In this fireside chat hosted by the South China Morning Post during a recent Redefining Hong Kong luncheon event, Climate News Editor Eric Ng leads a discussion with Kenny Lam, CEO of Two Sigma (Asia-Pacific), about the rising popularity of impact investing and the opportunities and challenges within the industry. Kenny first noted that the investment process can be emotional, and the goal is to try to make the process more systematic by using data science. Two Sigma aims to promote positive social changes by zeroing in on workforce sustainability. “We are seeing AI technology and machine learning really displacing the workforce in a faster way than we expected,” Kenny commented. This poses an issue for the future of the workforce, as more and more jobs are being automated or eliminated due to technology. “The immediate issue [within ESG] is not only sustainability and environment … but also re-skilling of the human talent base so that we [can] really make them sustainable over the long-term,” said Kenny. This is why Two Sigma invests in companies that can sustain, build, and re-skill the workforce in the face of continued technological advancements. The idea is to re-skill people in a way that will complement the current innovations and work alongside them. Some things to focus on in this re-skilling mission include “human skills” that are difficult to replicate such as creativity and the ability to empathize and critically think about client experience proactively and innovatively. With the help of several metrics that are still being perfected, a lot can be learned about the reengagement and skill level improvement of the workforce. This measurement-based/data science approach is “a more practical side of ESG investing,” Kenny observed. Tracking data not only allows Two Sigma to see the impact an investment has on a company’s bottom line, but it also allows them to see the benefits that are brought to the workforce. When it comes to incorporating the younger members of the workforce, “we have to find a better and more innovative way of engaging, empowering, and building trust with the new generation,” Kenny stated. The positive change that can be created by focusing on re-skilling the workforce is only possible long-term if the new generations are involved and receptive. There has been a massive growth of ESG-focused funds and firms in the last several years, and when data science is used to measure the impact of certain investments, everyone benefits.