How She Leads is a regular GreenBiz feature spotlighting the career paths of women with influential roles in sustainable business. In this edition, Maya Albanese interviews Erika Karp, managing director and head of global sector research at UBS, a financial services company that offers wealth management, asset management and investment banking services.
Karp, who will be a featured speaker at the 2013 GreenBiz Forum in New York on February 20-21, is in charge of two dozen of the investment bank’s most senior analysts and chairs the firm’s global investment review committee.
Karp was named one of the nation’s “Top 50 Women in Wealth” by AdvisorOne. She is a founding board member of the Sustainability Accounting Standards Board, a member of the program design advisory council for Harvard Business School's executive education program on "Innovating for Sustainability” and a member of the World Economic Forum. Her work has been featured by Investor Relations Magazine, the Financial Times, Bloomberg BusinessWeek, Wharton Magazine and Forbes, to which she is a regular contributor.
An edited transcript of the conversation follows.
Maya Albanese: Could you explain your career leading up to UBS?
EK: As an undergraduate at the Wharton School, I studied economics while a lot of people were studying finance. I wanted to understand history and behavioral finance and develop a framework for thinking. After school, I decided to go into sales. If you can sell, or articulate the value proposition that you have to offer, then you will always be able to make a living. I went to IBM and sold telecommunications systems for a while. I learned a lot there about the value of client partnerships and long-term relationship management. Next, I wanted to pursue more work in finance and be in New York, so I went for an MBA at Columbia. I went on to do institutional equity sales for Credit Suisse First Boston on Wall Street before eventually being recruited to work at UBS about thirteen years ago.
MA: “Sustainability” is not in your title, but how is it integral to what you do?
EK: I am the head of Global Sector Research at UBS, which means I manage a team of strategists and analysts around the world and get them to collaborate and provide the best possible predictive insight to our clients. When you’re managing a diverse team of really senior thought-leaders, you have to be creative to figure out how to optimize their coordination. I need to ask all kinds of different questions and think long-term. Understanding corporate sustainability, or what I like to call ESG (Environmental and Social Governance) analysis, is just systematically and creatively pursuing different avenues of inquiry and systematically asking long-term questions. Some say that these long-term factors are not important to finance, but I argue that they are. They affect both risk and opportunities. How do you measure a company’s ability to leverage its human capital? You can get signals from its employee retention rate or its ability to understand the community in which it operates. Sustainability is also to some degree a proxy for corporate quality.
MA: Why are you passionate about sustainable finance? Was there an "aha" moment?
EK: There were a few moments of truth when I realized that I am naturally a sustainable investor with a skew toward long-term thinking. I happen to care about the environment, social justice, and behavioral finance; and you can’t completely separate personal values from how you do your job. Another moment was probably when my language started to evolve. Language is so powerful and can be used in a really engaging, constructive, and positive way, or it can be used in a very divisive and destructive way. The way we use words in the financial industry is especially important, because value judgments can alienate people, or they can stimulate dialogue. For example, I typically don’t use the term SRI (Socially Responsible Investment), because then I may be implying that all the other investments are irresponsible. It is also unfortunate when the term “sustainable investment” is just seen as something green for tree huggers; that’s way too narrow in scope.
Photo of Erika Karp courtesy of UBS
Next page: Sustainability in the UBS corporate structure