SVN Member Champions Impact Investing Pledge

Initiative invites investors to declare specific goals towards a higher level of sustainable investing

Friday September 28, 2012 -- Camille Jensen

It was inspired by Warren Buffett’s the Giving Pledge, but instead of asking people to give their wealth to charity, the Investing Pledge invites investors to use their investments to do good.

The impact investing challenge, which asks individuals, families, foundations, endowments, pensions or treasuries to declare a specific goals towards a higher level of sustainable investing, was started last year by Social Venture Network (SVN) member and president and CEO of Renewal Partners Joel Solomon.

Joel SolomonSolomon has committed to investing 95 per cent of his portfolio for positive impact by the year 2013.

“My money is my vote for the world I believe in, for my values, and for future generations,” writes Solomon in his Investing Pledge.

“I consider it the responsibility of current generations, who have benefited from exuberant capitalism, to ensure that the wealth we own must continually cause less damage and be directed towards positive solutions.”

When Solomon made the goal for his personal investments last year, his portfolio was already investing 75 per cent in positive impact. Joel says he does this by looking for banking institutions he considers to have good values and positive community impact.

“I steer clear of large-cap publicly traded investments, and when I face circumstances where those asset classes are part of the picture, I look for advanced socially responsible (SRI) screens."

Inspired by Solomon’s goal, Meyer Family Enterprises (MFE) has also taken the pledge, committing to have 100 per cent of its investments — more than $50 million — in impact investing by 2020. It also set the goal to have at least 75 per cent of its investment portfolio seeking positive social impact by 2015.

MFE's CEO Patrick Gleeson says the pledge sets an example and challenges other investors to get serious about changing their investments.

Patrick150“I know that (impact investing ) is happening. For me, it’s just not happening quickly enough,” says Gleeson.

“We’re not going to get the attention of people if we’re just nibbling at their heels.”

Gleeson says MFE has been able to move its money into impact by partnering with like-minded organizations including SureHarvest, IceStone, GoodCapital, and Renewal2.

Gleeson also credits the work of Paul Herman, CEO and founder of HIP Investor, which stands for Human Impact and Profit, for helping MFE evaluate its current portfolio impact and performance (50 per cent of their investments are in impact), and make plans to shift the remaining capital.

“We now know where are pain points are and we are moving out of those pain points. We may get to 100 per cent impact before 2020,” adds Gleeson.

While Gleeson says he’s found amazing partners, the industry of impact investing still largely talks to itself. In Gleeson’s experience, there is a resistance to impact investing with traditional financial advisers not taking the sector seriously.

There is also a need to shift the expectations for impact investing, with Gleeson adding it shouldn't be assumed that returns will be below market rate.

“We haven't had the same amount of success in impact investing as traditional investing but we're getting there," he says, citing renewable energy and green real-estate development as bright spots.

In an effort to inspire more investors and foundations to challenge their beliefs, and financial advisers, Gleeson speaks about MFE’s pledge and experience at conferences. He says his story has been heard by hundreds of organizations, and 10 to 20 large investors and foundations have been moved into action.

Gleeson recently shared MFE's Impact Investing pledge at Social Venture Institute (SVI) Hollyhock. He says he hopes his continued effort of sharing MFE’s work to invest in positive impact will inspire more foundations and investors to get serious about moving significant amounts of money into the sector.

“We need to tell our story, what worked, what didn't work, and empower other impact investors to say that you can do more than 5 per cent, 10 per cent, 15 per cent of your portfolio, you can do 100 per cent,” says Gleeson.

“Because at the end of the day, we view impact investing as smart investing. And those smart investments are going to be the ones that are successful because those that aren't treating the environment correctly, that aren't treating employees well, that don’t have the gender diversity on their teams, they are not going to survive.”

To learn more about the Investing Pledge, click here.

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If you have feedback on this article, please contact camille(at)axiomnews.ca.