As published on LinkedIn as part of the SheMoney newsletter.
I have to admit, this article was a hard one to write. The intention, in honor of the celebration of Earth Day in April, was to write a piece about investing for positive environmental impact. In other words, investing in a way where seeking a positive financial return does not come at the expense of harming our planet. This is where the hard part comes in. To date, the extent of my personal commitment to investing for positive environmental impact has been limited at best. It’s mostly focused on a few of the ‘nots’, such as not directly purchasing oil and gas stocks. But honestly, that is about it.
So why haven’t I done better? It’s a fair question, and one that I don’t have a particularly good answer for. Mostly it comes down to the fact that because this is such a big issue, it often feels overwhelming, and I have not prioritized educating myself properly. But it’s time. Turns out the universe agrees. As I was pondering where to start with this article, a new report from Veris Wealth Partners landed in my inbox. Its title? The Time is Now. Okay universe, I get it. The time is very much now.
This report is their 2020-21 Impact Report, and it describes how they, as a wealth management firm, are 100% impact focused, including what they do to offset their carbon imprint. I have known many people at this outstanding firm for some time, and therefore I realized they were the obvious place to turn to for guidance on how I, you, all of us, can help align our financial resources for the betterment of the planet. Because this is all our responsibility, and time truly is running out.
To prepare for my interview with Veris, I read up on the history of Earth Day. This annual event is held every year on April 22nd in order to raise awareness on environmental protection. Every year a growing body of research shows the alarming and increasing impacts of climate change, but this is not an article to make the case for why this matters. Even the most conservative scientists now agree that that case is closed. However, just in case you were feeling a bit too cheery today, here are a couple of sobering statistics to consider this Earth Day.
- 40% of the world’s population is “highly vulnerable” to the impacts of climate change
- 2021 was the warmest year on record for ocean heat content, which increased markedly between 2020 and 2021
- 2021 was the warmest year on record in 25 countries, and in areas where 1.8 billion people live
- According to recent projections, we have anywhere from 5-12 years to reverse the effects of climate change
It’s clear that the time is indeed now, and we all can and should do more to reduce our carbon footprint. There are countless resources out there to help you do so, but in particular I recommend this list by Columbia Climate School, which provides you with 35 easy things to do. That being said, this is SheMoney, so it’s time to get back to investing. I recently spoke with Casey Verbeck, Partner – Managing Director of Marketing & Business Development at Veris and author of the Veris Impact Report, and this is what he had to say about the possibilities inherent in positive environmental investing.
JZ: In your recent corporate Impact report, you said ‘you are a 100% impact focused wealth management firm? What does that mean?
CV: Since inception, Veris has worked closely with our clients to help them meet their financial goals while aligning their wealth with their values. We invest with an impact lens across all asset classes, and all products on the Veris platform fall into one of our key investment themes:
- Climate Solutions and the Environment
- Sustainable and Regenerative Agriculture
- Racial and Gender Equity
- Community Wealth Building
Within each of these themes, we seek to find ways to help our clients achieve their impact goals – from land conservation to affordable housing, renewable energy infrastructure, growing a more equitable and inclusive economy, and empowering historically marginalized communities. Our investment platform has been built on years of impact investing experience to provide access to what we believe are some of the leading-edge impactful strategies our society needs now.
JZ: In reading your report you talk about taking an intersectional approach as it relates to your investment themes about environmental and social impact. How did that approach come about and why do you feel it is so important?
CV: Social and environmental challenges are often intertwined. Investing through an intersectional lens means that we seek to find strategies within our themes that address interrelated challenges. For an example of how social and environmental challenges can be interconnected, think of the many ways that climate change is worsening social inequality – especially in communities with high levels of poverty. If droughts or flooding caused by climate change negatively impacts crop yields in a community that relies on subsistence farming, increased food insecurity will follow, which in turn can lead to declining health outcomes. We believe it is critical for impact investors to consider how social and environmental challenges are interlinked when considering which solutions to invest in.
JZ: I assume a lot of your clients come to you seeking positive financial returns and want to do it without harming the environment. If that is their goal, how do you get them started?
CV: We first start by learning about their short and long-term financial goals and their vision for a better future. We do a deep dive into the issue areas they are most passionate about. Then we design a custom portfolio designed to meet their goals that is a true reflection of their values.
If you are looking for a way to get started there are many on-ramps for investors to consider. In today’s growing impact investing landscape, your options are at an all-time high. The market has exploded in the last three years with lots of product innovation to meet rapidly growing investor demand. I say, find a way to start. A few ideas to consider: a carveout (portion) approach of your current assets fully committed to impact, family foundation or DAF investable assets that align with your theory of change, or like most of our clients when they see and understand what is possible, they invest 100% of their portfolio through an impact lens. Ensure you have the right people around you to provide the advice you need. I also recommend getting out there and participating in conferences or networks to support your learning journey. Three great organizations that offer conferences and other learning opportunities are Confluence Philanthropy, NEXUS and US SIF.
JZ: Can you share options if you have smaller amounts to invest, versus larger amounts?
CV: One area I tell people to look into are your local Community Development Financial Institutions (CDFI) and community investment notes addressing climate change. CDFIs in particular, provide a variety of options in the form of debt supporting your local communities in need, ranging from affordable housing projects to renewable energy infrastructure to lending to small business owners. Look at your fixed income allocation and shift to impact notes or loan funds as a place to start. Options will vary based on each individual’s financial situation and impact goals. Many strategies are highlighted in our recently published Impact Report.
JZ: To those who think, “These problems are too big for me to feel like I can make a difference”, what would you say?
CV: No one individual can solve the big environmental and social challenges we face alone. It will take each of us working together. Investors make a much bigger impact when we invest together. When we act as a community, we deepen our understanding of our most pressing environmental and social challenges, and share knowledge of investable opportunities that will move the needle. We are stronger when we are united.
JZ: Anything else you would like to add?
CV: I dedicated my career to impact investing 16 years ago. I come from a modest background and was directly impacted by the economic wealth gap when I was growing up. When I first learned about the ‘3 P’s’ – People, Planet and Profit – I was inspired to use the capital markets as a way to scale significant positive impact by rethinking the business paradigm and overall stakeholders. As investors, innovators, entrepreneurs, industry leaders and as parents we have a role to play in creating lasting systemic change. We need to continue to protect, preserve and improve our precious environment, and remember without a healthy planet we all suffer. By committing to learn from our past mistakes and challenge the status quo, together we will build a better future.
JZ: Thank you Casey and to Veris Wealth Partners for your incredible leadership in the field.
Casey and his team at Veris offer free consultations for those wishing to explore next steps.
Wanting to leave you all with an additional something that was actionable and accessible, I went in search of a short list of Exchange Traded Funds (ETFS) that a person with any amount to invest might consider, and thankfully that is where GOOGLE does comes in handy. This month, in honor of Earth Day, there are a lot of articles being written with specific recommendations and I encourage you to do some searching, and of course, consult your investment advisor. This one in particular seemed worthy of further homework. And, if you are already invested in this manner, please do share how you are doing it.
This is what I know for sure. Every single thing each and every one of us does to care for our planet matters. It all adds up. I am going to hold myself more accountable for knowing the impact of my investments and aligning my dollars with my love for our world and the people and animals that inhabit it, and I hope you do too.
-Happy Earth Day everyone.
The information contained herein has been provided for informational purposes only and represents only a summary of topics discussed. The contents should not be construed as the provision of personalized investment advice or recommendations or an offer to sell or the solicitation of any offer to buy any securities. Rather, the contents including, without limitation, any forward-looking statements, simply reflect the opinions and views of the speaker. All expressions of opinion reflect the judgment of the speaker as of the date of publication and are subject to change without notice.