The ImPact

An Earth Day Guide to Action Through Impact Investing

Posted on by Case Foundation

Since 1970, April 22nd has marked the celebration of Earth Day, an opportunity for many individuals and organizations to renew their commitment to consume less, learn more and explore new ways to protect and preserve our planet. Historically, focusing on the role that investments can play in support of Earth Day isn’t something we’ve heard a lot about. Yet, the growth of the impact investing sector means that more and more socially conscious investors are thinking about the role that capital can play to blend profit and purpose.

In honor of Earth Day 2017, here are a few of ways you can start on your own journey.

Renew your personal commitment

The Earth Day Network, and many organizations like it, promote opportunities, events and resources for each of us to celebrate and recommit to conservation and preservation.

Earth Day Network suggests a few actions we can take this year, such as:

  • Reducing your environmental footprint by exploring how you can reduce your impact on the planet
  • Stop using disposable plastic by taking a pledge to reduce consumption
  • Planting or donating trees to combat deforestation and reduce global greenhouse gas emissions

Explore the opportunity for investment

At the Case Foundation, we’ve been committed to scaling impact investing over the last several years. This work has focused on inspiring and educating a range of investors on the opportunity to align their dollars with personal values. With recent growth across impact investing, many investors are poised to activate their impact strategies. We’re emboldened by the sectors experiencing the most growth and showcasing real investment opportunities.

Climate change is one such sector. The Global Sustainable Investment Alliance, a network of sustainable investment organizations recently released its 2016 Investment Review. The Investment Review tracks and reports out on sustainable investment activity worldwide, with specific trends across multiple geographies. Though the GSIA includes investment activity across many approaches to impact—beyond impact investing alone—the increase in activity is inspiring.

According to the 2016 report, $22.89Tr of assets were professionally managed under responsible investment strategies, up 25% from 2014. Responsible investment—as a broad range of strategies and asset classes—represents over 1/4th of professionally managed assets globally.

In the U.S., the report suggests that climate change remains the most significant environmental factor assessed across sustainable assets. Even in smaller asset classes and funds – like private equity and venture capital – the most popular ESG issue last year was clean technology. Climate change and carbon emissions were specific areas where funds incorporated interventions into their investment process.

Growth across sustainable investing—and the role that climate plays—is an exciting opportunity for environmental themes to continue to be front and center as investable opportunities.

Learn from others to kickstart your investment journey

Earth Day is also an opportunity to follow in the footsteps of trailblazing organizations that are similarly interested in protecting our planet.

  • Last month, we wrote about the compelling case study of the Rockefeller Brothers Fund aligning their endowment more closely with their programmatic mission. In a webinar led by Jean Case, Justin Rockefeller of the Rockefeller Brothers Fund and Jameela Pedicini of Perella Weinberg Partners outlined the concrete steps to blending profit with purpose. In the case of the RBF, they undertook tactical steps, like defining their impact, knowing what you own, and committing to measurement.
  • In March of this year, our partners at The ImPact, continued their broader mission to on-board families into impact investing with a primer on Water. With the growing role that HNW individuals and families will play in scaling impact investing, the primer helpfully outlines considerations for families who want to invest in water to help preserve our natural resources.
  • ImpactAssets has also developed material to explore the more nascent sectors within which impact investing can grow. Sustainable agriculture is one such opportunity. In adding 2 billion people to the planet over the next 30 years, our practices around sustainable farming and food production are in need of reformation. Investment capital can play an important role in revitalizing and innovating current practices.
  • You don’t have to be a big investor or a large organization to make an impact with your dollars – you can also start to look at your own investments. The Divest/Invest movement is one such example. This effort looks to engage a diverse range of investors and individuals in a global effort to reduce investment into fossil fuels. Through this and other efforts, you can make a pledge or take action towards refining your own investment footprint.

Whether your Earth Day commitment involves your time, your community’s energy, or your organization’s assets, there is a role for impact investing to be incorporated into your thinking about conservation, sustainability and preservation of the planet.

Impact Investing as a Tool for Social Change

Posted on by Case Foundation

Over the past two years, we have focused a large part of our efforts to move impact investing from niche to mainstream on building awareness of the investors and entrepreneurs who are harnessing the power of the capital markets to provide financial and social returns. Last year, we published the Short Guide to Impact Investing, and we partnered with Entrepreneur.com to bring “Profiles of Impact” to their readers. But we realized that one of the most powerful things we could do to build awareness was to go to the most influential storytellers – the journalists we rely on to bring us the news and highlight the most important developments in our world today.

That’s why last week, at the Impact Hub NYC, the Case Foundation and Arabella Advisors co-hosted a gathering for more than 100 journalists and communicators to discuss impact investing and social enterprise. The group heard from leading social entrepreneurs and investors about the opportunities and challenges in this growing field.

There are many definitions applied to the terms “social enterprise” or “impact company,” which are often used interchangeably. However, our CEO, Jean Case, offered one broad definition at the outset of the day. She defined a social enterprise as a company that has the intent to produce a social good, that commits to measure progress toward its goals, and that practices transparency in sharing its findings.

Here are few themes that ran through the day’s conversations. And, for more context, be sure to take a look at the Storify that we created with tweets from the day.

Optimism that Business Can (and Should!) Be a Force for Good

Neil Blumenthal, whose company Warby Parker provides affordable, stylish prescription eyewear and incorporates a Buy One, Give One model, set the stage at the beginning of the day when he said, “I hope we don’t live in a world where I have to justify every good deed by a profit motive.” Neil’s sentiments echoed those made by a number of CEOs recently, including Howard Schultz of Starbucks, Tim Cook of Apple, and Mark Zuckerberg of Facebook, who have all told shareholders who questioned their actions related to sustainability and responsible business that they should get out of their stock.

Jean agreed with Neil, and noted that for too long in America, business leaders had only one goal – to provide financial returns to their shareholders. ImpactAlpha’s David Bank echoed her comments later in the day when he said, “there’s a god we’re all supposed to worship named ‘Risk Adjusted Market Rate Return.’” “But,” Jean said, “that sentiment is changing,” and investors are starting to look at the concept of return more broadly.

Clara Miller, who led the F.B. Heron Foundation’s charge to direct all assets (including its endowment) to social good, supported this feeling when she said, “It can’t just be that one side shovels out problems as fast as it can, and the other side is the cleanup crew.” However, no one at the event suggested that business should replace philanthropy, nonprofits or government. Instead, as Justin Rockefeller, a Trustee of the Rockefeller Brothers Fund and a founder of the ImPact said, “it is one of many tools in our toolbox to tackle social challenges.”

Financial and Social Returns are Possible

Over the course of the day, we heard regularly from investors and entrepreneurs that it is possible to make positive financial returns from investments in social enterprises. Andrew Kassoy, Co-Founder of B Lab, thinks that we’re seeing a real shift in the potential for impact businesses to grow. He said “we live in a time where you do well because you’re doing good.”

Shazi Visram, the Co-Founder and CEO of organic baby food brand Happy Family, which sold to Danone in 2013, says that hers is a great story for two reasons: “because the company changed the baby food market for the better and at the same time made investors a lot of money.”

The investors were also bullish on the sector. Amy Bell, Executive Director of Social Finance at JPMorgan, said that she’s found impact investing to be good for business. She said that JPMorgan’s “Aha!” moment came when clients kept asking for impact investing advice and products that provided market rates of return. This enabled her to scale the practice to meet client needs. Ommeed Sathe, who in his role of Vice President for Impact Investments at Prudential is leading the creation of a $1B impact portfolio, said that socially responsible investments are crucial to creating a diverse portfolio that delivers long-term value for shareholders.

The returns aren’t limited to investors. Tim Newell, Vice President of Financial Products at SolarCity, provided some important context of the potential of clean energy to benefit the U.S. economy. In 2014, he said, one in every 78 jobs added in the United States was related to solar. He also predicted that in 2015, the solar industry would add eight times as many jobs as the oil, gas and coal industries combined. His bullish forecast shows that there’s real potential for the industry not only to contribute to a cleaner planet, but also to create jobs and growth in the United States.

So, it’s not only “cool to care,” as Neil Blumenthal said. Responsible investing can also make investors money and contribute to healthier, wealthier communities.

The Story’s Not Finished Yet—and It’s Ours to Write

Catherine Clifford, who is a Senior Writer at Entreprenuer.com, asked each of the social entrepreneurs on her panel how they tell the story about their organizations and about why this growing sector matters. The panelists stressed that that many stories needed to be told—the story of impact and disruption, the story of profits, the story of fearless investors, and the story of changing business for better across the United States and the world.

Matt Bishop, the Globalisation Editor at The Economist—whose 2008 book, Philanthrocapitalism, was ahead of its time in calling for private sector solutions for social problems—summarized why impact investing and social enterprise are so interesting. He said, “this is a fantastic story, but we don’t know the ending yet.”

We hope to continue the conversation about social enterprise and impact investing to create the story together, and we hope that you will join us. Please follow @CaseFoundation on twitter for updates and upcoming events.

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