When Hedgehogs Rule Sustainable Investing

Jan Anton van Zanten ()
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Jan Anton van Zanten: Osmosis Investment Management NL

Chapter 4 in Big Money, Better World?, 2026, pp 35-59 from Springer

Abstract: Abstract Sustainable investing is dominated by single-idea thinking – and single ideas make poor guides to a complex world. This chapter introduces three types of hedgehog investors, each rallying around one overarching approach to sustainability screening, and each falling short in a different way. The specialist hedgehog fixates on a single issue – greenhouse gas emissions, water use, or green revenues – while sidelining everything else. The filtering hedgehog casts a wider net, evaluating companies across many ESG factors, but filters them all through a single lens: financial materiality. The result is a system where tobacco firms can rank at the top and solar energy companies at the bottom – clearly missing the point of sustainable investing. The accountant hedgehog goes further still, converting all sustainability impacts into monetary values. This is a powerful idea in theory, but one that creates an illusion of comparability, obscuring trade-offs and risking the legitimization of harm. Each hedgehog offers simplicity and structure. But each misaligns investment portfolios with the very sustainability goals they claim to support. Moving beyond them requires a fundamentally different approach – one that embraces the plural, interconnected nature of sustainable development rather than reducing it to a single metric.

Keywords: ESG ratings; carbon emissionsgreen revenues; financial materialityimpact monetization; sustainability ratings (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/978-3-032-32442-9_4

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