STUDIO!SUS: In the early 1990 you
started publishing on sustainability issues. What was your motivation
to start working on sustainability?

Richard Sandor: I am a problem-solver. It became very apparent to me, that
pro – blems concerning the environment were getting larger and
larger. I did not believe that people were approaching those problems
the right way. I saw an opportunity in creating incentives to change
behavior rather than ordering people to change their behavior. I felt
that I could make some small contributions to change the way people
thought about environmental responsibility. I found it an exciting

STUDIO!SUS: Why should conventional
investors adopt the concept of sustainable investments?

I think it will pay off. I think that sustainability is a viable
long-term business investment decision. I don’t think a company is
viable over the long term, if it only thinks about profitability and
doesn’t think about social and environmental issues.

STUDIO!SUS: How should a sustainable
company look like?

On the long run a company has to create value and not only financial
value but social and environmental value and ultimately investors
will be rewarded by those companies. People who work and run those
companies will be rewarded. If a com – pany only recognizes where the
problem lies, that’s not enough.

STUDIO!SUS: Could you give us an
example for a company you would call sustainable?

I would not put one versus the other and I would rather not pick one
because there are many. If you look at the indices there many of
them; some are better, some are worse. I think the import thing to
recognize is that we change the behavior of companies and that
investors change their behavior before they buy their stocks. I am
not so worried about achieving the perfect; I am more concerned about
changing the way people think. The companies, who are members of the
Dow Jones Sustainability Index (www.sustainability-indexes.com) and the Chicago Climate Exchange (www.chicagoclimatex.com),
are moving into the right direction. Examples are American Electric
Powers, Ford or Rolls Royce.

STUDIO!SUS: Is sustainable investment
enough to make the economy sustainable or is it just a way for
investors to feel good?

The ability of shareholders to change companies behavior is enormous. We
saw the negative view-point of socially responsible investment in the
case of apartheid in South Africa. Investors made their voices known
so much, that I think they were able to change behavior. In addition
to these negative filters people can have influence with positive
filters. Therefore we have to educate investors to ask their brokers
and investment bankers: What are you looking at? Why choose this
company in the next five years? Have you looked at its environmental
performance, have you looked at its corporate governance, have you
looked at how many women are employed on a senior level, have you
looked on the diversity concerning the countries of origin, have you
looked at employment practices and the way they treat the people? If
brokers start asking companies these questions, they can change
behavior, because companies care about their share-prices.

STUDIO!SUS: There are some critical
voices arguing that sustainable investment will result in stabilizing
an unsustainable economy. What would you answer?

I am always driven by the fact that the perfect should not be the enemy
of the good. Those critiques hurt the good. It is a dangerous
thinking when someone argues to better wait the total collapse
instead of moving into a good direction. The perfect system is always
the enemy of the good. It is like waiting for one billion people to
die from aids before starting to do something.

STUDIO!SUS: You said, incentives are
more powerful for changes in people’s behavior than orders. Do you
think governmental regulations are dispensable for these changes?

There is a role for both. Certainly there is a role for regulatory activity
and in some instances it has worked very well. I supported for
example the acid rain program in the US. But I believe that
incentives and creating private ownership of the environment is the
most effective way to solve the environmental problem, which is
critical for me as well as for your generation. When you own
something, you behave different. This fits with human nature.

STUDIO!SUS: Do you think that the
ratification of the Kyoto Protocol will induce a significant market
for trading emission rights? What are the critical issues?

The market will be very big. Enormous amounts of wealth will be created
in environmental services: for example the change of a fossil fuel
driven car to a renewable, alternative fuel. These markets will
create job-opportunities for people who create investments. The
dimension of this transformation is comparable with technology in the
90ties or manufacturing following the Second World War.

STUDIO!SUS: Do you think that the
market for emission rights is attractive only for industrial
companies and countries or could this market be attractive for
financial investors as well?

They will attract a lot of financial players. As a matter of fact, right
now investment banks like Morgan Stanley and Goldman Sachs are
involved; Barkleys and Deutsche Bank are getting into the space.

STUDIO!SUS: Can you give us a recent
example that could motivate us students for sustainable development?

Sometime you will have the chance to get financial gains, but you cannot
participate on something that positively affects the world. In some
instances you can do transformation and positive work, but there is
no financial gain. Sustainability provides a unique opportunity to
create value for both you and society. There is an economic value
that you can create. You have the chance to transform the world. And
you have the chance to have financial gains while doing it.

Richard L. Sandor ist CEO der Firma Environmental Financial Products,
und PD am Kellogg Graduate School of Management Northwestern
University. Er ist second vice Chairman des Chicago Board of Trade
und Verwaltungsratsmitglied folgender Institutionen: Central and
South West Corp., Center for

Sustainable Development in the Americas und SAM (Sustainable Asset Management) in
Zürich. 2004 erhielt Richard Sandor den Ehrendoktortitel der ETH