By David Seekell: The biggest change since moving from academia to asset management is that I started getting advertisements for private jets in my Instagram feed. At least that is what I tell people. The algorithm did, in fact, detect when I left a tenured post as an associate professor of ecology in 2022 to join a Stockholm-based investment boutique, but it misunderstood almost everything else.
Scientists move into finance, but usually soon after completing their education. I moved after building a successful university research career. The timing was unconventional, but the intellectual transition felt natural.
My research covered early-warning signals of ecological tipping points, carbon cycling in lakes, and water resources. I ran experiments on whole ecosystems, where many processes were interacting at once and across different scales. The results were directly relevant to policy and management. I am proud of that work.
However, research often takes a long and uncertain path before it makes a difference, if it does at all. I wanted direct influence over outcomes. I reasoned that the best way to do that was to get leverage, and the best way to get leverage was to go to where the money is. That is why I quit university research to pursue a new career in asset management.
Ecology and investing are more similar than you think
People are surprised when I tell them that ecology and investing are similar. Both are integrative fields. Although the jargon differs, the habits of thought are strikingly similar. Both require us to combine incomplete and uncertain evidence, understand interactions, and examine individual parts in detail without losing sight of the big picture.
Even the quantitative tools rhyme. Ecologists use portfolio concepts to understand how diversity stabilizes a system and time-series methods to spot changes before a tipping point. Finance applies related ideas to diversification, risk, and market behavior.
What drew me to asset management
Companies are among society’s largest users of natural resources. They are also among the largest developers of human capital outside public education. Investors have access to the people making decisions about both. That was the attraction.
Influence does not come from access alone. Investors earn it by understanding a business, finding an issue relevant to its development, and bringing management something more useful than a demand. The best ESG work starts with the economics of the firm.
Investor relations changed my perspective on sales
In academia, I feared salespeople. I assumed they wanted to drain a research grant while I stood powerless to negotiate.
At our company, the investor relations team works directly with clients and prospective investors. I have been impressed by how its professionals create value for both clients and the company. Explaining a strategy clearly is not something added after the “real” work. It tests the logic, reveals client needs, and creates feedback that improves the process.
I join them whenever I can because observing their work has made me a more effective communicator. I think academics could have more impact outside academia if they learned to communicate and build relationships with the same skill and care that our IR colleagues demonstrate every day.
False precision in sustainability reporting
I have been less impressed with the EU’s sustainability disclosure rules. Their aims – comparability, accountability, and transparency – are admirable. The problem is that they demand precise answers to vague questions.
Sustainability is not a single outcome. For example, the 17 Sustainable Development Goals cover dimensions that frequently conflict or require trade-offs. A project may advance clean energy while putting pressure on biodiversity or local water resources. Choosing among those outcomes is a normative decision: whose interests count, over what period, and how should one harm be weighed against another benefit? A simplified metric can produce a number once those choices have been made, but it cannot make them objective or guarantee that the result is useful.
Even apparently straightforward physical measures carry enormous uncertainty. In one study, ten colleagues and I used specialized equipment to measure methane emissions from a small Swedish lake. Even after that effort, the uncertainty interval was almost as large as our best estimate. Yet companies that have only recently built climate-accounting programs report single emissions estimates across factories, suppliers, and logistics networks, often without expressing any uncertainty. Portfolios aggregate those figures further, and we are expected to present the result to clients as fact and use it to make investment decisions.
SFDR’s principal adverse impact (PAI) indicators compound the problem. The reporting template encourages fund managers to set targets against these simplified metrics. Once a metric becomes a target, firms begin managing the metric itself, and it can cease to adequately capture the underlying sustainability issue. Economists call this Goodhart’s law. The result is confusion rather than clarity.
Finding leverage through engagement
My engagement begins with companies, not themes. I identify firms where ESG momentum has a credible chance of contributing to value, then focus on company-specific issues that matter to the business and that I have a plausible chance of influencing.
This reverses the process of choosing a popular ESG topic and contacting a long list of firms that fit it. I favor quality over quantity because engagement only matters if it changes something.
Recently, two real estate companies agreed to begin biodiversity due diligence following my engagements. A biotechnology firm adopted human rights and anti-corruption policies. At another real estate company, I mapped its assets against current water shortages and forecasts of future scarcity. Management then began treating water as a sustainability issue.
The funds I work with typically own less than one percent of the companies concerned. Despite those small stakes, our engagement contributed directly to changes that can strengthen risk management, sharpen strategy, and support long-term value for clients.
Companies listen because I begin with their business, bring relevant analysis, and frame ESG as a source of value creation rather than a list of accusations.
It is a special feeling to be the first person to know something, even if it is a small or obscure thing. I loved that part of academia. What I get from asset management is different. Sometimes one owner voting no is enough to make a board think again. Even a small shareholder can influence a decision at a much larger company. Seeing that happen, alongside colleagues who bring very different skills to the work, is hugely satisfying. It is a trade I would make again without hesitation.
David Seekell is Head of Sustainable Investing for a Stockholm-based investment boutique. He earned a Ph.D. in Environmental Science from the University of Virginia in the United States. He has published 73 peer-reviewed scientific articles on ecosystem tipping points, the carbon cycle, biodiversity, and global food and water security.
Link to article: https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2022JG007185
Research Summary: https://eos.org/research-spotlights/adding-oxygen-to-a-lake-to-explore-methane-emissions
