By Patricia Farrar-Rivas, CEO

A while ago, I had a provocative conversation with two good friends: Rha Goddess, founder of Move the Crowd, an organization that supports entrepreneurial training for next generation movers and shakers, and Jessica Norwood, founder of Runway Project, aiming to solve the “friends and family” seed funding gap for African American entrepreneurs.

We talked about how many of the issues we face in our country today stem from inequality, lack of inclusion, and biased narratives around people of color. By the end of the conversation, we all recognized these types of reflective conversations are vital in moving us toward inclusivity.

We also felt compelled to create opportunities where this kind of dialogue could happen more frequently.

So Rha, Jessica and I began hosting Uncommon Conversations, a series of intimate gatherings over dinner to discuss how to reshape the prevailing cultural narratives and determine what active part impact investing can play.

Uncommon Conversations tries to bring in a range of diverse voices, including artists, investors, entrepreneurs, and community leaders. Together, over a shared meal, we explore new ideas and discuss the importance of resilient, inclusive cultures.

 

Tackling Big Issues

Our series began in Baltimore, during the 2015 Social Venture Network Gathering. We convened an amazing group of change-makers and influencers to answers questions like:

• What is the potential of transforming culture through impact investing?
• How do we begin to see culture as part of our strategy for impact?
• What does a society that embraces cultural differences look like?
• What does it mean to shift real power to the voices and experiences that shape our culture?

The words of the phenomenal author and social activist the late Grace Lee Boggs centered our conversation and provided true inspiration for the group. Grace led a life infused with critical conversations and demonstrated that they are an important thread of movement building. Guided by her extraordinary legacy, we used our time to enjoy the process of new ideas and new meanings being formed.

Next, we moved to New York and Los Angeles, where we asked guests to reflect on our responsibility to shape and mold the country’s culture. We viewed a beautiful video of Nina Simone, who talked about the role we can all play in making progress to inclusiveness. We also reviewed the work of the renowned artist, Frida Kahlo. Her story of strength in creativity is still relevant today, and it provided inspiration for the evening. Frida managed a life of complexity, while embracing the duality of self. These two cultural icons anchored our conversations as we shared ideas and reflected on these questions:

• How will we be responsive to culture in a way that reflects the imperatives of our times?
• Are we supporting meaningful financial and entrepreneurial lanes that open up space for the molders and shapers or are we requiring assimilation?

 

Food Is Love

Nothing illuminates culture quite like food, which was our focus for Uncommon Conversations San Francisco. Our venue for the evening was 18 Reasons, a community cooking school supporting individuals and families discovery good, healthy, affordable food. The food we eat tells the story of where we come from and where we’re going. It determines our health and how we survive. As the demand for more local, organic food increases, we can’t ignore that the people who bring us our food from factories, kitchens, and fields often can’t afford to eat the food themselves. We challenged ourselves to consider:

• What is our responsibility to making the country’s food system equitable for workers in the industry?
• How do we provide broad ownership and advancement opportunities in food systems?

More recently, we convened Uncommon Conversations at the Confluence Philanthropy annual gathering in New Orleans, cohosted with Dillard University’s Ray Charles program in African American Material Culture. Our conversations centered on supporting women and girls through the arts, and touched on themes including some of the controversy around artistic expression and how to keep stories alive with art. Big Chief Delcour from the Mardi Gras Indians shared his experiences as a cultural leader with us. Another artist, B Mike, stunned us with his larger than life artworks capturing African American heroes and New Orleans locals (see title image).

We feel, and have felt for a while, there has been an accelerating cultural shift cultural shift towards inclusiveness with regard to gender equality, equity, and agency for people of color. Lately, we’ve all witnessed a very quick and rapid change in the predominant narrative around this hard-fought progress. It is our belief that the underlying cultural shift towards inclusivity is still happening, and it is strong. The question we need to answer is this: “How do we shift the predominant narrative?”

 

Pressing Ahead

The richness of the Uncommon Conversations is a treat in and of itself. But our goal is for these conversations to inspire more individuals, especially impact investors. We want them to think about how they can support cultural entrepreneurs and movements. Ultimately, we want to build frameworks that integrate culture, inclusiveness, freedom, and agency into economic analyses.

We are in an unprecedented moment of change. As we explore the intersection of impact investing and culture, we deepen our collective understanding of what impact really means. We can identify new ways to disrupt our cultural norms and invest in equitable and culture shifts that are equitable and inclusive.

By Michael Lent, Partner, CIO

US SIF: The Forum for Sustainable and Responsible Business released its 2016 Biennial Report on US Sustainable, Responsible and Impact Investing Trends, and there was much good news in it.

The report, issued on Nov. 14, found that over $8.72 trillion in assets – or one in five dollars invested under professional management in the US – are now invested using sustainable, responsible and impact investing criteria.  This total is up 69% from 2014.  There are now hundreds of investment options across all asset classes a trend that has been growing substantially over the past several decades.

This is truly remarkable, but it wasn’t so long ago that things were very different.

When I began my career, Impact investing was in its infancy.  I remember attending a Council on Foundation conference in 1995 with a dozen foundation representatives discussing what we called back then, “Socially Responsible Investing.”  Twenty-one years later, I spoke on a panel at the Mission Investors Exchange conference, presenting to several hundred foundations and close to five hundred attendees focused exclusively on impact investing.

In the intervening 20+ years, Impact Investing went mainstream. Institutional investors are incorporating ESG (Environmental, Social and Governance) factors into their investment process, and traditional investment management firms are increasingly offering ESG investment options.

At the same time, companies around the globe are rapidly integrating sustainability into their core business models to increase their competitiveness, innovation and lower risks. We are moving from a time of carrot and stick approach to corporate change.  Increasingly we have sustainable companies receiving investments from impact investors.  This is a virtuous cycle and it is important to put into perspective how far we have come. We’ve come a long way.

Underlying Trends

In my view, three key trends were made abundantly clear in this report.

First is the rapidly growing interest in climate investing. More than $2.15 trillion of institutional assets apply climate change criteria.  This is a manyfold increase, and it reflects a growing awareness among large institutions about climate change risk.  Institutional investors’ increasing focused on this issue could lead companies to track their carbon output, to identify ways to lower it, and to provide innovative, low-carbon products and services.  It is one reason to have optimism about the future of the planet, despite the recent election results.  As a strong supporter of climate change solutions, we help many clients divest from carbon intensive industries and invest in other solutions.

Second is the growth of the community investing field.  The assets invested in Community Development Financial Institutions have doubled from $60 billion to $120 billion in two years.  These are the credit unions, banks and community loan funds that provide financing for critical affordable housing, social services, and small businesses in low-income communities and communities of color.  Historically, CDFIs have received most of their funding and capital from public sources or from banks and insurance companies under the Community Reinvestment Act. On a very hopeful note, private investors significantly increased their assets in community investing. There are great social, environmental and economic challenges in low-income communities. Access to capital is essential to long-term change in these communities.

Third, while a significant number of managers and investors say they are implementing ESG, it is not clear exactly what that means.  As an industry, there is definite room for improvement and transparency. Today, many managers are not specific about how they integrate ESG factors into their investment process. This vague application of ESG criteria is due to the lack of deliberate investment process. Some funds and managers want to be seen as “doing ESG investing to respond to client demand,” but are unsure of what to do.  For investors, you cannot simply pick an “SRI” fund and be satisfied that it actually has social impact. You must also understand what the manager is really doing to create impact.

Where We Go From Here

Looking ahead, I think the US SIF Trends report brings up four things we should think about:

• While we have made great strides in offering more investment options, we still need more investment solutions across different impact themes, such as Gender Lens Investing, sustainable real assets, and on broader ownership strategies.

• We need greater transparency from ESG managers and funds, so we can understand if they are actually having any impact. It’s not enough to say we do SRI. Investors need to know what and how managers are creating impact.

• Investors shouldn’t underestimate the importance of finding a wealth manager or advisor who understands the impact field. There is a fair amount of complexity and a need to sort out the managers and funds that best fit your specific financial and impact goals.

The good news is that we’re making real progress in changing the way people and institutions invest.  Together, we can keep it going and bring about even more positive change.

To read Veris white papers on climate change, gender lens investing and other topics, please visit the Research section of our website.

 

Photo Credit: Ronald Tagra