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Insights from the 2019 Sustainable, Responsible, Impact Investing (SRI) Conference
Introduction
The 2019 Sustainable, Responsible, Impact Investing (SRI) Conference brought together professionals from across the financial industry in Colorado Springs. This blog post summarizes key takeaways and highlights from the conference, shedding light on the evolving landscape of SRI and its impact on our financial world.
Climate Change and Responsible Banking
One of the central themes of the conference was climate change. The importance of mitigating climate change to reduce the need for adaptation and alleviate suffering was emphasized. Notably, 130 banks with over $47 trillion in assets pledged to adopt UN-backed responsible banking principles to fight climate change by shifting away from fossil fuels and aligning with the Paris Agreement.
Shift in SRI Dynamics
SRI has evolved significantly, with an increasing number of attendees using it not only for social and environmental impact but also for better financial returns. While the growth in interest is positive, it’s important to note that shareholder engagement loses its significance when SRI is solely driven by financial returns.
Digital Wealth Services Platform (DWSP)
First Affirmative introduced the DWSP, a new investment option. Investors can input their risk tolerance and SRI preferences to receive a tailored portfolio of individual stocks and bond funds. With an expense ratio of 0.40% for accounts up to $500k, this platform aims to make SRI more accessible.
Presentations and Topics
The conference covered a wide range of topics through presentations, including asset allocation in retirement calculations, the case for and against individual bonds for retail clients, advocacy tools for advisors and clients, opportunities in ESG investing in Asia, investing to combat climate change, and more. Each topic added depth to the discussions.
ESG and Shareholder Activism
SRI emphasizes knowing what you own, what it does, why you own it, and making it better. New rules for investment advisors now require more disclosure, particularly regarding share class selection and compensation.
Decumulation in Retirement
A key concern for many is how to live on investments in retirement. Decumulation strategies include systematic withdrawal, bond ladders, and annuities. Strategies must address longevity risk, liquidity risk, and inflation risk, among others.
Economic Outlook
The economic landscape was discussed extensively, highlighting both strengths and weaknesses. While there’s been a prolonged economic expansion, concerns include GDP growth, wage growth, trade wars, and the potential for a recession in manufacturing and non-manufacturing sectors.
Water Crisis and Impact Investing
Gary White from Water Equity discussed how investing in solving the water crisis can positively impact the world’s poor, emphasizing the importance of microfinance.
Combatting Climate Change through Investments
The fight against climate change was a top priority for institutional investors. Various speakers discussed ways to invest in companies working towards environmental productivity and reduce exposure to climate-related risks.
The Next Wave of Impact: Professional Athletes
Professional athletes are increasingly getting involved in impact investing. They are using their influence and capital to make a difference in their communities, focusing on areas such as affordable housing and mentorship programs.
Hemp and Sustainability
Hemp, distinct from marijuana due to its low delta-9 THC content, has the potential to revolutionize various industries, from textiles to agriculture. It offers sustainable solutions, reduced environmental impact, and economic opportunities.
Compliance and Fiduciary Duties
The importance of compliance and fulfilling fiduciary duties was highlighted, including SEC rules, proxy voting guidance, share class selection disclosure, and evaluation forms.
Leveraging Social Media
Professionals were encouraged to use social media effectively, including LinkedIn for networking, video updates, and engagement in discussions on ESG issues.
YourStake
YourStake, a B-corp, offers tools for impact evaluation and socially responsible investing. It’s a valuable resource for foundations and trusts interested in SRI.
Conclusion
The 2019 SRI Conference revealed the growing significance of responsible investing, especially in addressing climate change and social issues. As the SRI landscape evolves, investors and financial professionals must stay informed and engaged to make a meaningful impact on the world through their investments.