Natural Investments’ 2013 Social Impact

The impact of sustainable, responsible, and impact investing is based on your ownership of companies that are shaping responsible business practices and leading us further into the green economy, along with your loans to entities that help people out of poverty and into home ownership and entrepreneurship, build or revitalize urban and rural communities, and help regions recover from natural disasters. In collaboration with thousands of like-minded investors, your investments influence corporate policy and federal and state regulations, while empowering people in communities to take control of their financial future. Your commitment is also matched by the Natural Investments family of advisors; each of us is personally involved in local and national efforts to build a just and sustainable economy. Among the highlights of these leading edge efforts in 2013:

Shareholder Engagement

Through your ownership of mutual funds and NI’s direct engagement, we continue to use our collective voice to shift the policies of the companies you own, as well as those you intentionally avoid:

We participated in direct engagement with Costco as they implement the Sustainable Seafood Policy we helped them create; they’re making progress!

In response to the tragedies in Bangladesh garment factories, we participated in the Bangladesh Investor Initiative, which is seeking major improvements in working conditions and building codes, along with increased pay standards. While there are over 1500 factories in need of independent inspection, we were successful in getting two new apparel industry groups formed—the independent Accord on Fire and Building Safety and the industry-sponsored (and weaker) Alliance for Bangladesh Worker Safety—and we are directly engaging U.S. companies to join these efforts or adhere to comparable standards.

To abate climate change, we supported Calvert and Walden funds as they led the industry to engage and file shareholder resolutions at two dozen oil, industrial, tech, and consumer staples companies, calling on them to set public goals to reduce their GHG emissions and describe their implementation plan. We also supported Walden Asset Management in its letter to two dozen oil and energy companies asking them to review their public policy energy advocacy positions in view of current science of the Intergovernmental Panel on Climate Change.

To facilitate responsible biofuel production, we signed letters to major players in the palm oil industry—producers, financiers, and consumers—to take responsibility for ensuring the sustainability of their palm oil supply chains and prevent deforestation, biodiversity loss, and human rights violations.

In the wake of recent mass shootings, we signed onto a letter with other investors representing $500 billion in assets to request that Amazon cease online sales of semi-automatic weapons accessories.

Public Policy

While we have always participated in public policy campaigns that affect the corporate and investment landscape, 2013 was Managing Partner Michael Kramer’s first year on the national policy committee of USSIF: The Forum for Sustainable and Responsible Investment, the D.C.-based trade association for the SRI industry. Through this channel, the industry was able to get the Federal Employees Responsible Investment Act introduced in the Senate, which would provide an SRI option in federal employees’ retirement plan. We also supported the President in his call new carbon pollution standards for electric power plants, and we advocated successfully for issuance of an SEC rule that would require annual corporate disclosure of CEO-to-median-worker pay.

In addition to these USSIF priorities, Natural Investments also joined in letters initiated by colleagues in support of some important policy initiatives: the Endangered Species Coalition’s correspondence to President Obama, the Department of Interior, and the U.S. Fish and Wildlife Service to stop the process of delisting the gray wolf from endangered species protection; and the Tax Justice Network’s Congressional letters in support of the Holding Individuals Accountable and Deterring Money Laundering Act, and the Incorporation Transparency and Law Enforcement Assistance Act, which address money laundering associated with drug traffickers, terrorist organizations, tax evaders, and corrupt politicians.

Community Impact

Through your ownership of the CRA Qualified Investment Fund, in 2013 we began selecting specific locales of the fund’s investment activity into regions where large portions of our client base resides. In part because of our large stake in the fund, this mutual fund is now targeting your mutual fund investments in green and affordable housing and community facilities in California, Colorado, Hawaii, Washington, Oregon, Oklahoma, New York, South Carolina, and Massachusetts.

We also made direct investments on behalf of accredited clients in new community investment pioneers, including Oikocredit, TriLinc Global, and Envest Microfinance, which direct loans to underserved populations in developing nations.

Accredited Investor Opportunities

In the belief that system-changing innovation often lies in start-up enterprises, we continued to make direct investments in private equity funds and companies involved in innovative sustainability efforts in agriculture, renewable energy, forestry, and other green sectors, such as: Renewal3, Iroquois Valley Farms, Ecotrust Forestry Services, Farmland LP, and Namasté Solar. We also initiated a relationship with separate account manager SNW Asset Management to use a groundbreaking HIP rating system (Human, Impact & Profit) to select bonds that have a high level of direct impact on communities.

Charitable Contributions

We always donate 1% of the firm’s gross revenue to local and national non-profit organizations (see the list at naturalinvesting.com/charitable-contributions), and in addition, this year we provided support to the Responsible Endowments Coalition, which works with student chapters at universities to adopt ethical investment policies, and the forthcoming Local Investment Resource Center, an online resource led by NI advisor James Frazier for people wanting to self-organize investment opportunities in local small businesses; it’s based in part on the success of James’ Local Investment Opportunities Network in Port Townsend, WA. And with the launch of our Fossil Fuel Free portfolio in 2013, we are specifically supporting Bill McKibben’s highly effectual 350.org with a portion of the fees from these portfolios.

As you can see, your Natural Investments are providing a remarkable range of social, environmental, and policy-making returns, alongside their financial performance. We thank you for your part in making this good work possible!