Barbara Krumsiek

Sustainable, Responsible, Impact Investing: Part 3

Sustainable, Responsible, Impact InvestingThis is the third in a multi-part series on the main program of the 25th annual SRI Conference on Sustainable, Responsible, Impact Investing held November 9–11, 2014 at The Broadmoor in Colorado Springs. See also Video Friday: What is Sustainable, Responsible, Impact Investing?Violating Indigenous Peoples’ Rights Increases Industry RisksSurveys: Nonprofit Board Members & SRI 2014 Conference Attendees25th Annual Conference on Sustainable, Responsible, Impact Investing, Part 1 and Part 2. The Agenda page of the Conference site now has links to video, audio and presentation slides. 

SRI / ESG Industry Pioneers

Carsten Henningsen

Carsten Henningsen

Carsten Henningsen, Founder of Portfolio 21 – 1960 earth was at 50% capacity; 1985 100%; 2014 150% capacity. Global government cooperation can lead in 4 directions.

  • Fortress World – no matter what the cost
  • Ecotopia
  • Ecosystem Collapse
  • Technology Saves the Day

Not just an ecological crisis but a human crisis.

Wayne Silby

Wayne Silby

Wayne Silby, Co-founder of Calvert Social Investment Fund – was a promoter. My sleep is better… on the way to China Social Investment Forum on Thursday. SRI used to be about screens. Technology will change how we invest. Robotics, algorithms, computers will be telling us what to do when we get up in the morning. Helped start China Environment Fund. Discussed investments into the Third-World. Rich/Poor divide. Individuals must take responsibility. You are the educators for two generations from now, creating a cultural mime.

Patrick Doherty

Patrick Doherty

The Grand Strategy Project

Pactrick Doherty, Founding co-director, Strategic Innovation Lab, Case Western Reserve University. Pentagon wrote a memo for new grand strategy based on sustainability. Correlation of economics, governing institutions and foreign policy. The International system is unsustainable.

  • Economic Inclusion – 3B entering middle class – driving conflict over water, food , minerals
  • Ecological depletion – 2/3 ecosystem being depleted
  • Contained Depression – Economy is deleveraging, not a cyclical downturn
  • Resilience Deficit – Critical systems, infrastructure lack resilience, highly disruptive: cyber, rare-earths, BP, tsunami, bridges

Demand plus Capital minus Stranded Assets ($26T) compose our economic engine

US Grand StrategyAfter WWII surburban expansion, cheap consumer goods, reconstruction of materials for Europe and Japan using Federal investment & subsidies

Taxes subsidies support road, suburbs, agriculture

Next Engine – suburbs to smart growth; Agriculture: Industrial to Regenerative; Resources – Revolution in productivity (tax shift from wages to resources)   We are going to double our housing stock and it needs to be energy efficient. New business and distribution models. Walking distance to farmers markets

Capital – corporate cash, one market funds, Sovereign Wealth, Bond market bubble  $42B generation transfer  Stranded assets – hydrocarbons ($26T), human services & retail, private capital equipment, public infrastructure.

American foreign policy: lead the global transition to sustainability – New global partnership (we’re 4%; can’t do it on our own).  Provide assurance that we aren’t going to change course (security assurance). We need to provide a level of consistent behavior.

Idea is to deliver a grand strategic plan to the 45th president. Content, constituency, implementation framework.

Beyond GDP: Valuing What Matters?

ColoradoGPI

GPI vs GDP

GDP-Kennedy

Speaker(s): Kim CoupounasLew DalyChris Stiffler Not everything with a price has a positive value, and not everything with a positive value has a price. That’s the paradox at the heart of a burgeoning global movement to redefine economic, business, government performance in line with a new bottom line of well-being and sustainability for all.

For some reason, I didn’t have my laptop at this session, so notes even worse than normal. I was focused mostly on efforts to measure GPI, gross progress indicators. Click here for an old presentation that puts it simply. In Colorado the biggest deductions from GDP in defending order: income inequality, nonrenewable resource depletion, cost of lost leisure time, underemployment, and commuting.

Change from a fixation on growth to focus on well-being. Vermont had the first GPI office. The Colorado Fiscal Institute. Maryland as well. If I remember correctly, Washington State coming next. See also Implementing GPI in Vermont, Maryland and Oregon.


 Domini Social Investments: The Latest Systematic Risk? Addressing Corporate Tax Avoidance

DominiAdam KanzerTessie Petion Tax inversions, avoidance concerns for SRI. Multinational corporations v the state. Corporations get countries to compete with each other. Knee-jerk reactions from shareholders is that tax avoidance maximizes shareholder value.  Citizens for Tax Justice – Offshore Shell Games.

Adam:  Citizens for tax justice. $1.2T from top 30 companies. Costing US $90B/yr. As of 2012, companies have booked taxes to Bermuda equivalent to 1600% of Bermuda’s GDP. Same with Cayman Islands. Apple pays 3% outside US, instead of what should be about 20%.  Apple’s Ireland subsidiary owns the intellectual property that gets taxed at 2%. They ‘pay’ royalities to that subsidiary. Microsoft similar. Google – actually books European sales to Ireland.

Tessie: Researching tax avoidance. Financial services, tech, pharma big on tax avoidance.

Barclays had tax avoidance branch helping others. (analogy – from drug user to drug dealer). Applied Materials – tax avoidance doesn’t outweigh strength of benefits from solar.  Don’t exclude companies that don’t have women on board but do vote against their boards.

How tax strategies might undermine their sustainability efforts. Filed proposals at Google, Apple. Most of the early research that enabled these companies was tax-funded.

JNJ we pay our fair share. Unilever also good tax citizen. Adopt a tax code strategy.

Again, Domini is in the lead. Where are the public pension funds that depend directly on taxes?  See Investors Back Global Tax Reform and Transparency.


 

Audrey Choi

Audrey Choi

Barbara Krumsiek

Barbara Krumsiek

Women Empowered – For Progress and Profit

Audrey Choi, Morgan Stanley; Barbara Krumsiek, Calvert; Julie Gorte, Pax World. Each gave a little on their history. True balance isn’t having women superstars on boards, it is having an equal number of mediocre women to men as well. (liked that one) Hard to get corporate culture to change. War for talent was the call before the crash. Now more data driven research around business case: clients Women control 2/3 of $41B wealth transfer from baby boomers. Investment opportunities create of value. Entrepreneurship.  The data is there, women and millennials have more focus on transparency and investment that support their values. Get senior women in your practice. “Lift while you’re climbing.”

Julie Gorte

Julie Gorte

Impact investing can be direct or through large-caps.  S&P 100 Every one now has a woman or minority on the board. Brand, reputation, image. Buffet was the last to join club and made a speech on BH having to do more.. then changed. 21% of directors are women; up from 19% last Calvert survey. Mentoring – constant hard feedback. Critical mass is important to enable women/minorities to act as individuals.. not representatives. 60% of college graduates are now women. So, they are entering corporate workforce in great numbers.  However, 65% of working mothers of who graduated from elite universities and are between 25 and 54 are out of the workplace, compared to 7% of fathers in the same age group. (OK, not sure I got that one right… but left in to highlight problem.)

Harvard Business School investigated how business faculty treated women differently.  They got there. They looked at why Baker(?) scholars continued to be men and they fixed it.  Need forensic examination. Don’t average responses of men and women but dissect. Correlation; difficult to prove causation. Diverse groups get better decisions (given time) because they bring different information.  Perspective.

Calvert one of the best places for working mothers. Flexibility for both women and men to raise and coach their children. One paid day off a month for volunteer services. Pay equity. Electronic leash makes it easier to work anywhere. Safe zones around time off for activities. Millennials wanting more worklife balance.

During her opening remarks, Julie Gorte mentioned that she mentioned that she had compiled a bibliography of studies on diversity.  She graciously gave me permission to distribute it here (download in Word: diversity-bibliography-Gorte). I would love to keep this going. It you make use of it and annotate it further, please send me your updates and I will post in the library.

End of Part 3

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