Some folks put pressure on the institutional investors who
represent them. A lot of institutional capital may yet go
through this paradigm shift because their constituents are
saying, “We care about these issues, so you have to make our
money care about these issues.” That’s an interesting trend
that’s taking place. I agree that it’s slow, but it’s happening.
My other observation, which is more portfolio and data-oriented, is about information. I think the time is limited for
companies to do what they do without sharing a lot of information about how their businesses interact with the world around
them. Going forward, I believe it will become a business risk for
companies to not disclose more information. Even if we don’t
find formal mechanisms or regulatory mechanisms to facilitate
this information transfer, I do think a lot more data will be discoverable and will be available for everyone to consider.
Margaret M. Towle: Hopefully that will happen sooner than we
expect. We would like to thank all of you for your insights and
informative comments. This has been an interesting discussion
around impact investing.
Ron Cordes: It’s been a pleasure to get to know all of you.
Rochelle Gunn: Likewise. Thank you to everyone.
Debbie McCoy: Yes, likewise.
1. Section 3(c)( 7) is a portion of the Investment Company Act of 1940 that
permits the exclusion of investment companies from standard registration requirements with the Securities and Exchange Commission
if all U.S. investors are considered to be "qualified purchasers" or
"accredited investors." http://www.investopedia.com.
Cordes, Ronald, Brian O’Toole, and Richard Steiny. 2004. The Art of Investing and Portfolio Management: A Proven 6-Step Process to Meet Your
Financial Goals. New York: McGraw Hill.
Garvey, Gerald T., Joshua Kazdin, Ryan LaFond, Joanna Nash, and
Hussein Safa. 2017. A Pitfall in Ethical Investing: ESG Disclosures
Reflect Vulnerabilities, Not Virtues. Journal of Investment Management 15, no. 2: 51–64.
trying to convince members of the intermediary community that
if women and millennial investors in particular are important to
them, they must recognize that these investors will continue to
influence the market by demanding these types of strategies.
I am optimistic that we’ll see continued growth in assets, both
on the public and the private side. If we’re going to take a shot
at putting new sources of capital toward solving big societal
problems, we’ll need significantly more investors and asset
managers who are committed to this type of investing. This
includes building an ecosystem that engages the intermediary
community in working with clients in this space. We’re working with several universities to bring more talent into the space
including our Frontier Market Scouts program with the
Middlebury Institute to engage mid-career professionals who
would like to transition from a traditional investing career into
Rochelle Gunn: I agree that this type of investing constitutes a
paradigm shift. In our office, we’re always asking the question:
“Do the family members feel connected to their capital?”
Capital investing is about creating value; it’s about sparking
ideas and innovation; it contributes to long-term economic
growth; and it can lift people up. We believe investing should
be more than information on a computer screen or a daily
market quote. It should be linked to the real world.
We talk a lot about stakeholder capitalism, in which investors
are linked to companies that are creating good things for society and the economy and that are linked to their communities,
their customers, and their employees. We emphasize this positive feedback loop rather than staying stuck in a paradigm in
which everything is about shareholders and short-term profits.
Debbie McCoy: I agree with all that’s been said. I would just
add a couple of observations. Society is shifting generally, so
when I look forward, I see a much more aware population, more
global thinking, and investors who are reflecting on their own
role in how things are happening in the world.