Investment
Investment
Financing and Investing in Enterprises and Activities that Empower People and Preserve the Planet
A Conversation with Steve Waygood of Aviva Investors
Capital Institute spoke recently with Steve Waygood, Head of Sustainability Research at Aviva Investors, to learn more about the advocacy work the company— with $433 billion in assets under management—has undertaken to advance the cause of more transparent reporting and management of sustainability risk. We also talked with Waygood about how Aviva Investors has embedded sustainability practices into its own operations, his broad concerns about the flawed methodologies that are currently used to value corporate assets and profitability, and the role both policymakers and the private sector need to play in addressing those flaws.
When and Why Foundations Should Blur the Line Between Profit-making and Charity
A recent New York Times article on program-related investing highlighted the $10 million equity stake the Bill & Melinda Gates Foundation took in Liquidia Technologies. Some in the foundation world are concerned that the investment blurred the line between profit-making and charity. We and our Braintrust advisor Stephen Viederman say foundations should blur those lines—as long as they deploy their endowment assets when they do so. We would argue that foundations should use all of the tools available to them to meet their mission and purpose: grants, program-related investments and, most powerfully, their endowment assets.
Patient Capital Collaborative
An Innovative Funder of Sustainable Companies Seeks to Establish its Own Sustainable Business Model
Some people talk about impact investment. Some people dabble with their own surplus funds. Some commit. Sky Lance and Tom Balderston have selflessly committed not just funds, but their full-time professional efforts to lead this important, catalytic initiative that leverages the deal flow and community of Investors' Circle in the impact investment space. I recall encouraging Sky to make the commitment at a conference in Sundance (after dropping and breaking a wine glass almost on Robert Redford's foot—no joke). I told him how important would be the contribution he could make by investing his experience and leadership in this idea. My hope is that all the institutions now growing excited about the potential of impact investment will consider supporting, and investing in, as I do, the Patient Capital Collaborative. Few initiatives have the potential to move the field forward professionally and collectively as does the PCC under Sky and Tom's leadership.—John Fullerton, founding PCC Limited Partner
Peter Kinder Wins Joan Bavaria Impact Award
Capital Institute is proud to report that Peter Kinder, co-founder of KLD Research & Analytics and Capital Institute board member, is this year's winner of the Joan Bavaria Impact Award. He was honored along with William Foote, founder and CEO of Root Capital, as this year’s winners of the fourth annual Joan Bavaria Awards for Building Sustainability into the Capital Markets at the opening reception of the Ceres annual conference, held in May in Oakland, CA.
The Bavaria Awards are given annually to two leaders working to move the capital markets toward a system that balances economic prosperity with social and environmental concerns. Separate awards are given for recent innovation and long-term impact. Bavaria, a pioneer of social investing, founded Ceres and Trillium Asset Management before her death in 2008.
Kinder received the Bavaria Impact Award. In 1988, Kinder co-founded KLD Research & Analytics, the world’s first for-profit investment research firm dedicated to the evaluation of corporate environmental, social and governance (ESG) performance and practices. KLD established the intellectual framework and metrics eventually used throughout the world to measure sustainability performance for publicly-traded companies.
Mark Pinsky of Opportunity Finance Network Reflects on the Evolution of the CDFI Industry
Opportunity Finance Network (OFN), founded on the principal that it is possible to lend profitably to low-wealth and low-income people and communities, has been providing financing, knowledge-sharing, and advocacy for Community Development Financial Institutions and other community development organizations since 1973. The Capital Institute recently spoke to Mark Pinsky, the organization’s President and CEO, about how OFN supports the CDFI industry in its efforts to scale up to meet the ever-growing, critical financing needs of low and moderate income (LMI) communities throughout the United States. He also expressed his views on how the Community Reinvestment Act might be reinterpreted and reinvigorated by acknowledging the new ways that banks define their markets.
Community Development Finance Leader Clifford Rosenthal Says CDFIs No Longer in Defensive Posture But Face Longer Term Pressures
Update: Cliff Rosenthal, assumed a new position in May 2012 as leader of the Office of Financial Empowerment of the Federal Consumer Financial Protection Bureau.
August 2010—Clifford Rosenthal is among the pioneers of U.S. community development finance. His call in 1986 for the creation of a national neighborhood bank corporation helped catalyze the establishment of the CDFI Fund in 1994. Created under the Riegle Community Development and Regulatory Improvement Act, the CDFI Fund is a Treasury Department program that provides funding through a competitive application process to community development financial institutions (CDFIs) serving low and middle-income populations. There are over 860 certified CDFIs operating in the United States today, including banks, credit unions, loan funds, venture capital funds, and community development corporations.
Since 1983, Rosenthal has been the President and CEO of the National Federation of Community Development Credit Unions, a CDFI that has invested $100 million since its inception in local community development credit unions through its Community Development Investment Program. Here he shares his perspective on how the financial crisis is impacting CDFIs, as well as his thoughts on the industry's longer-term challenges.
Impact Investing: An Introduction
A space in the capital markets where the world of investing for profit and the world of investing for desired social and environmental outcomes meet and merge is attracting a growing and diverse group of investors. They are funding sustainable specialty coffee farms in Tanzania, affordable housing projects in New York City, and post-consumer recycled paper manufacturers in San Francisco.
Rose Smart Growth Investment Fund: Repairing and Greening the Fabric of Cities
“To repair the fabric of cities, towns and communities while preserving the land around them” is the stated mission of Jonathan Rose Companies. It may sound like an unusually lofty, exceedingly idealistic goal for a real estate company. But Jonathan Rose Companies is more than about developing real estate.
Founded in 1989 by a third-generation developer who sought to mix his passion for real estate with his passion for making a difference in urban communities, every project of Jonathan Rose Companies is guided by five principles: First, to increase the diversity of the places where people live and work--mixing public spaces with residences, workplaces, marketplaces, and education and spiritual centers. Second, to build with environmental sensitivity using a combination of high-tech modeling techniques and practical, often low-tech solutions. Third, to support the integration of work life and personal life--as expressed by “livelihood.” Fourth, to be mindful of the linkages between projects, users and their surroundings. And fifth, to consider that change is a given for real property as it is for all things, and thus to recognize that development projects must be conceived to adapt to often unanticipated future needs.
A Conversation with Cherie Santos-Wuest, Director of TIAA-CREF's Global Social and Community Investment Group
Shortly after TIAA-CREF created its Global Social and Community Investments Group in 2006, it conducted a poll of its clients, asking, among other questions, what core values guided their investment-decision-making. As it turned out, human rights, community investment, and environmental sustainability topped the list. This came as no surprise to TIAA-CREF since just prior to undertaking the survey it had observed an almost exponential growth in its social equities mutual funds. When TIAA-CREF subsequently dug deeper to assess which of its investments met those three values criteria it found that 85 percent of those assets resided in its real estate holdings.
In 2007 Cherie Santos-Wuest, former director of TIAA-CREF’s Global Private Market’s Group, was tapped to direct the Global Social and Community Investments Group, and assumed responsibility for managing the company’s existing Corporate Social Real Estate Investment Portfolio. In 2009 she also became the director of TIAA-CREF’s new Green Building Technology Investments Portfolio. The Impact Investor talks here with Santos-Wuest about the investment strategies TIAA-CREF is implementing with these two Portfolios to better address the expressed core values of TIAA-CREF clients.
Lisa Hagerman of More for Mission
More for Mission was launched in 2007 by the Annie E. Casey Foundation, the Meyer Memorial Trust and the F.B. Heron Foundation, with the goal of helping foundations better align their investments with their underlying mission.
The More for Mission network currently includes 64 foundations with over $30 billion in assets. More for Mission seeks to encourage more investment not only in traditional program-related investments (PRIs) that are expected to earn below market rate returns and are aligned most closely with a foundation’s mission, but also in market-rate mission investments (MRIs) that support broader social and/or environmental goals.
The Impact Investor talked with Lisa Hagerman, Director of More for Mission, to find out more about the challenges and opportunities facing nonprofits as they seek to become more active in mission investing. (M4M is hosted by The Initiative for Responsible Investment, now affiliated with the Hauser Center for Nonprofit Organizations at Harvard University.)