In a world where ESG is turning from a differentiating strategy to an exercise of compliance, what could move the needle further towards a sustainable and inclusive financial system?

Ideas about degrowth, new forms of financial instruments and tightening regulation are directing us the right way, but an undercurrent of short-termismand growth as a purpose are still pushing through.

Enter ultra long term investments (ULTi).

Investors, Corporations and companies are under the obligation to provide value for their stakeholders. But when?

When a sole company owner dies, their company lives on, being passed down according to inheritance laws in its respective country, along with its assets, obligations, employees and clients. It is an immortal entity and as such needs to provide value for stakeholders indefinitely and not quarterly.  This applies not only to companies. Institutions lsuch as universities, hospitals, religious institutions, sovereign wealth funds have inherent ultra long term objectives.

Society would definitely benefit from investing in ultra long term assets as it will ensure its sustainability and resilience.

However, making decisions for the ultra long term is challenging, for a number of reasons.

1. The future is unknown and unpredictable. Looking back at the past century it would be hard to guess the end of it from its beginning. Major shifts in politics, climate and technology may alter paths going forward as well.
2. The financial system still judges performance on a quarterly basis and values assets on their NPV.
3.  Present bias affects decision makers on every level- from daily personal decisions to strategic implementation.

Nevertheless we do find entities that manage to survive and thrive over centuries. Among them civilizations, financial institutions and corporations. If we identify the commonalities between them, this may help inform investment strategies for the ultra long term.

When looking through different lenses some surprising themes emerge. Anthropologic view of enduring societies, behavioural economics strategies to averse present bias and actuary andrisk assessment strategies all boil down to several effective strategies.

1. Present agency for future interests
2. Creating future enhancing default rules
3. Double scenario analysis

Allocating assets to ultra long term strategies or creating an ultra long term asset class, can direct capitalism to the way we’d like to seee it, an economic system that supports human life on earth and healthy sociaeties within it.