Socially responsible investing has gone mainstream, if you haven’t heard. Recent reports show that the total amount of professionally managed money invested with social and or environmental criteria has topped $11 trillion. This hasn’t gone unnoticed by a myriad of large and small investment companies and advisors. It is now more important than ever for committed conscientious investors to understand the various shades of socially responsible investment options in the marketplace. Much of what passes for environmental, social and governance (ESG) investments end up as merely a fund of typical companies which have been run through a screener to weed out the worst of them, known as “avoidance investing,” and their work is done. That’s it, pretty thin soup for investors aspiring to improve the world.
Investing to End Racial and Wealth Inequality by Amy Pender
Pandemic Planning: Transitions, Endings, and New Beginnings by Carrie VanWinkle
SRI in Focus: Creating a New Normal by Michael Kramer
Market Report – Summer 2020 by Scott Secrest
Download a full PDF copy here: Investing with Intent – Summer 2020
The recent national outcry over police violence against Black Americans highlights both the institutional racism of the criminal justice system and the deep socioeconomic disparities Black communities must contend with. Natural Investments has long been committed to channeling investment capital to community development intermediaries and enterprises operated by and for people of color as a way to address systemic inequality. To bolster Black economic power in this moment, here are some resources for directing investment capital into communities of color.
As we concluded the first full quarter of economic fallout from the coronavirus pandemic, stock values were generally higher, with large company stocks up 20.5%, smaller company stocks up 25.4%, and foreign stocks up 14.9%. Bonds, broadly measured, rose by 2.9%. These returns have an impressive luster in part because they are measured relative to the market trough of late March. Overall stocks remain lower for the year.
In The Resilient Investor, we noted that this is an era of volatility, uncertainty, complexity, and ambiguity. Five years after the publication of our book, which was devoted to planning for major disruptions, it turns out even we underestimated how prescient our framework would be!
Typically, volatility is described in terms of the severity of equity market price fluctuation. Severe peaks and valleys in a short period of time typically reveal the levels of investor uncertainty in the absence of dependable economic patterns.
Market uncertainty increased when Trump was nominated and elected and was generally higher than normal throughout 2018 and 2019. Although it skyrocketed in February and March, as the pandemic emerged, it has actually been decreasing the past few months.
Most of us have experienced important disruptions due to the COVID-19 pandemic. At the time of publication, more than 128,000 Americans have died from the illness, leaving entire communities in mourning. Shut-downs and quarantine orders have devastated the economies of entire cities. Nearly everyone—even the most privileged—have had to make major changes to their daily lives.
With the pandemic still in full force, a national response to the police killings of George Floyd, Breonna Taylor, and other Black Americans who lost their lives to institutionalized racial violence has swept across the nation and even the world. The tumultuous events of spring have created one disruption after another. Although disruption can be painful, endings create space for change.
“These are tumultuous times.” It sounds like a cliché, but one could argue that it’s an apt description of life on planet Earth right now. As the world continues its struggle with mitigating the devastating effects of the novel coronavirus, the world has witnessed, yet again, horrific scenes of police violence and brutality against Black Americans. As socially responsible investors, we are well aware of the economic and racial disparities that exist across the world and, most especially, in the US—one of the wealthiest nations on the planet. Moments like these, however, bring those disparities into stark relief, reminding us that if ever there was a time to invest in shifting the paradigm of wealth inequality and institutionalized racism, the time is now.
Intentional Growth, Deeper Commitment by Michael Kramer
Progress on Private Prison Divestment by Kirbie Crowe
Divest, Then Reinvest by Scott Secrest
Spotlight: First Nations Oweesta by James Frazier
Spotlight: The Ujima Fund by Kate Poole
Spotlight: Ecotrust Forest Management by Malaika Maphalala
Mitigating Our Carbon Impact by Christopher Peck
Over the past 30 years, Natural Investments has grown slowly and organically over time by attracting advisors who are aligned with our mission. Even without specific growth targets, our firm has expanded, introducing more people, new ideas, and a wider range of business styles. As a collective of advisory practices, we share common investments, codes of ethics and conduct, policies and procedures, technologies, and values––yet there is a diversity of approaches in how, where, and with whom we work.
This growth has created dynamism and prompted deep reflection on how we wish to move forward, particularly as we work to maintain a sense of family while embracing diversity and minimizing bureaucracy. Beginning a few years ago, for example, our desire to make a commitment to gender and racial diversity led us to add more women and people of color to the team.
Natural Investments enjoyed significant growth since the last report, with sustainable, responsible, impact (SRI) managed assets increasing by 24% to $650M. For the first time, we are using an impact data aggregation firm to delve deeper into our clients’ positive effects on the environmental, social, and governance (ESG) areas of the economy. The additional information allows us to see the bigger picture of our collective efforts, as well as understand trends in areas that are important to our clients. For example, one of the most frequent requests by clients is to avoid direct investments in extractive oil, coal, and natural gas companies, which are driving the climate crisis. In the last year, client demand for our fossil-fuel-free portfolios rose by 127%.