Interview Series: Michael Viehs

This week’s read time: 6 minutes

Welcome to the Green Digest Interview Series, our weekly feature showcasing conversations with the industry’s leading voices - CSOs, sustainability directors, and other senior professionals shaping the sustainability landscape. Each edition dives into their professional journeys, hands-on insights, and outlook on the challenges and opportunities defining corporate sustainability.

These interviews are designed to be quick, insightful reads, offering you actionable takeaways and a personal glimpse into the people leading the way. Stay tuned for stories, strategies, and lessons that matter to you.

PROFILE

This week’s guest:

Michael Viehs

Responsible Investment and Stewardship Expert, and Ecosystem Partner at KanataQ

Michael Viehs is a globally recognized expert in responsible investment, stewardship, and long-term value creation. Over nearly 20 years, he has advised leading asset owners and managers with $3T+ in AUM on cutting-edge ESG integration, bringing an evidence-based approach and deep familiarity with ESG data and investor needs.

Before joining KanataQ, he was Managing Director & Global Head of Sustainable Investing at Partners Capital, and previously Head of ESG Integration at Federated Hermes International; earlier, he was a researcher at Oxford’s Smith School. Michael is a Research Affiliate at the European Center for Sustainable Finance and lectures on responsible investing in Austria and Germany. He holds a Ph.D. from Maastricht University and has published in top academic journals.

You’ve built a remarkable career spanning academia, asset management, and stewardship - from Oxford and Federated Hermes to leading global sustainable investing at Partners Capital. For those less familiar with your work, could you walk us through the key chapters of your journey and what you consider your most meaningful impact so far?

My journey has really been shaped by the privilege of working with inspiring, smart people - many of whom became mentors. That allowed me to experience responsible investment from both the academic and practitioner sides very early on, before it became this megatrend that it is today.

The first defining chapter was my PhD in corporate governance and responsible investment at Maastricht University in the Netherlands with Professor Rob Bauer - an incredibly formative time. I then moved to Oxford to work with Professor Gordon Clark at the Smith School of Enterprise and the Environment, deepening my understanding of sustainability research and publishing academic work.

At some point, I realised I wanted to apply what I had been studying. That led me to London and Hermes EOS, where I engaged directly with senior executives and supervisory board members of major German corporations. Helping them understand and act on their most material ESG challenges, in a pragmatic, business-aligned way, was both fascinating and impactful.

Later, I moved into ESG integration within Federated Hermes, working closely with portfolio managers across asset classes ensuring they integrated financially material ESG factors in their investment decisions. And at Partners Capital, the leading OCIO business in London, I had the opportunity to influence hundreds of asset managers globally. Helping them strengthen their ESG practices across such a wide range of strategies with more than $3 trillion of assets under management is probably one of the biggest impacts I’ve had.

You’ve argued that the responsible investment space isn’t at a crossroads but rather in a healthy period of redefinition. What do you think the current debate is revealing about the true purpose and limits of ESG investing?

Having worked in responsible investment for almost two decades, I’ve seen the full cycle: from a time when ESG or sustainability were no thing in financial services to the surge of interest during Covid, when suddenly every investor wanted to talk about it. That period was incredibly busy for responsible investment professionals and, naturally, it also brought challenges: a flood of products labelled “green” without always having the substance behind them.

Regulators, especially in Europe, responded with frameworks like SFDR, which pushed the industry toward more precision and transparency. But these frameworks also came with their own issues. They were, and in many cases still are, often too prescriptive and not sufficiently nuanced for different asset classes such as hedge funds or absolute return strategies. Many rules simply did not reflect how the investment industry actually works.

After that came the Russian invasion of Ukraine, which triggered claims that “sustainable investing” does not work, as observers focused on the underperformance of so-called “sustainable” public equity funds due to their underweight in defence and energy but neglected the many impactful and profitable investments in the energy transition space, often backed by private equity investors.

What we have been seeing since then is not a backlash but a healthy recalibration. Products are being tested against the claims they once made. This moment reveals the true purpose and limits of responsible investing: ESG, I believe, was never meant to turn every investment product into a sustainable one. It is simply about integrating financially material factors - nothing more, nothing less.

The relationship between investors, policymakers, and beneficiaries is something you’ve described as “underexplored.” How can these stakeholders better collaborate to make responsible investment more effective and realistic?

When I say the relationship between investors, policymakers, and beneficiaries is “underexplored,” I mean that the voices of ultimate asset owners are still not sufficiently integrated into policymaking. At the end of the day, responsible investment should reflect their preferences and how they want their money to be invested, and how that aligns with their mission and values. Yet these preferences are often overlooked by both investors and regulators. It is encouraging to see that academics have started researching this topic in more detail, as documented here.

In my experience, every investor, institutional or individual, has a personal and often very nuanced understanding of what “sustainability” means. For endowments, pension funds, or family offices, this view is usually anchored in their organisational purpose. It’s hard to imagine any regulatory framework being granular enough to capture such diversity. The debate about whether defence companies can be considered “sustainable” illustrates this complexity well.

This is why I believe the decision about what counts as sustainable should ultimately rest with the asset owner. Their capital should be deployed in line with their own priorities; even if the market would classify those choices differently. At the same time, individual investors need protection through clear communication about the goals and sustainability outcomes of investment products.

You’ve also spent years bridging academia and practice. How do your academic insights influence the way you approach stewardship and ESG integration, and what lessons should investors take from research that often gets overlooked?

I’ve always believed in an evidence-based approach to investing; not just in regards to ESG, but across the board. Academic research offers powerful insights into behavioural biases, factor investing, and the material risks that can influence a company’s long-term performance. When ESG factors are genuinely material to a business model, they belong in that analysis just like any other driver of risk and return.

However, academic findings need to be interpreted with care. Investment decision-making is far more complex than a lot of studies can capture through their applied econometric models. If you want to inform your way of investing with academic research on sustainability, it is important to rely on credible, peer-reviewed papers.

Furthermore and most importantly, we should stop putting ESG on a pedestal, in both academia and practice. Material ESG issues are simply part of good long-term investing. Any portfolio manager ignoring governance quality, supply-chain risks, or other relevant factors would be neglecting their fiduciary duty. In my experience, most portfolio managers that I have worked with during my career integrate these considerations regardless of whether they run “sustainable” mandates. It is important, however, that portfolio managers have the necessary data at their fingertips to successfully assess these factors.

Looking ahead, what aspects of responsible investment do you think will matter most by 2030, and how should the next generation of sustainability leaders prepare for that reality?

By 2030, I don’t think we’ll still be debating “ESG” as a label. By then, it will be widely accepted that investors consider ESG factors when - and only when - they are financially material. It will simply be part of mainstream investment practice, not a separate category.

I also expect sustainable investing to shift meaningfully toward private markets. Private equity and private debt investors have far greater ability to influence business models, drive operational change, and support genuinely sustainable outcomes. In contrast, I believe the market will increasingly recognise the limits of sustainable investing in public equities. Beyond stewardship and engagement, which can certainly be impactful, public markets offer only limited scope for real-world impact. Much of sustainable investing in equities will remain an expression of values rather than a driver of fundamental change.

Finally, I hope that by 2030 I will still be teaching students who care deeply about changing the world through finance. Their passion and idealism are essential. At the same time, I hope to help the next generation understand both the potential and the constraints of investing within a capitalist system. Returns still matter; even for endowments and family offices committed to sustainability. Preparing for the future means balancing ambition with a realistic understanding of how capital can drive impact.

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