Foreword
By Uli Grabenwarter
IN THE LIGHT of the collateral damage caused by repeated financial crises which have been triggered by the individualistic (ab-)use of the financial system, associating the term ‘conscious’ with investing seems a brave concept. Acting consciously in awareness of the consequences for others isn’t an investment approach that goes well with the individualistic behaviour of return-driven investing. It certainly doesn’t bring to mind a great track record of financial market players in considering societal consequences when pursuing their own objectives.
The term ‘conscious’, in suggesting awareness of the consequences of our acts, refers to an intentional, deliberate act, which, with respect to the consequences for other individuals or the society as a whole, in turn suggests premeditation. Premeditation, in criminal law, qualifies as the highest degree of accountability of the author of a given act.
Indeed, taking responsibility is what conscious investing is all about: rather than delegating the societal and environmental impacts caused by us to a legal and regulatory framework that, in prescribing what is ‘allowed’ and what is not, discharges us of any liability, conscious investing internalises this responsibility into our own decision perimeter.
Why would you opt for that accountability? Isn’t it limiting your choices? Doesn’t it give others the option of taking a free ride on opportunities you disregard because of ethical, social or environmental concerns? Doesn’t it make other market players ‘rich’ while you forgo the ‘best opportunities’ to make money?
Morality in financial markets, and in business in general, will never be a voluntarily subscribed code of ethical standards. News in the media every day reminds us that the dream of Kant’s categorical imperative one day being internalised in financial market behaviours such that financial market regulation and supervision become redundant is a very distant scenario.
Yet, conscious investing is not a hobby of naïve daydreamers.
If this book brings together the contribution of pioneers in impact investing reflecting on conscious investing, it is in full awareness of, or even in response to, very concrete market realities.
They are based on the observation that the magnitude of negative societal spill-over effects of self-centric behaviour of market players in the financial system are creating tangible costs, not only to distant stakeholders in our societal system. These spill-over effects also increase individual investments’ risk and destroy economic value for investors; and in doing so, they erode the sustainability of a whole system on which we are basing our lifestyle, our concepts of social security, our retirement schemes, and every single dimension of our expectations on quality of life.
The trade-off between individualistic maximisation of profit and societal well-being is at the roots of capitalism. This fact is not about to change. However, the global financial crisis in 2008 has brought about the emergence of a widespread resistance from a large spectrum of stakeholders of economic life to the collateral damage that the traditional pursuit of personal wealth at the expense of others entails.
Amongst the claims of this matured stakeholder community is the call for a more conscious way of using the power of capital to serve societal needs, not at the detriment of individual well-being, but as a prerequisite for the sustainability of personal wealth.
In this book, practitioners of the impact investing industry debate various concepts for combining individual and societal prosperity in a wide spectrum of investment approaches. They reverse engineer and dismantle concepts that made us procrastinate in obsolete, wrong-proven financial market logic to guide you to ways of creating personal wealth that do not come at the expense of others.
This being said, conscious investing is not about inventing a new drug that makes you feel happy about the way you earn money. However important our awareness of the societal impact we create may be to put our own conscience at peace, it is only the starting point in a systemic change required to secure the sustainability of our society.
The need to reflect on how we can carry the essence of such investment approaches to the increasing number of stakeholders that are marginalised by our economic system has become indispensible. Again, this is not a concept of charity, but a matter of systemic interaction: the increased interconnectivity of our world no longer allows us to confine social, environmental, demographic and political threats inside boundaries defined by our own comfort. If we are unable to deal with these challenges at distance, they will come to us: in the form of refugee streams, natural disaster patterns, war activity, epidemic diseases, terrorist activity… news stories in the media tell it all.
Whatever conviction we gain of the importance of holistic investment approaches, impact-minded investing and moral standards we want to apply, this book is an invitation to think beyond the microcosmos of our own prosperity. You may take up this innovation for many reasons: because of your good heart, or because of fear – based on sheer logic – about where we are headed to; you may be part of those who look at increasing business risks because of social tensions, modified consumer behaviour, limited natural resources, natural disaster risk and similar; or you may be part of those who, based on humanitarian values, care about this planet.
Whatever reason you choose, they all are valid and share the same degree of urgency. And they will lead to the same result.
Happy reading and safe travels on your journey!
About Uli Grabenwarter
Uli Grabenwarter, is Deputy Director – Equity Investments at European Investment Fund (EIF). In this capacity he oversees EIF’s activities in Impact Investing, Technology Transfer and Venture Capital, with EIF being Europe’s biggest Fund-of-Funds Investment platform in that space. Previously he was responsible for EIF’s strategic development in the equity space and in this context has led the build-up of the Social Impact Accelerator, the first pan-European social impact investing fund-of-funds. From 2010 to 2012 he conducted a 20-month research project on impact investing in collaboration with IESE University of Navarra in Barcelona and the Family Office Circle Foundation based in Switzerland, analysing best-market-practices for impact investing in the private equity and venture capital space. He is a visiting Professor for Private Equity and Venture Capital at IESE University. He regularly publishes articles and white papers on venture capital and impact investing. Uli is also chair of the European Impact Investing Luxembourg think-tank platform (www.eill.lu) and member of several expert groups on impact investing and impact metrics across Europe. Uli holds a Master’s degree in Business and Finance of the University of Graz.
By Christin ter Braak-Forstinger
1. Why my money can save the planet: become a double hero
LET’S ASSUME YOU want your investments to contribute to make our world a better place, save our planet’s resources and uplift the life of marginalized people, but you don’t have a lot of faith in politicians, protest rallies or even your private banker. You might also think your investments are anyway too small to make any difference.
Let me comfort you: you can do something and you don’t have to be a millionaire to make a lasting change with your investments. Every one of us can become a double hero: an active steward of his money and an active steward of our planet. We all can become aware of the specific direction(s) in which we want our money to flow and what impact we would like it to have.
Before that, we need to find out what our inner and very dear values, motives and preferences are, and if our investments are aligned with this core set of personal passions and beliefs. Do you actually really know what you are currently invested in and what titles or shares your investment portfolio is comprised of? Or does your money rest in a savings account, neither creating financial – nor any other – added value?
If you have an investment portfolio, do you know: does it include listed stocks of oil or gas businesses? These stocks might be offered as blue chips today, but at a closer look turn out as financial products with an inherent long-term massive risk exposure – for both your portfolio as well as the environment. This is what the most recent Mercer study on the impact of climate change revealed:1 the coal sector, for example, is likely to fall between 18–74% in the next 30 years.
Every one of us can channel our investments towards sectors and themes we care about and become a catalyst for positive impact at the same time as achieving solid financial returns. Why aren’t our accounts spilling over then and our planet’s ecosystems all intact, diverse and flourishing? Too often we simply don’t care. We take things for granted and do not take responsibility for the outcomes we would like to see. We blame others, cite globalism as a curse for everything, and in the worst case become indifferent free riders.
This may, however, only be a cheap moral option in the short run. When ecosystems are further destroyed, the impact will be felt by everyone and everything. For example, a new report predicts that in 2050 – if no fundamental transformation takes place – more plastic will be in the sea than fish.2 This may seem quite some years away. However, already today it is a reality that much of the plastic in the oceans ends up in the guts of fish and ultimately on our dinner tables.
It’s an “inconvenient truth” – as Al Gore referred to it more than ten years ago – that our personal approaches to our lives and investing will determine what our future on this planet will look like. So, “what does it change to eat organic lobster on the Titanic”3? Hand on heart, not a whole lot. Such an act may satisfy one’s conscious in eating sustainably farmed lobster but, at the same time, travelling on a large vessel like this causes great pollution to the oceans.
In particular, consider that one cruise ship emits as many air pollutants as five million cars4 going the same distance. These large ships use heavy fuel that on land would have to be disposed of as hazardous waste. Cruising has become one of the fastest growing sectors of the mass tourism industry and cruising companies create a picture of a clean and environmentally friendly tourism sector. The opposite is true, however. Cruise ships, in addition, contribute their fair share to the enlargement of the big garbage patch in the Pacific Ocean.
Probably nobody would want to spend his next holiday in the vast plastic territory that UNESCO has recognized officially as a new state. Its population is comprised of several thousand tons of garbage. An estimated 20%5 of the plastic in the oceans comes from ships or offshore platforms. The rest is blown, washed or deliberately dumped from the land.
It’s not only the massive plastic vortex in the Pacific Ocean, however. Throughout the world’s oceans, there are numerous other regions known as ‘garbage patches’ and more islands and coastal areas filled with plastic waste and debris. Henderson Island for example, originally a tropical island gem with one of the world’s most remarkable elevated coral atoll ecosystems in the eastern South Pacific, is dumped with almost 4,000 pieces of trash washing up daily. According to a study of May 20176, Henderson Island is likely to have the highest density of plastic debris reported anywhere in the world. Thirty-seven million pieces of trash cover the remote island and turn it into a plastic junkyard.
So how can we rethink global growth for long-term prosperity and how can we transform our global financial system into a force for good? It’s a fundamental question that points towards both a regenerative economy as well as a regenerative form of investing. In terms of the above example of the alarming ocean pollution, we need to prevent plastic from entering into the oceans in the first place and think about plastic alternatives. Consciously reflecting and consciously acting upon one’s own personal and financial choices will definitely be part of the solution.
While motivations for investing are diverse and typically deeply personal, conscious investors are part of a growing movement who believe they can do better things with their money when they deeply connect with their money and when they allow themselves to also see the big picture: the wider systemic impact that their investment decisions entail.
Traditional investing today is largely intangible, impersonal and often linked with negative social and/or environmental impact. Usually we do not know what our money is doing in terms of impact when it is sitting in our savings account. It’s much more rewarding and impactful to choose a resilient path, prudently consider one’s own destiny, take control of one’s own financial future, and take conscious and focused action to attain it.
This book aims to share with you approaches to conscious investing that are valid for both someone with a full-time job and a family to take care of, as well as for dedicated impact investing enthusiasts. Throughout, you will find personal stories about investments that have created real-life outcomes, that you can touch and feel, and that have created positive impact in multiple ways.
The co-authors of this book have become passionate advocates for action and positive change who deeply align their investment approaches with their values and beliefs. They can stand behind their investment decisions and may even see their portfolios as expressions of who they really are. Isn’t that something we all would like to achieve with our money: relate with our money in a much more personal way, make peace with it and let it positively shape our planet – in addition to achieving a financial return?
2. It’s all connected – with my investments
Today, more and more investors are committed to understanding the full consequences of their investment decisions. They want to become aware of the actual imprint that their money causes and they realize that their investments can have potential implications and an impact on the larger systemic level.
Conscious investing is a new regenerative and enlightened form of capital and investing. A conscious investor is per se holistically oriented and is aware that his investment decisions are interconnected. His personal intention is to create multiple kinds of values through investing, such as financial, ecological, social, physical, emotional, ethical and/or spiritual value. From a personal perspective, it becomes evident to a conscious investor that his money has massive potential as a positive life force. He uses his money to become a proactive re-shaper of positive change. From a systemic perspective, it becomes evident to the investor that everything is not only connected in the web of life, but also that it co-evolves.
2.1 See the big picture – and the whole system
Starting from this eagle-perspective, let us shift our focus to the big picture: the systemic interconnectedness that our investment decisions have. In order to do so, let us first try to understand the hidden dynamism of our planet. Let us think out of our daily routine. Just imagine yourself sitting silently and fully present on a rock above the ocean and observing the sunset in its stunning beauty before you. Probably you remember well a situation similar to this. Allow yourself to reconnect with the feelings you experienced in that situation. Was it like the heartbeat of a planetary sense? Maybe the feeling of the grand simultaneity of it all? It may also be quite likely that you recollect a feeling of deep joy, but also one of empathy and responsibility.
In our interconnected world, systems are linked and their complexity is only partially visible. A change in one system often has severe impact on other systems. To deal with one issue at a time is not really sustainable anymore. We rather need a holistic approach to better understand and react to the interplay between the atmosphere, land-based ecosystems and the oceans. Scientists speak of ‘planetary boundaries’ and ‘planetary stewardship’ in that regard.
But why is it so hard for us to implement this planetary stewardship in our everyday lives? Is it because it is burdensome or is it more because it is out of our perceived focus? It’s probably a combination of both, in particular with the latter making it easy for us to fade it out from our perspectives. Albert Einstein once said: “a human being is part of a whole…(yet) he experiences himself as something separated from the rest…”
Walking down the street, we can easily sense the changes that occur around us. Why are we so bad then at sensing changes that unfold significantly faster – or slower – than our preferred speed? Our planet is much more complex than our ability to comprehend. It moves with speeds and interdependences that do not conform to our everyday modes of thinking. Considering the connected whole (holism) works to our advantage. When we do so, efforts we undertake in one part of a system can unlock greater resilience in another. When in a complex system – the resilience of only one part is bolstered, this can (unintentionally) introduce a fragility in another, which in turn can doom the whole. Andrew Zolli speaks about our “need to work and think in more than one mode or scale at a time” in that regard.7
For humans, it’s hard to accept that the way natural ecosystems work is exemplary. Trees are a wonderful example to show how everything is connected in the web of life. In the process of photosynthesis they filter air. They also extract toxins such as heavy metals and other pollutants (released by humans) and they take out carbon dioxide. Trees protect the soil from erosion. They keep the groundwater table up. They release oxygen. On a global scale, forests simulate cloud formation and so bring moisture to otherwise dry areas and help cool the Earth. What is less known is that trees and fungi engage in an amazing network of cooperation in forests to support each other’s growth. In that regard trees actively communicate to protect and benefit the community in the woods. Suzanne Simard has undertaken vast research on the social community of forests and her research shows the existence of “mycorrhizal networks”, which are underground webs of fungi that facilitate communication and interaction between trees and plants.8 Everything relies on everything else in the larger system.
Approaches that are based on nature-inspired holistic solutions for a healthy planet are becoming more and more popular. For example, biomimicry – a movement that has strongly grown over the past 15 years – provides nature-driven design solutions to show that nature holds the clues for how we can better fit into this planet. Its purpose is to seek sustainable answers to human challenges by emulating nature’s time-tested patterns and strategies, like learning from humpback whales how to create efficient wind power, or learning from termites how to create sustainable and smart buildings. In a later part of this book we will hear more about this innovative approach to investing where nature is our teacher.
An impactful circular farming example is ‘acquaponics’, which is an organic system that successfully grows fish and plants in one symbiotic environment. The acquapoinics system implements a cradle-to-cradle philosophy that utilizes fish waste to provide nutrients for food crops. This concept has proven successful: it’s a hyperlocal whole food that grows in a combined tank with grow beds for people to have in their garages or on their terraces. It proves that everything is metabolized in nature. Countless other examples that take a circular approach into account have become serious competitors to traditional products and service providers: like companies reusing food waste and processing that waste into organic fertilizers. In 2015, the first global bio economy summit triggered new policy and research initiatives for a bioeconomy with the vision to reconcile humanity and nature.
As the basis for all life, our planet is the greatest asset that we have taken for granted. Most recent scientific reports confirm that we are transgressing planetary boundaries at a massive speed. We are not helpless, however. We can all do something to strengthen our planet’s resilience, to change human impact to being regenerative and to make humanity co-evolve with nature. Today, we have the tools at hand to invest in a world of solutions. Solutions that are innovative on their own and that may be able to change the whole system.
3. Conscious investing – a look beyond impact investing
Before a conscious investor implements his holistic financial strategy – that is unique to him – he closely listens to his inner self, tries to connect with his intuition and reflects on his values. He becomes aware of what he would like to achieve with his investments and also why he chooses the specific sectors and themes that are dear to him for investing. Of course, part of this approach is also a thoughtful analysis of his risk-return expectation.
Conscious investors can implement their investment decisions via various approaches, whereby impact investing is the most catalytic of them. Impact investing is the most promising investment approach currently out there and it is constantly gaining momentum. It has demystified general skepticism surrounding the use of market forces to efficiently alleviate social and environmental ills. Impact investments are investments made into companies, organizations, and funds with the intention to generate a social and/or environmental impact alongside a financial return.9 Today, impact investments can be made across all asset classes.
It is important to make clear that conscious investing is not the ‘new impact investing’, nor is it a new investment approach. It puts, however, the impact investing approach into an enlarged picture by taking a multiple value creation approach as well as the inclusion of a systemic perspective. Conscious investing may best be described as an advancement of impactful investing, as it enlarges the picture beyond the intention to create a positive social and/or environmental impact – next to achieving a financial return – and brings a holistic and interconnected view to the investor. It is both a state of awareness as well as a holistic form of impactful investing.
A conscious investor becomes actively aware of the principle that his investment decisions may create multiple kinds of values that are the result of his openness to personal reflection, regarding his values and beliefs, and his receptivity towards larger systems thinking.
3.1 The way ahead
Managing a company by demonstrating a social consciousness and a positive impact on society has become increasingly commonplace. Managing an investor’s money that way is just only beginning to catch on. For decades, investors who wanted to align their ethical values with their investments have bought shares in sustainable investments, or SRI funds. They are either exclusionary (you create a list of companies you won’t invest in for moral reasons and exclude them from your portfolio, i.e. sin stocks) or they are inclusive and make a positive screen for companies that share your core beliefs. That may even go as far as purposely investing in companies that violate your beliefs so that you can become a shareholder and vote to change the company policy. Investors that publicly disclose their reasons for divesting from a certain company may reinforce the conviction of other investors to do the same.
But many investors, in particular millennials (people born between 1980 and 2000), want to send a different message to their financial advisors when it comes to the implementation side: if you want our money, show us scalable solutions for sustainable development that also have a positive impact.
Here is where impact investing comes in. Impact investing funds, for example, own the shares, stocks or bonds of companies to make a positive measurable impact on society/and or the environment. Several years ago, impact investing funds were originally launched for very high net-worth clientele. Today, a growing number of impact funds with market-rate returns are becoming available to mom-and-pop investors. The impact investing market is on the way to becoming mainstream.
Financial giants like Goldman Sachs and BlackRock, and large insurance companies like Zurich Insurance, have entered the scene as investors in recent years. Foundations have become important multipliers as early investors and risk catalysts. They are building on-ramps for other investors seeking to understand where they can join. In that regard, concessionary capital plays a critical and valuable role as market builder. Also, the world’s largest pension funds – such as TIAA from the US and PGGM from the Netherlands – already have made a clear shift towards impact investing. When more of the world’s biggest investors tip, much of the rest of the capital markets will follow.
No doubt, there is enough money out there to be invested. What the market still needs is much more deal-flow with transformative and hyper-scalable business models; but also acclaimed standards for accountability and impact measurement are similarly important. Another blockage to mainstreaming impact investing is the lack of awareness amongst investors. Why is this? The impact investing market is relatively young and many financial advisors are not familiar with the topic as it is new and deemed to be complex, and thus they try to avoid it.
Advisors, however, will increasingly need to cater to the millennial generation, which is the least trusting generation, and which identifies with values like fairness, climate justice and equality. Such values were not as important to the Generation Xers and even less so to the baby boomers. It is the values and not the valuables that make a difference for the millennials. We are amid a demographic shift and many of these young people inheriting large sums of wealth believe in doing good by doing well. In other words, they see business success as a way of benefitting society.10
Let us try a short thought experiment on retirement. Imagine you are a person in your twenties or early thirties with a long-term investment perspective towards retirement and you ask yourself, what are appropriate investments for your retirement funds? Have you ever thought about asking your pension fund which investments they make for your retirement portfolio? To most of us, this is probably a black box. Even when it might not be on your top-priority list to personally dig into such issues now, pension funds need to tackle that question today. Imagine the relationship-manager of your pension plan telling you in 2035: “Well, we grew your wealth at a rate of 7% per year, however your retirement will be spent fighting the ongoing wars for food and water. Also, your retirement home in Miami is now under water. But on a brighter note, we outperformed our peers by 50 basis points.”11
Could it be that a failure to integrate long-term environmental, social and governance (ESG) factors into investment decisions is a failure of the common understanding of fiduciary duty? In its most extreme form, could it be that a pension plan is in breach of its fiduciary duty – vis-à-vis millennials – when investing in fossil fuels? These and similar questions are getting more and more relevant under a long-term investment horizon for institutional investors like pension funds, who by the very nature of their work serve multiple generations.
The concept of fiduciary duty is strongly recognized in common law systems (case law) like the United States or Great Britain. Civil law countries like states in continental Europe rarely explicitly refer to ‘fiduciary duties’ in the context of institutional investors. This does not mean, however, that fiduciary duties do not exist in civil law. Regulatory obligations like ‘the duty to act prudently’, ‘the duty to act in the interests of beneficiaries’ and the ‘duty to act loyally’ give the first indications of this.
In December 2015, the European Commission published a report (based on a market consultation) on how institutional investors deal with ESG-factors and how they integrate such factors into their portfolios.12 The majority of respondents from different groups acknowledged that financial markets still focus predominantly on the short term. This seems surprising when one considers institutional investors’ liabilities, which often run over decades. However, it gets more obvious when one takes the predominantly short-term performance remuneration, the incentive systems, of most asset managers into account. On the other hand, respondents made quite clear that the lack of long-term risk assessment models that can incorporate long-term environmental risks is also not helpful. Neither does it help – as the consultation has brought to light – that staff are insufficiently trained on ESG in general, and its implementation and valuation.
Considering both financial and non-financial factors in reporting is fast becoming mainstream investment practice today.13 Investors in public equities are using ESG-reports as a signal for broader performance. In addition, traditional financial institutions are opening up in that regard. For example, in early 2017 the London Stock Exchange launched an ESG-reporting guide with the intention to help companies gain a clear understanding of what ESG information investors would like to see provided by companies.14 This should ultimately help investors to make more informed choices about responsible business practices. In that regard, ‘knowing’ may be seen as an opportunity versus ‘not knowing’ as a risk.
Coming back to fiduciary duties, a recent international study on ‘Fiduciary Duty in the 21st Century’ revealed that failing to consider long-term investment value drivers, which include ESG-issues, in investment practice, is a failure of fiduciary duty.15 The study identified several corporate core challenges like: outdated perceptions about fiduciary duty (in particular in the US), where ESG issues are too often characterized as non-financial factors; or inconsistency in corporate reporting, including inadequate analysis of the financial materiality of ESG issues. Of course, supertankers are slow to turn. However, institutional investors need to take fiduciary and risk issues, and the links between their broader investment allocations, seriously. In particular, they cannot ignore risks that could potentially have damaging effects on investment portfolios.
In our thought experiment above, the retirement savings have partly been used for fights over water. This is not only scary and unpleasant, but to most of us also morally insupportable from an ecological point of view. From a financial perspective it is probably highly imprudent, especially when you take into account that the companies in the London Stock Exchange’s FTSE Group’s Water Infrastructure and Technology Index have outperformed the more than 7,000 companies listed on the FTSE’s All-World Index by 22% in the past five years.16 This should not be something new for asset managers: lasting recent years, many studies have documented that the consideration of ESG factors leads to investment outperformance.17 Going forward it becomes evident for institutional investors that integrating a conscious and systemic view into their investment processes will be increasingly required from their clients’ side.
3.2 Can my well-intended investments do more harm than good?
Experienced conscious investors who take seriously their mission to scale up positive solutions to global problems also think about a potential negative impact of their planned investment(s). If such evaluation and risk assessment concludes that a particular investment could entail harm and thus create potential negative impact, they would refrain from investing. One of my dear friends and experienced conscious investors shared a story like this with me, regarding why he and his fellow investors did not go ahead with a planned and originally very interesting investment into a South American wind park. After a second round of due diligence, they found out that an ethnic minority group and tribe of indigenous people would have to be banned from their land if the wind farm were built. Therefore, they did not invest.
In practice, still too few investors who invest into impact apply proper accountability and due diligence standards and do not look beyond the first veil of their planned investments. Some so-called impact investments can also create harm next to doing good, or even create more harm than good. For example, when the investment is interlinked with illegal land acquisition, contaminated water supply or violations of labor rights. A recent report confirmed that the failure to take risks of social, and environmental harm seriously can not only cause project delays, increase legal costs or harm reputations, but, even more damagingly, it can lead to catastrophic financial, human and environmental outcomes.18
A due diligence in that regard may not be treated as a tick-the-box exercise, but rather as an earnest social and environmental due diligence.19 Probably you have heard about the March 2017 decision of a high court in India, which granted the River Ganges the same rights as a human being. In India, the Ganges is the holiest river. It holds a very high place in the mythology of India and is considered sacred by more than one billion Indians. The Ganges now is the first non-human entity in India to be granted the same legal rights as the people. Over recent years, the holy river has been faced with massive environmental threats. The new regulation should help to save the river for the generations to come. Polluting or damaging the river will now be legally equivalent to harming a person.
Of course, linking environmental harm with human rights is controversial and one can immediately come up with a counter-argument: How can a river, with no voice of its own, ensure such rights? On the other hand, it shows a heightened consciousness about values that are interlinked with nature and that might not be obvious at first sight. Describing environmental harm in human rights terms can create a measure of accountability for abuses that can otherwise be difficult to quantify, disclose or detect. Harvard Law School’s International Human Rights Clinic, for example, examined a case in South Africa and found that the country is failing to uphold its citizens’ human rights by allowing toxic waste from huge mine dumps in and around Johannesburg to seep into local rivers.20
Summarizing, a focus on rights and accountability, and on best practice social and environmental due diligence standards, helps the investor to make better and more informed decisions, and improve one’s intended positive impact. A conscious investor aims to explore root causes instead of investing in symptoms. He becomes aware that his investments are interconnected and influence each other, i.e. ecosystem integrity, clean water, food and energy-security, and biodiversity conservation.
This systemic perspective that goes along with a conscious investor’s choice of investments drives the investor to proactively look beyond the impact of each individual investment and make sure that an individual investment does not cause any related – sometimes not visible at first sight – social and/or environmental harm. That is why a conscious investor undertakes a serious social and/or environmental due diligence for each of his investments. He does not see it as a cost burden, but rather as a long-time financial benefit.
4. Why my investments can save my soul: become an enlightened investor
I will start this paragraph with a deep and long exhale. Why? Because it gives me focus and room to reflect from inside out. Actually, it gives me some emptiness in a positive way; it helps me to become more aware of my thoughts and words that I want to share with you. No doubt, in our everyday lives, consciousness has become a luxury. That is why our brain switches to autopilot as often as possible. By avoiding thinking, we may save our stamina for new, eventually dangerous stuff.
We live in an exciting world of distractions and choices. Conscious and unconscious choices. But while human philosophy books are thick on exquisite reflections of cognition and consciousness, we are left with our daily options of which coffee cup to use, which message to like, which glass of wine to enjoy, or which investment to make. Conscious investing at its core is interlinked with our conscious choice of investments that are dear to us. It’s about investments that we are able to honestly connect with personally. A conscious choice also requires a clear focus of the direction that we want to tread.
In that respect, reflection and even contemplation can be very helpful. If we allow our mind to become still for a moment, we will be able to connect with our intuition. This may sound contradictory in the first place: make a conscious choice and then rely on our intuition. In practice it’s not: it’s actually strongly interlinked. Reflection gives room for the establishment of a conscious choice. Patricia Aburdene speaks of an “intuitive hit”21 in the context of cultivating a higher consciousness, which can guide one’s conscious money choices.
Many investors use values today when making investment decisions. In the long run they want their money aligned with their values. An enlightened investor is, however, not only a value-driven investor. Enlightened investors consciously and proactively point their money towards the future they want for themselves and for their children. Enlightened investors invest in positive change by changing their traditional approach to investing. They have the power to transform finance by making money while consciously making a difference. Klaus Schwab, founder of World Economic Forum, stated in an article on the Fourth Industrial Revolution, “In the end it all comes down to people and values… it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny.”22
For enlightened asset owners it’s also essential to build a positive connection with their money, so that they can ultimately fully identify with the investments they have made. In order to do so, conscious asset owners go beyond old habits and patterns and are open to new ways of thinking and acting. For example, they may allow their investments to connect with their feelings, their spiritual identity and to heal their soul. The range of healing can be vast in that regard and is of course very personal. It can be that an investor personally experiences the benefit and added value to which his conscious investments contribute. This can reward him with a positive feeling of comfort and happiness. An investor can also forgive himself for investments that he has undertaken in the past that do not reflect his values and beliefs anymore. Another way is to make peace with investments undertaken or wealth created by a related third party (i.e. your family) that you have inherited and that you retrospectively would have done in a different way, or that you could never honestly identify with.
Growing up in an age of connectivity and disruption, millennials have a heightened sense of consciousness regarding the world around them. They have experienced the reality of threats posed by climate change and they link themselves to a lifestyle of health and sustainability (LoHaS). In 2017, Elizabeth Currid-Halkett launched a book on the rise of the “aspirational class”: a new conscious group of value-driven consumers who use their knowledge to attain a higher social, environmental and cultural awareness (i.e. on organic food, electric cars or breastfeeding).23
Today, there is growing evidence that millennials see impactful investments as part of their DNA. If millennials continue to align their positive intentions and worldview with their investments, this will lead to a dramatic alteration and disruption of today’s financial landscape. Liesel Pritzker Simmons, a dedicated US impact investor and representative of the millennial generation, has said in an interview with Wharton business school that “this generation really wants to see both profit and purpose happening at the same time. Their standards are higher. I do not think that investments are just neutral. I think that where you put your money and how you invest it makes a difference.”24 Enlightened asset owners allow themselves to overcome passivity and indifference. They become proactive stewards of positive change – for themselves, and for the society and the planet at large.
5. Invest in a world of solutions and earn money
So far, we have heard a lot about reflection, intuition, deep connection with our personal values, and spiritual identity. However, rest assured, conscious investing is not only for the soft-hearted of this world. A key question for many investors is whether impactful investments can deliver acceptable or market-rate returns over time. Most impact investors surveyed by the GIIN (Global Impact Investing Network) in 2016 have pursued competitive, market-rate returns. Today, it’s proven that impact investments don’t have to sacrifice financial returns while achieving positive impact.25 During the Economist magazine’s Impact Investing conference in New York City in early 2017, Andrew Kuper proclaimed that “we need to compare impact investing returns with those of technology disruptors like Uber or AirBnB and show that profit with purpose generates outside returns and outsize impact.”26 Great businesses of the future will fundamentally address societal challenges.
Historically, the return expectations of impact investments have been put into two different camps: ‘impact first’, focusing on concessional returns, and ‘financial first’, focusing on market-rate returns. These trade-offs don’t describe today’s reality, as impact investments are increasingly implemented – from individual impact deals to multi-impact investment portfolios – taking varying levels of risk, return and impact into account.27 The Omidyar Network recently spoke of the benefits of having a ‘sliding-scale’ of impact and financial return and of remaining flexible to modifying the risk-return profile during the life of an individual investment.28
Of course, there are many different options for structuring a holistic investing policy that integrates your values and choices, and their larger systemic connectivity. To begin with, the diversity in target sectors such as education, healthcare, small business finance, microfinance and inclusion, sustainable customer products, natural resources and conservation, renewable energy and climate change, ecological agriculture, low-income housing, marine-conservation, community development, etc., is vast. Different investors will have different answers to that. The individual approach chosen will always need to take into account a diversification across asset classes according to a risk-return profile that makes sense for your individual, your family’s, your company’s and your organization’s values and purpose, alongside your capital preservation and your growth goals.
5.1 Time of collective consciousness: a new normal – Sustainable Development Goals as investments
As Leonardo DiCaprio stated in his speech at the United Nations in April 2016:
“Our planet cannot be saved unless we leave fossil fuels in the ground where they belong. A massive change is required right now that leads to a new collective consciousness, a new collective evolution of the human race inspired and enabled by a sense of urgency from all of you.”29
Even if President Trump denies it, the end of the fossil fuel era is on its way. Hundreds of business leaders have asked Trump to accelerate, not impede, the low carbon economy. The big question that we are faced with is whether the low-carbon future and aligned investment opportunities will come quickly enough to avert the most extreme effects of climate change and interlinked social impact effects (i.e. migration).
It’s a given that climate change is happening every day. It’s reality: here and now. For example, the villagers of Newtok, a small town in Alaska, have been forced to abandon their community as shoreline erosion keeps water levels constantly rising. Once the village stood on solid permafrost ground. In 2017, it was projected that the highest building, the school building, will be underwater. And the Newtok people, a Yupik tribe, who have lived on this piece of land for 3,000 years, are not the only ones affected. Around 180 other Inuit villages in Alaska currently face the same fate. Once fishermen and nature’s stewards, they have become, or soon will become, climate refugees. The constant rising of the sea level is interlinked with another, similarly sad, example: the melting of the world’s glaciers. I will never forget standing at the Grossglockner-Hochalpenstrasse in Austria, in my early twenties, and looking at my country’s largest glacier: the Pasterze. It was deeply moving. Since then it has drastically melted. In summer 2015 alone it shrunk by 10 metres and then 2016 was the warmest year in 250 years. Austrian geologists predict that if this melting cannot be stopped, the Pasterze glacier will have vanished totally by the year 2050.
David Bank, CEO of ImpactAlpha, recently raised the fundamental question: “In a decade or two, what are you going to tell your kids and grandkids when they ask you: ‘back in the teens, during the great energy transition, which side were you on?’”
Here is where the Sustainable Development Goals (SDGs)30 come in. The SDGs are a set of 17 interrelated goals for the planet – to be achieved by an inbuilt timeline by 2030 – that bring together developing and developed world, and public and private sector opportunities. Those goals include, for example, combating climate change and protecting the planet’s oceans and forests, improving health and education, ending poverty, and making cities more resilient. While the SDGs primarily target governments for action, the SDGs recognize the key role that business can and must play in achieving them. In doing so, they define growth markets for companies that can deliver innovative solutions and transformative change. BioCarbon Engineering31 for example, is a company that works to plant one billion trees annually and that can potentially scale to tens of billions of trees, to offset the 15 billion trees that are destroyed annually. The company does so by developing drones that plant trees, by first mapping the planting areas to get an understanding of ground typology, soil type, etc., and then sending biodegradable seedpods into the ground. New business opportunities like these open up a new discourse, disrupting the traditional North-South model to one of shared global responsibility and concern.
So what will it take to reach the SDGs in just 14 short years? It’s a common and collaborative effort. The trick will be to match the rhetorical commitments of the SDGs to action and results. In that regard, it will be crucial that all involved stakeholders will speak the same, ideally simple, language. As highlighted above, for each and every single goal, private sector involvement and engagement is pivotal. For example, climate action will require companies to provide green infrastructure and technologies. And conserving and sustainably using our oceans is not only about responsible fisheries, but will require companies to rethink the design of their product’s life cycles and improving resource efficiency.32 And addressing biodiversity pressures will require integrating biodiversity in the way in which food systems operate worldwide, how energy is produced, how fresh water is managed and how oceans are treated, and how wood is extracted and used. This will give vast and almost endless opportunities for businesses and the primary sector of the economy (agriculture, farming, fishing, etc., and accompanied packaging) to go beyond symptom-cure and transform their strategies and procedures to integrate holistic development into the core of their business models. Consequently, new innovative and promising investment opportunities will arise.
A recent report on leveraging the SDGs33 coins the term “SDG investing” (SDGI) and describes SDGI as all investment strategies whereby sustainability and/or the SDGs form a material factor in the investment decisions. This would mean SDGI serves as an umbrella for the full spectrum of sustainable, responsible and impact investing, and recognizes the connections between each investment approach.
No doubt, all of these investment approaches serve to reach the SDGs. An investor should, however, be clear which state of activeness is important to him and which level of impact he wants to achieve. In contrast to simple negative screening for facts that have already happened in the past, impact investing is an approach with the ex ante intention to create a positive social and or environmental return. Impact investors intentionally go beyond the passive do-no-harm agenda to an active approach of creating good for society, planet and prosperity, aligned with the 2030 agenda. Somewhere in the middle lies the ESG approach that considers the inclusion of environmental, social and governance factors when selecting companies in which to invest. In the larger context, one can see that all these investment approaches are per se good from a social and environmental perspective. Impact investing is, however, the only approach out of those three that may catalyze money towards a systemic change. A change away from individual investments – even those best intended and sustainable deals – to building a new regenerative market infrastructure.
While evaluating and measuring the impact of their investments is crucial for impact investors, they still collect and report on several available metrics that can be aligned with the SDGs. For example, the Toniic Institute recently published an SDGI-impact investing framework which it shared as a public good and which gives impact investors guidance on how to align their investments with the SDGs.34
In developing SDG methodologies and solutions, it will be important to ensure that innovation and creativity of local communities, local government tiers and agencies is taken into account. The variations in the ecosystems, local socio-economic responses and local impacts of climate change must be incorporated in SDGI solutions as well. It will not be a one-size-fits-all approach.
Delivering on the promise of the SDG commitments also requires building resilience to the growing impacts of climate change. Climate resilience is in everyone’s words today. It means going beyond climate mitigation and strengthening our planet’s ability to adapt to environmental shocks caused by climate change. It empowers communities, cities and whole countries to transform in response to changing climate patterns. The largest conference on climate adaption so far, which was held in 2016 in the Netherlands, shed light on several trends. Climate resilience needs to identify policies and actions that can help individual persons enhance their capacities to manage climate change; it needs to reinforce bottom-up adaption, thus tackling climate change not only at a national but also at a regional and local level; and it also needs to be open for nature-based solutions like reforesting landscapes, greening roofs or urban gardening. These trends will give rise to create resilient cities of the future that meet both social- and environmental needs. The recently launched ‘Imagine Boston 2030’ plan, for example, reveals plans for a greener, more economically inclusive and climate resilient city.35
Climate resilience is similarly important for companies as it affects both a company from the inside as well as from its link to the outside world: its entire supply chain. According to the World Economic Forum’s Global Risk Report 2017, environmental-related risk – like extreme weather events, climate change or water crisis – is a key risk for businesses.36 That goes in line with investors’ interest in climate risk management, which has sharply risen in recent years and which will continue to rise over the coming years. The economic possibilities for forward-looking companies that provide new services or products in that regard are extensive. New developments in electric vehicles, smart and micro grids, and advanced manufacturing of smart and sustainable transport solutions, all continue to accelerate climate action.37 Transformative revolutions are already out there and they will only continue to increase.
5.2. Creating systemic change in practice
Creating systemic change requires large scale collective impact on a cross-sectoral level and through multi-sector collaboration. Collaboration has the potential to move a single solution up to systemic change. The World Future Council, for example, has committed itself with the ‘Bregenz Declaration’38 of April 2017 to proactively take action for systemic change. In that regard, they plan to take several priority actions, like building capacity and cross-sectoral networks amongst policy-makers to create a 100% renewable energy system. In practice, there are many different forms and constellations of cross-sectoral collaborations, typically involving the social sector, business and government. Scalable solutions in this area are able to identify the right stakeholders, spot synergies between the sectors and align social missions with their strengths. Successful examples of financial vehicles that target multi-sector collaboration and collective impact are pay-for-success structures like all forms of impact bonds or public-private-partnerships (PPPs), which are typically structured as layered investment vehicles.
An interesting example of cross-sectoral social innovation that has led to systemic change in Japan is the development of the elderly care insurance. What may sound like a high-level project, actually started with an initiative of an individual person. In 1987, a local NGO provided volunteer services for the elderly and handicapped, but soon realized that plain volunteering could not fill the gap; they developed a menu of care services and a care management system. In doing so, the organization modernized the approach to elderly care in Japan. Their model ultimately has been incorporated into Japan’s national elderly care insurance system. With this new insurance system, elderly care has been transformed into an $80bn service industry. Today, many social entrepreneurs in Japan that have been inspired by this story’s transformational impact and other examples have begun to prioritize larger societal impact and are scaling their business models for greater systemic change.39
Not only in Japan, but across the globe we can observe that disruptive social community-driven innovations, coupled with new models of civic engagement, are improving service delivery and are changing the way governments and citizens interact. Governments on their end will be forced to open up for redesigning their structures, for data-driven decision making and for funding models that go beyond taxation. For governments of the future it will be necessary to build capacity and to operate effectively in interdependent networks of organizations and systems (across public, private and non-profit sectors) to co-produce value.
While much has been written on the topic of blended finance as a solution towards systemic change, debate continues as to how to define the concept. It is basically a flexible way to look at multi-sector partnerships and capital. It means the strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets. Blended finance transactions are characterized by a number of benefits for institutions engaged, for example: leverage (use of development finance and philanthropic funds to attract private capital), impact investments (that drive social, environmental and economic progress) and returns for private investors in line with market expectations.40 A report in April 2017 – with a focus on guarantees – showed who is really doing blended finance in practice these days and proved that guarantees have been successfully structured in areas such as affordable housing, healthcare, community revitalization and energy efficiency.41
Another very recent example of how catalytic the combination of private and public money can be is the Philadelphia Reinvestment Fund. The Philadelphia-based community development financial institution has given proof that a private bond market for low-income community development is on the rise. The $50 million in S&P-rated bonds issued in the last week of April 2017 were oversubscribed within minutes. The bonds carried a AA-rating from S&P. That anonymous private investors would buy unsubsidized bonds on the open market signals a new source of capital for small businesses, childcare centers, health clinics or energy efficiency upgrades in low-income communities.
5.3 Become a conscious investor of change
The world is undergoing multiple complex transitions at the same time: towards a lower-carbon future; towards technological change of unprecedented depth and speed; towards new global economic and geopolitical balances. Managing these transitions and the deeply interconnected risks they entail requires long-term thinking, investments that embrace these transitions and more collaboration from us.42 To achieve broad social impact we need transformative and systemic solutions. Solutions that are designed and implemented in an integrated, cross-sectoral and cross-scale manner in line with ecosystems’ requirements. These solutions will provide interesting and holistic investing opportunities.
Human well-being cannot be achieved without the protection and conservation of our Earth’s ecosystems. This does not only require a more sustainable use of resources and more conscious production, but also changes in individual consumption (i.e. food-sharing platforms or changing of dietary habits towards more locally grown food and less meat) and investing patterns. Acting out of a position of consciousness helps to better understand whole systems and their interrelations. Conscious investors are aware that everything is connected and co-evolves in the web of life. As mentioned earlier in this chapter, they are interested in exploring root causes instead of investing in symptoms.
In recent years, mobile, connected, smart and clean solutions have only become better and cheaper. In many parts of the world, renewable energy is already cheaper than energy from fossil fuels. Solar panels, for example, have for the first time become cheaper in 2016 than comparable investment in coal, natural gas or other options. The SDGs recognize the connection between the well-being of people and the planet and make the big link between regenerative and holistic forms of investing these days. So when we, for example, take, SDG 13 ‘Climate Action’, we see the systemic interrelation the following way: it should not be a choice between fostering development and fighting climate change; in fact, our planet’s future state and thus the prosperity of us all depends on addressing the climate threat at its core. Given that the SDGs are universal, interconnected and involve the entire world, each of us holds a vital piece of the whole to make this implementation happen.
Pope Francis said in an inspiring April 2017 TED talk, “Everything is connected and we need to restore our connections to a healthy state.”43 Before that, in 2015, he proclaimed why the whole is greater than the part by saying that we consciously “need to recall how ecosystems interact in dispersing carbon dioxide, purifying water, controlling illnesses and epidemics, forming soil or breaking down waste.” He recommended an “economic ecology” where nothing can be considered in an isolated format; but where ecosystems are interrelated and dependent on each other.44
Blaming politicians, globalism or large corporations and shifting responsibility away from oneself is an easy choice. It will have no positive impact, however. Also, having good intentions to please our conscience, but not acting accordingly, does not change anything. A much better alternative is that we become responsible for ourselves and that we consciously take bold action upon our everyday choices.
The coolest thing will be when we proactively revolutionize the capital markets by investing in companies that have integrated transformative change into the core of their business models. Then the way these companies operate simply becomes the new normal and mainstream business. As a consequence, the distinction in search for impact becomes meaningless. This will not happen from one day to the next. But it can happen through our collective effort. It is in our hands to point our money towards the future we want for our children and ourselves. While our challenges are great, we should stay optimistic and become conscious and enlightened investors of change.
About Christin ter Braak-Forstinger
Dr Christin ter Braak-Forstinger, LL.M. is the founder of PVA Advisory (founded in 2011) and the co-founder of Chi Impact Capital (founded in 2017) and has a longstanding and professional track record in the area of strategic philanthropy- and impact investing advisory. She is an advocate of a holistic and conscious approach to investing and a regenerative capital market. Before founding PVA Advisory, Christin worked for Freshfields Bruckhaus Deringer, the Financial Market Authority Austria, Bank Julius Baer and SAM Sustainable Asset Management AG. Christin is the author of peer-reviewed articles in banking, law, philanthropy and impact investing. She has also published several books. Christin completed her postgraduate studies at Duke Law School and at Harvard Law School. Her dissertation and her master’s thesis received several awards.
Privately, Christin is the co-founder and president of BRAVEAURORA, a distinguished Austrian, Swiss and Ghana based NGO (founded in 2009) that aims to reintegrate orphans and vulnerable children into their extended families, abolish illegal orphanages, and undertakes collaborative community development work in Northern Ghana. Christin is a dedicated mother of two children and is an earth and nature lover. She is a certified yoga teacher. Yoga and meditation form an integral part of her life.
1 The most recent Mercer study on the impact of climate change on investments examined four different climate scenarios and concluded that investors should take action and actively understand the risks of climate change associated with their investment portfolio. The report recommends to mitigate these risks. Amongst the scenarios considered, a 2–4 degree Celcius change will cause the coal sector to fall from 18%–74% through 2050, with effects more pronounced over the coming decade. Regulatory changes could also lead to oil and gas companies coming under pressure to curtail their carbon emissions by not exploiting the reserves that they already have. Mercer, ‘Investing in a time of climate change’, www.mercer.com/our-thinking/investing-in-a-time-of-climate-change.html (2015).
2 Ellen McArthur Foundation, ‘The new plastic economy: rethinking the future of plastics’ (January 2016).
3 This and other forward thinking questions in the context of conscious investing were raised by Ulrich Grabenwarter at the 3. Impact Investing Forum in Vienna in April 2017.
4 See the statement of Rieger Daniel, a transport officer at German environment group Nabu, in the Guardian, 21 May 2016, www.theguardian.com/environment/2016/may/21/the-worlds-largest-cruise-ship-and-its-supersized-pollution-problem; see also www.nabu.de.
5 See Coastal Care, www.coastalcare.org/2009/11/plastic-pollution.
6 Jennifer Lavers and Alexander Bond, ‘The Proceedings of the National Academy of Sciences’, www.pnas.org/content/early/2017/05/09/1619818114 (April 2017).
7 Andrew Zolli and Ann Marie Healy, Resilience (Headline Publishing Group, 2012).
8 Suzanne Simard, ‘Conversations in the Forest: The roots of nature’s equanimity’, in Trees, Ars Vitae, ed. by J. Julianne Lee (Volume 5, 2016).
9 Definition of the Global Impact Investing Network, www.thegiin.org/impact-investing/need-to-know/#s1.
10 ‘Billionaires Insights, The changing faces of billionaires’, UBS/PwC (2015).
11 This and similar thought experiments came up in discussions with my dear friend Milti Chryssavgis from Drashta Capital.
12 Eric Mugnier, Caroline Delerable, Adrian Tan and Antoine Helouin, in collaboration with EY, ‘Resource Efficiency and Fiduciary Duties of Investors’, Final Report, European Commission, DG Environment, ENV.F.1/ETU/2014/0002/DG Environment.
13 See for example the EU Non-Financial Reporting Directive (Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups), www.eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2014:330:TOC.
14 Guide to ESG Reporting, London Stock Exchange Group, www.lseg.com/esg (February 2017).
15 Rory Sullivan, Will Martindale, Elodie Feller, Anna Bordon and Jaime Garcia-Alba, ‘Fiduciary Duty in the 21st Century’, United Nations Global Compact, Finance UNEP Initiative, PRI, Inquiry: Design of a Sustainable Financial System (2015).
16 See the report from the UK-based Carbon Disclosure Project that found the impacts of droughts, floods and water pollution cost businesses 14 billion USD last year, which is a five-fold increase from 2015, www.cdp.net/en/research/global-reports/global-water-report-2016.
17 See for example the Study of Columbia University, ‘Impact Investment and Institutional Investors: How can pension funds help enable a transition to a sustainable low-carbon economy?’, www.sustainability.ei.columbia.edu/files/2015/02/Impact-Investment-and-Institutional-Investors-Final-Report.pdf (December 2014).
18 ‘Investor Briefing: Renewable Energy Impacts on Communities, Managing Investors’ Risks and Responsibilities’, Business & Human Resource Center, Sonen Capital (April 2017).
19 See for example, Natalie Bridgeman Fields, ‘Accountability: The Golden Opportunity in Impact Investing’, Stanford Social Innovation Review (November 8, 2016).
20 See Bloomberg, www.bloomberg.com/politics/articles/2017-04-18/theresa-may-seeks-snap-u-k-elections-on-june-8 (April 18, 2017).
21 Patricia Aburdene, Conscious Money (Atria Paperback, 2012).
22 Klaus Schwab, ‘The Fourth Industrial Revolution: what it means, how to respond’ (January 14, 2016).
23 Elizabeth Currid-Halkett, The Sum of Small Things: A Theory of the Aspirational Class (Princeton University Press, 2017).
24 Interview of Stephanie Kim with Liesel Pritzker Simmons, ‘How Impact Investing can change the world’, Wharton Business School, www.wharton.upenn.edu (March 17, 2016).
25 See for example, ‘Introducing the Impact Investing Benchmark’, www.cambridgeassociates.com/research/introducing-the-impact-investing-benchmark (2015); or ‘Great Expectations: Mission preservation and financial performance in impact investing’, papers.ssrn.com/sol3/papers.cfm?abstract_id=2694620 (2016).
26 Andrew Kuper is co-founder of Leapfrog Investments, www.leapfroginvest.com/about-leapfrog.
27 Christin ter Braak-Forstinger, ‘The multiplication effect of innovative philanthropic capital’, Philanthropy Impact Magazine, www.philanthropy-impact.org/article/multiplication-effect-innovative-philanthropic-capital (Fall 2016). See also ‘A Philanthropist’s guide to the future’, a recent report of the DELL Foundation that highlighted the need for philanthropists to invest in innovative and riskier projects, impact.msdf.org/report.
28 Matt Onek, ‘Philanthropic Pioneers: Foundations and the Rise of Impact Investing’, Stanford Social Innovation Review (January 2017).
29 Leonardo DiCaprio, speech at the United Nations High Level Signature Ceremony for the Paris Agreement, www.leonardodicaprio.org (April 22, 2016).
30 The SDGs were approved by the United Nations on September 25, 2015, www.un.org/sustainabledevelopment/sustainable-development-goals.
31 See www.biocarbonengineering.com/story.
32 At December 2016’s Biodiversity Conference, the UN proudly announced that the Aichi Biodiversity Target 11 on protecting 10% of the world’s coasts and marine areas by 2020 has been reached; this is definitely a fantastic achievement. However without further and accompanying systemic changes, like integrated business strategies of companies that tackle holistic business solutions from the core of their business models, such individual approaches – despite the best intentions and immense effort – remain a drop in a bucket. A recent analysis by the Georgia Institute of Technology has shown that the world’s oceans are experiencing a significant decline in dissolved oxygen and face a more rapid decline than ever before. With these falling oxygen levels in the ocean water, dead zones of marine life and fish become more and more likely, www.rh.gatech.edu/news/591290/decades-data-worlds-oceans-reveal-troubling-oxygen-decline.
33 C-Change discussion paper, ‘SDG investing: Advancing A New Normal In Global Capital Markets’, www.un.org/esa/ffd/wp-content/uploads/2017/03/SDG-Investing-Report_170306.pdf (spring 2017).
34 See the SDG-Impact Investing Framework of the Toniic Institute that links 11 macro impact investing themes, and 55 subthemes, to the United Nations’ Sustainable Development Goals (SDGs), www.toniic.com/sdg-framework (March 2017).
35 See Imagine Boston 2030, www.imagine.boston.gov.
36 World Economic Forum, ‘The Global Risks Report 2017’, www.weforum.org.
37 Al Gore on Climate Change and the 4IR, in World Economic Forum, The Global Risks Report 2017, www.weforum.org.
38 World Future Council, ‘The Bregenz Declaration – A Call to our Collective Consciousness’, www.worldfuturecouncil.org/bregenz-declaration-call-collective-consciousness (April 2, 2017).
39 Ken Ito, ‘Creating Systemic Change’, SSIR, ssir.org/articles/entry/creating_systematic_change (February 16, 2017).
40 World Economic Forum/OECD, ‘A How-To Guide for Blended Finance’, www3.weforum.org/docs/WEF_Blended_Finance_How_To_Guide.pdf (September 2015).
41 GIIN, ‘Scaling the Use of Guarantees in US Community Investing’, thegiin.org/knowledge/publication/guarantees-issue-brief (April 2017).
42 World Economic Forum, ‘The Global Risks Report 2017’, www.weforum.org.
43 TED talk of his Holiness Pope Francis, www.ted.com/speakers/pope_francis (April 2017).
44 His Holiness Pope Francis, Encyclical Letter Laudatio Si, bit.ly/1Gi1BTu (2015).