My guest this week is Katherine Collins, who is the head of sustainable investing at Putnam Investments, a portfolio manager on two of Putnam’s sustainable investing funds, and the author of the book The Nature of Investing: Resilient Investment Strategies through Biomimicry.Our conversation is on the ins and outs of ESG and impact investing, a young but increasingly common topic in the investing world. This is challenging ground for me as a quant, because the data available is so new and limited—so Katherine’s perspective was very helpful as we continue to learn. Given the importance of this topic, I’m also searching for more guests with both positive and negative views on the role of ESG in an investing framework, and welcome suggestions for future guests. Please enjoy my conversation with Katherine Collins.For more episodes go to InvestorFieldGuide.com/podcast.Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.Follow Patrick on Twitter at @patrick_oshagShow Notes1:29 - (First Question) –Mechanical vs human judgement processes4:21 – ESG, and the non-utility portion of it.7:11 – Data behind the objective function that is different from returns12:34 – What are the most interesting data sets16:04 – How does she determine what factors to target19:31 – Why do we know that diversity of experience/opinion/background is good for a company21:30 – The social vertical and how it plays into her investing system and better returns25:51 – Corporate Sustainability: First Evidence on Materiality27:00 – Environmental factors and the issues that jump to mind29:48 – Importance of signing the UNPRI and is it just box checking32:33 – Data for companies on the solution oriented companies34:53 – Why doesn’t the market recognize the Alpha36:17 – LP interest in ESG investing38:25 – How other groups of investors approach ESG40:03 – Best practices at business making an impact in ESG44:01 – Unique or interesting tactics in environmental46:33 – Who is the biggest opponent or position in opposition of ESG47:37 – Most interesting edge48:20 – Playbook for business managers thinking about social for the first time49:59 – Measurements vs principles/values51:21 – Advice to quants trying to use ESG in how they gather data53:04 – Most memorable encounter with a company through the lens of ESG53:53 – Where to learn more about ESG54:50 – How much role regulation plays in the future of business sustainability56:30 – Any more lessons from her research into natural systems57:05 – Kindest thing anyone has done for herLearn MoreFor more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclubFollow Patrick on twitter at @patrick_oshag