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Alignment of Investments to Values

Alignment of Investments to Values

One barely has to skim news headlines to be aware that many of the greatest challenges of our time involve social and environmental issues. From improving workers’ rights to climate change, our responsibility to be aware of how our decisions affect populations and environments has never been greater. One area where I recognized that I had the opportunity to voice my values was through my investments.

The concept of aligning investments with values is not a new one, as communities have invested in accordance with local customs or traditions for hundreds of years. However, the concept has experienced a recent reemergence in the form of “impact investment”, which has various forms and names, such as socially responsible investment and several others, but encompasses the practice of investing for financial returns as well as some kind of positive social and/or environmental impact. 

It seems clear that there are an increasing number of opportunities along a spectrum of financial returns as well as sustainability and impact; everything from negative screening of objectionable sectors used by socially responsible funds, to proactive investment in businesses leading in environmental, social and governance standards, to thematic investments in things like community development, education, healthcare, resource scarcity, climate change mitigation, and renewable energy. I realized that my traditional investment managers had a single focus on financial returns, analyzing performance without any integration of environmental or social returns and risks, which felt two-dimensional, given the abundance of information becoming available about the benefits of impact analysis across investment opportunities.  

After thorough research and conversations with impact investors and impact advisors, I have recently started moving some of my portfolio in this direction. I am now so pleased to see how my fixed income investments include climate change solutions in the form of “green bonds”, which are high-quality bonds invested around the world in high-efficiency water irrigation projects, low carbon waste management projects, solar retrofit solutions, and other climate change mitigation solutions.  I also have investments in stock and fixed income portfolios that do considerably better than their traditional benchmarks in measurable areas like toxic emissions, water use, health and safety standards, diversity on corporate boards, and business ethics.   

This concept of investing in alignment with my values appeals to me on several levels – both practical and personal. From a practical standpoint, it seems logical that those companies who are vigilant about their use of resources and investing in cleaner, more efficient technologies as well as safe, transparent supply chains are those that will be positioned to succeed in the future as well as withstand an increasingly resource-scarce world. From a personal standpoint, I remain intrigued by the idea that in addition to my charitable giving, I can use my investment portfolio to invest in ideas, businesses, places and communities that I care about. I continue to explore impact investing as the field evolves, and hope to be able to expand my work while providing leadership to others.   

Resources: I wanted to share a few educational resources for those interested in learning more about impact investing:

ImpactAssets Issue Briefs : ImpactAssets Issue Briefs are offered as concise articles exploring topics of interest and relevance to impact investors or those interested in learning more about impact investing. 

Sonen Capital’s 2013 Impact Report 

The Case Foundation: A Short Guide to Impact Investing 

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Star Advertiser: White House to honor civil rights commissioner Iwamoto

Being honored by the White House was an incredibly humbling experience. I was uncomfortable being singled-out for work that so many amazing individuals were a part of. I stand in solidarity with all advocates who make a diffence in their communities every day. I also acknowledge the kupuna in the social justice movement - pioneers who had the strength, grace, and audacity to be their authentic selves. Let's continue to all work with audacity and in solidarity to finish the important work yet to be accomplished.

http://www.whitehouse.gov/champions/harvey-milk-champions-of-change