assets under management. Together with studies showing that good financial performance is associated with corporate sustainability, ESG integration was increasingly seen as part of fiduciary duty.

To understand what happened then and where we are today, it might make sense to look at “smart” capital flows into early stage and growth companies within the ESG sector. Most recent investment examples of leading investment firms would indicate that data accounting, reporting and compliance are the prevailing business strategies for capitalizing on the staggering amount of ESG committed capital. To understand the investment thesis and presumed catalyst, consider that stakeholders primarily include investors, bankers, large customers, and consumers who are looking for ESG data and information to make their investing, lending, and purchasing decisions. The corporate sector is largely ignored as a primary stakeholder and the market is continuing to focus on the effects, rather than underlying causes.

Perhaps the difficult truth is that large parts of the investment community are unified around adapting to ESG and sustainable challenges, rather than exploiting opportunities within mitigation and corporate sustainability. Given the capital committed to ESG investing it should be clear that this is not a viable approach. Current investment activity in the ESG sector is both sub optimal and leaves significant financial opportunity. This should inherently lead to an unprecedented demand from corporates to find practical solutions for improving their ESG profile and there are few companies that are positioned to fill and capitalize on this market opportunity. The opportunity set for corporates are broad but require external expertise along with internal resources. Renewable energy, both onsite and offsite, is an instrumental part of any corporates’ portfolio of solutions.

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Ren Energy, born out of Nike’s global renewable energy program, provides a unique solution.