Sustainability: operating system of the financial markets instead of pure ESG rating

With the publication of the new Springer volumes Sustainable Asset Management and Sustainable Wealth Management, a development that the financial industry has long repressed is gaining momentum: «Sustainable finance is no longer a niche topic for idealists or regulatory compliance departments. It is becoming the innovation driver of modern capital markets. Both publications are written exclusively by women - women from the wealth management and asset management industries,» explain the two editors Dr. Marta Ra and Dr. Karen Wendt.

This becomes particularly clear in the article by Rosa Sangiorgio from RSG Impact Investing in Sustainable Asset Management «The Role of Extra-Financial Data in Shaping a New Investment Landscape» (The role of non-financial data in shaping a new investment landscape). Their analysis strikes a nerve in the industry - because it challenges one of the most dangerous assumptions of traditional financial models: the idea that the future will essentially look like the past. However, this is exactly what many traditional investment approaches are based on. Historical data series, past volatilities and old correlations still form the foundation of large parts of asset management today. But in a world of geopolitical disruption, technological disruption, climate risks and social transformation, this is no longer enough.

Sustainability data must make a material contribution

Financial data shows where a company has been. Extra-financial data shows where it is heading. CO₂ exposure, governance structures, supply chain risks, working conditions or natural dependencies are not additional moral information. They are leading economic indicators. Ignoring them means systematically ignoring key risks and opportunities. To put it provocatively: ESG has failed - at least where it has only been practiced as a tick-the-box exercise. This is because many ESG approaches still suffer from a fundamental problem: they generate ratings but no insight. Standardized scores alone are not enough if they are not supplemented by different data sources, alternative data sets and machine learning methods. Sustainability data must make a material contribution to risk management and the prediction of future price developments. Otherwise they will remain regulatory decoration.

Classic models are being expanded

The real revolution therefore begins where sustainable finance merges with quantitative investment models. The classic models of modern portfolio theory - from Markowitz and Black-Litterman to the Fama-French five-factor model - are not being replaced. They are being expanded. The industry is increasingly moving towards a sixth factor: transformation and sustainability capability. This is because companies that use resources efficiently, anticipate regulatory risks, manage human capital better and develop more resilient business models have structural competitive advantages in the long term. Sustainability is therefore not a contradiction to performance, but a prerequisite for it.

At the same time, the ownership structure of global assets is also changing. The «Great Wealth Transfer» means that enormous assets are being passed on to a new generation of investors - and women are playing a central role in this. More and more female investors are no longer thinking exclusively individually, but like family offices: across generations, strategically and systemically. It's not just about returns for their own portfolio. It's about the long-term preservation of family wealth, stability for future generations and, increasingly, the question of what impact capital allocation has on society and the planet.

Real impact, especially in private markets

This way of thinking is fundamentally changing the investment process. Impact investing will therefore become one of the most important topics in the coming years. But here too, more honesty is needed in the debate. As Désirée Dosch explains in her chapter on «Impact Investing: A Gender Lens View» real impact is created primarily in private markets. This is where new capital is made available. This is where new technologies, infrastructure projects and sustainable business models are created.

In the secondary market, on the other hand - i.e. on the stock exchanges - a share usually only changes hands initially. No new asset value is created and often no direct additional social impact. Many public impact narratives therefore need to be viewed in a much more differentiated way.

Conclusion

The future of asset management will therefore not be decided by simple ESG labels. It belongs to investors who combine data intelligently, recognize new risks earlier and understand sustainability not as a moral issue, but as an information advantage. Or to put it even more clearly: The most successful investors of the next decade will not be those who communicate sustainability the loudest. But those who model it most precisely.

About the books

Sustainable Asset Management and Sustainable Wealth Management by the editors Marta Ra and Karen Wendt have been published by Springer Nature. They were presented last week in Zurich with all the authors. Both books are part of the Sustainable Finance book series https://link.springer.com/series/15807/books.

Click here for the individual titles:
- Sustainable Asset Management: Wendt, K. Ra, M. (2026)
https://link.springer.com/book/10.1007/978-3-032-05659-7
- Sustainable Wealth Management Wendt, K. Ra, M. (2025)
https://link.springer.com/book/10.1007/978-3-032-02530-2

The names of all authors:
Natalie Baki, Désirée Dosch, Arlette Espinosa, Sabrina Failo, Emma Farrell, Christina Goltzsche, Sabrina Herold, Céline Kohler, Tina Minci, Marta Ra, Rosa Sangiorgio, Barbara Schreier, Monika Seppi, Karen Wendt.

This article originally appeared on m-q.ch - https://www.m-q.ch/de/nachhaltigkeit-betriebssystem-der-finanzmaerkte-statt-reines-esg-rating/