A Year of Emerging Leadership: 2018 Reflections
Full copy of the 2018 Social Impact Report
While Natural Investments principals have always been thought leaders in the sustainable, responsible, and impact investment (SRI) movement—we’re the only firm in the world to have published three books on the subject—we have generally gone about our business in a quiet manner.
We’ve intentionally remained small by institutional standards, and while we’ve garnered the respect of our SRI peers, we are not a household name. In 2018, our profile changed considerably, in ways that affirm our commitment to integrity in SRI over all else. First, I was elected to the board of our industry trade association, US SIF: The Forum for Sustainable and Responsible Investment (www.ussif.org), which I have belonged to for nearly 20 years. As an active member of its policy committee, I have been thrilled with the advocacy work we’ve done with regulators and legislators and was honored to join the board last year.
My perspective on the industry was once considered fringe and even radical, but my election to the US SIF board is a clear response to the watering down of industry standards by newer, larger, mainstream firms in recent years. What we are hearing from others in the SRI field is that our voice matters more now than ever. This shift has come as a welcome surprise, as did my election as Secretary of the US SIF for 2019.
The impact of the mainstreaming of SRI was a key theme for discussion among my industry colleagues last year, and we made a couple of company decisions to address it. First, we became the title sponsor of the US SIF 2018 annual conference, affording us greater visibility as speakers and exhibitors. Our aim was to share our perspective with our peers on what we should do to protect the integrity of the field.
We launched our first white paper, Rigor in Ratings, in which we compare our 27-year-old Heart Rating of SRI mutual funds with Morningstar’s new Sustainability Rating of funds. The white paper offers a thorough critique of the Morningstar rating, as well as concrete suggestions on how it could be improved. The constructive critique was well received by many of our peers, as was my characterization of that rating’s standards as seriously flawed during a breakout session panel at the SRI Conference in November.
We were thrilled to add a couple of new advisors to the firm last year—Kate Poole and Tiffany Brown—progressive millennials who champion investing to advance reparations for slavery and the Native American genocide. Our newest advisors are dedicated to using innovative strategies to drive capital to communities and enterprises that foster economic opportunities for people of color. Growing our firm through the addition of new advisors is part of our long-term strategy to ensure the continuity of Natural Investments after seasoned advisors and principals retire. In order to grow in a sustainable way, it’s essential that we make a dedicated effort to understand and honor the priorities and passions of the next generation.
We now have twenty investment professionals at Natural Investments, based in eleven states across all time zones, except Alaska. And in 2018, we reached another milestone: we manage $570 million in assets. Given our humble beginnings as a father-and-son firm in the late 1980s—our growth has been remarkable. Of course, the true value of our growth is that it enables us to channel more capital to a wide variety of deeply impactful, cutting-edge private and community investments that were once unavailable to us due to the high minimum investment amounts.
We have entered a new phase of our firm’s evolution, and we are excited for the possibilities as we step into a bigger leadership role. Thank you for allowing us to steward capital for this purpose; it is a true honor for us.