Veris Wealth Partners’ Equity, Diversity and Inclusion (EDI) Task Force Case Study Published as Part of the JEDI Investing Toolkit

by Roraj Pradhananga, Partner – Senior Research Analyst

GenderSmart, a global field building initiative dedicated to unlocking the deployment of strategic, impactful gender-smart capital at scale, recently launched a Justice, Equity, Diversity and Inclusion (JEDI) toolkit. This JEDI toolkit is designed to encourage allocators, investors and intermediaries to understand the dimensions of JEDI investing and start applying gender and JEDI lenses throughout their investment processes.

The GenderSmart JEDI working group created the toolkit with the hope of improving investment decision-making, bringing on board new portfolio or fund managers, improving existing portfolios and enacting organization change for both people and processes. These goals are in line with Veris Wealth Partners’ vision, our firm’s emphasis on our Racial and Gender Equity theme, as well as the recommendations our own EDI taskforce – consisting of Patricia Farrar-Rivas, Jane Swan and myself –  have made over the last two years.

As part of the JEDI Toolkit, GenderSmart published a case study profiling the work of Veris Wealth Partners’ EDI Task Force. As Partner and Chair of our EDI Task Force, they asked me to describe our approach and I responded, “For Veris, EDI is not an exercise in box-checking. The financial services industry’s approach too often strives to increase diversity in management without sufficient consideration of embedded structural EDI obstacles. Black, Brown and Indigenous voices remain severely underrepresented across the financial services industry. To truly scale up impact and drive racial justice across the industry, a majority of firms will need to adopt an EDI approach that is similar or better than ours.”

How is Veris developing this EDI strategy and applying an EDI lens in investments?

Veris’ Investment Committee approved the EDI task force’s recommendations to significantly increase the number of EDI managers and managers with an explicit EDI lens in their investment process over the next five years. This requires us to be intentional in building our priority pipeline and due diligence and approval processes. We have approved funds with an EDI lens – including funds that focus on employee ownership and combine gender, race and community voices.

Veris’ EDI task force is mandated to assess existing investment practices, make recommendations on EDI goals and integrate EDI in our investment decisions. In 2020, we enhanced and amplified EDI elements throughout our due diligence questionnaire. This new data was instrumental in creating our EDI Manager framework and an Advancing Racial and Gender Equity (ARGE) assessment tool that classifies our approved managers in five different categories – from EDI watchlist (needs improvement) to EDI manager (best-in-class). The other categories are EDI aspirational, EDI firm and EDI investment process.

The ARGE tool measures diversity at all levels of the firm and assesses EDI lens of the investment process of the various fund managers. Pay equity, employee benefits, implementation of EDI policies, portfolio company engagement, shareholder proposals and disclosure of EDI proxy voting guidelines and records are among some of the reviewed data points.

Our next steps include engaging our fund managers, communicating best practices and helping them make improvements. We also performed a self-assessment using the ARGE tool and Veris is not yet an EDI manager. We are asking our non-EDI managers to join us on this transformation journey. Collecting data continues to be our biggest challenge. The success of our EDI approach is dependent on our managers’ willingness to engage, share data and implement changes themselves.

Veris Wealth Partners’ EDI Vision and Commitments

Veris is an impact wealth management firm with a vision to build a just, equitable and sustainable world and we believe equity (which is purposefully listed first), diversity and inclusion (EDI) must touch every aspect of our work. Veris strives to transform our firm and the industry in pursuit of this vision, such that along with this vision, mission and values, EDI is an integral part of our investment philosophy. Veris strongly believes EDI should be embedded firm-wide in every aspect: mission, vision, values, culture and policies (including hiring, retention, mentoring, promotion, and vendor/supplier selection). Our signatory commitments include Confluence Philanthropy’s Belonging Pledge, Due Diligence 2.0, Investor Statement of Solidarity & Call to Action to Address Systemic Racism and Women’s Empowerment Principles. Veris approaches commitments with great intention, evaluating internal changes required to ensure they are accountable.

Click here for a recording from the launch of the GenderSmart Justice, Equity, Diversity and Inclusion (JEDI) Investing Toolkit

Roraj Pradhananga is a Partner and Senior Research Analyst at Veris Wealth Partners. He leads the Investment Research team and is a voting member of the Investment Committee.

The information contained herein is provided for educational purposes only and is subject to change without notice.  

2022 CEO Letter

by Stephanie Cohn Rupp, CEO

It’s with great pleasure that I share with you reflections on 2021 from my perspective as CEO as well as Veris Wealth Partners’ vision and priorities for 2022.

2021 in Review: A Year of Growth

I am excited to report that 2021 was a year of significant growth for our firm. Veris exceeded $2B in Assets under Management (AUM) by October. Many new clients joined us in 2021, which resulted in 15% organic annual growth rate for the year.

Last year was also a year of growth for our team. We were extremely pleased to welcome Roraj Pradhananga, our Senior Research Analyst who leads investment manager due diligence, thematic research and evaluation of impact metrics, as a Partner in the firm in December of 2021. Veris also recruited fabulous new colleagues in 2021: Sandra Guerrero joined us as an Advisor in San Francisco; Tracey Lynch became part of our client service team in Portsmouth; Susan Daly took the role of Executive Assistant to the CEO; and Mihir Mehan joined the Veris team as a Research Analyst in NYC after completing his Berkeley Haas MBA. With resumes featuring firms such as JP Morgan and BlackRock, these talented individuals bring deep experience in the worlds of finance and investment across the globe – from the U.S. and Mexico to South and East Asia. However, by joining Veris, our new colleagues were looking for closer values alignment. Each has demonstrated an unwavering commitment to our mission in addition to impressive skill sets, track records and professionalism.


On the research side, Veris developed a novel, thorough and longitudinal approach to due diligence focused on Equity, Diversity, and Inclusion under the leadership of our CIO, Michael Lent. We are applying this framework to all our managers – and to ourselves – to ensure that we increasingly have more diverse managers on our investment platform. We are systematically monitoring the EDI commitment and progress of our current managers and as part of our commitment to equity and inclusion will give precedence to managers who are more diverse. We have 30% minimum requirements of racial and gender diversity at the ownership and staff level of our managers. For those managers who are not yet sufficiently diverse, we request a commitment and a DEI action plan.

We also have implemented changes to our recruiting approach by using best practices in the industry. For example, all resume names and addresses are deleted so that hiring managers cannot unconsciously exert gender, ethnic or other biases in their selection process. We also have undergone thorough DEI training on the nature of privilege and racial inequality – which is an ongoing journey for each of us and for the firm as a whole.

Policy & Shareholder Engagement

In 2021, we offered our clients 560 shareholder engagement options and our clients chose to sign 101 of these letters to corporate boards. The initiatives ranged from diversity data disclosure, consumer packaging, executive pay, and pesticides – to name a few. We are working with our partner As You Sow to implement a Shareholder Engagement Tracker which will help us see real time updates on shareholder initiatives.

Veris was also a signatory to many important initiatives in 2021, including an investor Policy Letter to President Biden to advance sustainable investment expertise at the Department of Labor and the SEC. Our engagement ranges from sending letters to Congress and the White House to advocating for positive change at the state-level on issues such as energy efficiency  and the need for parental leave benefits. Veris also participated in a Dept. of Labor comment period to share how fiduciaries consider ESG Funds for retirement planning in partnership with US SIF.

We will continue to strive to help our clients become more active asset owners to express their values through the corporate shareholder engagement process and we will, as a company, expand our policy advocacy initiatives in 2022. We believe these levers will advance our clients’ mission.

Our Focus in 2022

We started 2022 with an exciting new Partner, Rosemont Investment Group, which joined Veris as a minority passive investor. Rosemont brings an incredible depth of expertise to the firm and will help us think through our next challenges as we further modernize our systems and client service and scale. Our goal is not to grow at all costs – we remain squarely focused on our clients and mission. We hope to set a new precedent by demonstrating that even in an ocean of consolidation and acquisitions companies can remain independent while remaining 100% focused on ESG and impact investing.

This year, Veris will be focused on three main priorities: to advance our leadership role through innovation in impact investing, improve client service and operational efficiencies, and invest in human capital and DEI (Diversity, Equity and Inclusion). We will be hiring many more “Verisians” to meet our high client demand and we will keep you updated on our new client impact report and updated offering.

Lastly, as COVID cases are declining, we hope to be able to safely meet again in person soon – as our team has missed interacting with our clients, colleagues, and our friends in the industry. Together we form a true community of change-makers and we look forward to being able to celebrate our causes and our work together again.

Yours in Impact,

Stephanie Cohn Rupp, CEO

Veris Wealth Partners

Standing Our Ground

by Stephanie Cohn Rupp, CEO

By now you may have heard the news that, as of January 31, 2022, the private investment firm Rosemont Investment Group has partnered with Veris as a minority investor. We are thrilled to share this news, as this move means that we are successfully managing succession at Veris by doubling down on our independence and our commitment to impact investing by seeking out innovative financial partners as well as promoting from within.

Veris Wealth Partners was founded by five socially responsible investors in 2007. Over the years, Veris has grown to become a leader in the industry as a fully-committed Impact Wealth Manager. To facilitate a smooth transition to impact-focused next generation leadership, we began conversations about succession and exploring scenarios several years ago, and we have been working for the past few years on the transition. Three of our founders retired prior to 2021, and Patricia Farrar-Rivas, our previous CEO who led Veris for over 13 years, will be retiring as of March 30th, 2022. The strategic question for Veris all along and particularly during this past year has been how to handle this succession while staying true to our clients and our mission.

We did not want an investor requiring an exit from its investment after a few years and focused on finding an investor with a long-term commitment to Veris and its multigenerational clients. We finally found Rosemont Investment Group – a permanent, RIA expert minority investor who now owns a minority interest in Veris.

Rosemont is an ideal partner for Veris in many ways. They respect Veris Wealth Partners’ legacy as a leader in impact investing. Furthermore, their dedication towards the long-term success of Veris (including supporting the promotion of partners from within) will contribute significantly towards Veris’s long-term commitment to remaining an independent Impact wealth management firm, of which there are now only a few such firms still standing. This was recently evidenced by the promotion of our Senior Research Analyst, Roraj Pradhananga, who became a partner of Veris at the end of 2021.

We see a variety of benefits stemming from our new relationship with Rosemont to Veris. This financing model allows us to remain a stand-alone firm, now one of the few Impact-only Wealth Management firms in the United States. Our firm’s independence is what allows us to invest in our policy work and other non-traditional activities for a wealth manager, such as our research to help sectors such as Regenerative Agriculture, Gender Lens Investing and Racial Justice to grow.

Furthermore, our new partners at Rosemont, Chas Burkhart and Brad Mook, have 18+ years of experience investing in the RIA space. They are helping us further develop and refine our business so we can carry out Veris’s mission. Together, we believe we can create a stronger, larger, and more modern Veris. As experienced wealth management specialists, Rosemont can help Veris grow sustainably while we remain at the forefront of impact investing.

In sum, this new partnership with Rosemont will help Veris remain financially strong, independent, and innovative which will enable us to further our mission.

Yours in Impact,

Stephanie Cohn Rupp, CEO

Optimism that Leads to Achievement: A Letter from Patricia Farrar-Rivas and Stephanie Cohn Rupp

“Optimism is the faith that leads to achievement. Nothing can be done without hope or confidence.” ― Helen Keller.

After a tumultuous 2020, the world saw a shocking beginning to 2021. Despite the heartache and political and economic volatility we have seen signs of resilience that inspire optimism. We are optimistic, but understand we must all do our part to rise to the challenges of this moment. This dark time has led Veris Wealth Partners to become even more staunch in our commitment to growing equity and social justice and environmental solutions through impact investing.

Today, jointly as leaders of Veris, Patricia Farrar-Rivas as founding CEO and Stephanie Cohn Rupp as incoming CEO, we wanted to take stock of this last year and share with you some of the highlights that are fueling our optimism, as well as our vision of what Veris hopes to achieve with our incredible clients, managers and partners in 2021.

Our Efforts In 2020

Externally, Veris:

  • Significantly increased investments in Community Development Financial Institutions (CDFIs). Several of these CDFIs shifted focus to respond to the COVID19 crisis and participated in the PPP program to move critically needed funds to nonprofits and businesses led by women and people of color.
  • Continued to invest in racial equity through seasoned and emerging managers leading by example.
  • Advanced our policy work including meeting with the SEC on ESG
  • Supported several amazing non-profits, including The New Georgia Project, an organization dedicated to fighting voter suppression in Georgia, and four organizations helping to feed hungry families and solve the challenge of food insecurity in communities across the United States: Gather, City Harvest, Food Bank of the Rockies and the Emergency Family Assistance Organization (EFAA).
  • Published three research pieces including our 2019-2020 Impact Report, a brief on The Convergence of Regenerative Agriculture, Forestry and Climate Solutions and a case study on PG&E, Climate Change and the Sustainable Path Forward.

Internally, Veris:

  • Lived our values by remaining 100% impact focused.
  • Transitioned fully to remote work to protect the health of our staff during the pandemic, while also growing our asset base by over 11%
    Renewed our commitment to independence in the face of staunch market consolidation to preserve that very mission.
  • Veris has started a complete review of its policies and processes to ensure we are aligned with best practices around Equity, Diversity and Inclusion
  • Finalized an internal succession planning effort by promoting two new Partners as two Founding Partners retired.
  • Successfully transitioned leadership from Patricia to Stephanie after collaborating for over 18 months with dedication and openness to honor our past while investing in our future.

While these may seem like two distinct spheres of our firm – our work externally, and how we run our business internally – they are really two sides of the same coin. We could not be an authentic B-Corp focused on social and environmental impact without concurrently implementing these values internally and staying the course of our ideals.

Unlike many financial institutions, we have recommitted to our long term independence and to remaining focused on solving social and environmental challenges, which requires both financial and business acumen. Veris set an important precedent as a 100% impact focused investment advisor while becoming a profitable business capable of reinvesting in its own growth and maintaining on-going succession mechanisms of retiring partners and advancing employees to become partners. All these goals are intimately linked to protect our independence which allows us to stay true to our mission.

The Firm’s Areas of Focus 

In 2021 Veris will remain focused on authenticity, independence, and our mission.

To better serve that mission, we have updated our firm’s values to better reflect who we are today and demonstrate the principles that guide us. We have also updated and refined our investment themes to better meet the most critical challenges of today.

Veris is well known as the first Registered Investment Advisor (RIA) to have led Gender Lens Investing as an approach and now we are working to develop a more robust investment platform with solutions focused on Racial and Gender Equity.

We also aim to expand our work around Regenerative Agriculture and Renewable Energy Infrastructure solutions and added a theme dedicated to Community Wealth Building to ensure more emphasis on this challenge and potential solutions.

What We Aim to Achieve

We aim to grow our impact assets under management while we continue to serve our clients with a focus on partnership.

We will leverage digital solutions to make the experience of wealth management simpler and more interactive. In partnership with Confluence Philanthropy, USSIF, CERES, As You Sow, RFK, Nexus, GIIN, B Lab and many other crucial players in the sector, we will collaborate extensively with the field of sustainable and impact investing.

We believe that to build a more equitable, just and sustainable world, we have the responsibility to leverage not only investing but also shareholder activism, policy and dialogue to ensure we effectively pursue our mission.

We look forward to collaborating with our clients and colleagues in the sector, furthering the mission of our firm and our clients, and continuing to fight for social justice and the environment. Together, we will work to ensure that 2021 yields a brighter future for us all.

Veris Q419

Market Recap: 2019 Finishes Strongly

By Jane Swan and Roraj Pradhananga

Positive returns in the fourth quarter helped propel all major indexes

The year started with a robust recovery from the negative returns at the end of 2018, followed by a resting period in the third quarter, and then more growth at the end of 2019. Continued moderate expansion in the economy was a tailwind for investors, with total return for both bond and stock investors at the high end of historic norms. The greatest gains were from risk asset classes (stocks, real estate, and high yield bonds). Investors in investment grade bonds were also rewarded. Within the Russell 3000 (broad index of US stocks), the strongest returns came from the largest components. Technology jumped 14.3% in the quarter and 46.7% for the year. Financials were up 7.6% in the quarter and 32.9% for the year. Every sector other than Energy (up 9.6% for the year) increased by double digits. Investors were rewarded by the almost 11-year stock market expansion, but the gains have been not evenly translated to all participants in the economy.

Since the stock market began its recovery (March 2009) and the end of the last recession (October 2009), much has changed. Unemployment has fallen from 10% to under 3.5%. Inflation remains low, currently below the target rate of 2%. Average family income (when measured using the statistical mean), has grown by 35%, which is just over 3% per year. Profits to stock owners, measured by the S&P 500, are now 498%. Companies have benefited from low interest rates, corporate tax cuts, increases in worker productivity, and in many cases, reductions in regulations.

Market Recap Q419

Uneven Gains
In statistics, there are two frequently used approaches to calculating an average (or mean) and median. In common usage, average almost always assumes use of the mean method of calculation. The process for finding the mean considers all observations and divides by the number of observations. If you have ten observations of hourly wages and nine of them reflect $10 per hour and the 10th observation reflects $500, the average hourly wage of those 10 people is $59. Using the statistical measure of median, we organize all observations in numerical order and take the mid-point observation.

In the example above, the median worker earned $10. As income inequality grows, we believe that monitoring the difference between average (mean) and median becomes an important measure of the financial strength of the workforce. This is demonstrated in the graph below.Family Income In U.S.

The green line showing the average (mean) income for families has grown at a much higher rate than the blue line, which represents median income. If the highest wages grow while other wages remain steady, the average will grow while most workers experience no change.

A recent JP Morgan report noted the differences in spending rates between families earning the highest 10% of incomes and the other 90% of U.S. families. They found that the highest earners spent just 68% of their income, while the rest of the population averages spending of 101% of income. The divide between average and median earners and the spending patterns of high and lower earners has implications on the growth rate of the broader economy. If spending rates are highest among those with the slowest growing income but low among those experiencing high rates of growth in real income, the consumer contribution to economic growth will be limited. It also has implications for the savings rates of most families.

In the years since the end of the recession, the economy has grown at an average annual rate of 2.2%. The average economic growth during expansions of the last 50 years has been 3.7%. The majority of GDP (almost 70%) comes from consumer spending. Low growth in wages for the majority of American families during this economic expansion is a part of the explanation for the lower-than-average growth of the economy during this long, but tepid recovery.

Meanwhile, this limited growth in most wages mixed with extremely accommodating monetary policy, stock buy backs and growing dividends have propelled the stock market to record highs despite this slow growth environment. We have a sense of the economy doing better than it is because we see the stock market soaring. While observed by many, the benefits are largely constrained to the top 10%. Market strength and economic strength are often related, but they are not the same thing.

2020 Planning
With election year and impeachment on everyone’s mind, Veris monitors for changes to the pillars of the economy, which are the strength in corporate earnings and bond markets. We also recognize that portfolio management is a long-term process. An important factor is not just structuring a portfolio for growth, but also structuring a portfolio to provide for spending needs during periods of decline or volatility. As some investors celebrate these historic market gains, we invite and encourage all of our clients to reach out to your Veris wealth advisor to be sure your portfolio is positioned for the road ahead.

In Memoriam: Jud Bergman, Chairman & CEO of Envestnet

In Memoriam: Jud Bergman, Chairman & CEO of Envestnet

The Veris team mourns the sudden loss of Jud Bergman and his wife, Mary Miller-Bergman, with great sadness.

Jud was more than just a great friend and strategic partner of Veris.

Jud was a visionary and an optimist, a philosopher whose maverick ideas changed the financial world, a dealmaker extraordinaire, a gracious man with a big heart, and a person whose modesty never wavered despite his incredible success. He had a unique ability to share his joy, his curiosity and love of life.

Veris Co-Founder & CEO Patricia Farrar-Rivas said Jud was one of the most thoughtful and unique individuals she has worked with during her 35-year career. Patricia started collaborating with Envestnet in 2000, when the firm had $8 billion in assets and a few dozen employees. Today, it has more than $3 trillion in platform assets and 4,000 people scattered around the world.

“Jud was a truly creative and gifted thinker,” Patricia said. “He had an expansive vision about the financial services industry and impact investing. He knew before others that impact investing could change the world. As a leader, he also had a clear idea of where he wanted to take his company. He saw over the horizon and welcomed others to come along with him.

“Each year, Jud delivered an amazing annual presentation at the Envestnet summit. He included cultural references and historical-point-of-views that were both surprising and illuminating. Then we would go to his favorite blues joint or go to see his kids Natalie and Elliott’s Indie Pop band Wild Belle. It was so refreshing.”

One Big Extended Family
Patricia continued, “Jud was very kind and warm. I am still grateful to him while my sister was battling cancer. He spent so much time with me and helped me through a difficult period in my life. That’s who Jud was: He truly cared about people. You got that true sense of family when you were with him and his team. He connected with people. He never became too aloof, too busy or too important to take the time to talk.”

Veris Co-Founder and Partner Anders Ferguson also worked closely with Jud and Bill Crager, the company’s former president and now CEO of Envestnet.

Anders said, “Jud was an optimist. He saw what was possible. He understood the ongoing integration of finance and information before many others did. And, he wasn’t scared to follow his vision. He enjoyed being philosophical and always thought differently about financial services. That’s one reason he loved to make deals. Everybody used to joke about it: ‘What is Envestnet going to buy next?’ One way or the other, they always made those deals work.

“My experience with Envestnet was similar to Patricia’s: The company, under Jud’s leadership, felt like family. That’s pretty difficult when you grow from a handful of people to thousands. Jud was a man of big ideas who made everyone part of his success. I will miss him. He was a good man and a real loss at a time when the financial services industry is gripped by cynicism and greed. Jud was a gem.”

On behalf of the team at Veris, thank you Jud. We are thinking about your family. And to our colleagues at Envestnet, our thoughts are with you.

The Veris Team

Veris has worked with Envestnet for the past 12 years. Veris serves as the strategic advisor to Envestnet’s impact investing platform.

Compass with numbers behind

Markets Strong in Second Quarter 2019

By Jane Swan, Partner and Senior Advisor

Positive returns across investment markets seem to have largely removed the decline and worry from the end of 2018 from our memories. U.S. equity markets added slightly to first quarter growth with large cap stocks up 4.3% in the quarter and 18.5% year-to-date (YTD). Small cap stocks are up 2.1% in the quarter and 17% YTD. International developed markets were up 4.2% in the quarter and 14.5% YTD. Emerging market stocks were up 0.7% for the quarter and 10.8% YTD. Fixed income markets were also positive on speculation of a reduction in Federal Funds rates playing a part in pushing returns higher. The 10-year treasury was up 4.2% for the quarter and 7.4% YTD. Corporates were up 2.6% in the quarter and 5% YTD, and municipal bonds were up 1.7% for the quarter and 3.8% YTD. High yield bonds were up 2.5% in the quarter and 9.9% YTD. They recovered considerably from the end of 2018, when there appeared to be more concern in low credit markets about future economic weakness. Real estate was also positive, with the REIT index up 1.8% in the quarter and 19.3% YTD.

Markets Strong in Second Quarter 2019


Within domestic equity markets, all sectors but the energy sector continued the positive returns of the first quarter. Even with the negative returns in the quarter for energy, all sectors are positive YTD. The solid rebound from the negative returns at the end of 2018 suggests investors may have a renewed confidence within financial markets. Some of this confidence can be tied to hints of possible accommodation by the Fed. We believe it is somewhat hard to understand this stance. Typically, a rate reduction is a tool reserved to stimulate a suffering or potentially suffering economy.

Markets Strong in Second Quarter 2019

Markets Strong in Second Quarter 20192

The argument for a potential rate cut is thought to be a softening job market. Growth in the economy can come from two key sources. If the number of workers grows while the productivity (value of goods produced) of each worker stays steady, the economy is likely to grow. If the number of workers stays steady but productivity per worker grows, the economy is likely to grow. During a recession, layoffs lead to a decrease in the number of workers, which eventually leads to an increase in the productivity of each worker and the economy again will grow. During an expansion, the number of workers often grows more robustly than the increases in productivity. Today’s potentially slowing rate in the number of workers with a modest level of productivity growth, is raising some concern that continued economic growth may become more fragile.

Markets Strong in Second Quarter 2019The forecasted cut in the Federal Funds rate aimed at prolonging economic growth is part of what has created the slight inversion to the yield curve. An inverted yield curve means that bonds with longer maturities pay a lower yield than bonds with shorter maturities. In the curve chart to the right, you see that five years ago, bonds of longer maturities paid a higher yield than bonds of shorter maturities. The current yield curve shows yields lower on some longer maturities than those of the shortest maturities. In an economy expected to grow, investors seek to be compensated more to have their funds tied up for a longer period of time. In the past six decades, the yield curve has inverted for three months, seven times. In each case, the economy entered a recession within two years. While this isn’t a statistically significant enough number of observations to draw a confident conclusion, it raises some concern that a prolonged inverted yield curve can be a sign of a soon to be slowing economy.

In this summer of global record heat, we believe there are obvious needs for growth in productivity and workers to combat climate change. New York City has joined eight U.S. states and over 100 cities and counties4 committed to transitioning over the next few decades to 100% renewable energy. This means that each community would produce more energy from renewable sources than it consumed. Getting there will require both workers and increases in productivity, which could play a role in economic growth. Without renewable energy targets from the national government, it continues to be up to cities, counties, states, and business to take the lead in creating this new economy.

As the stock market continues its longest expansion of our lifetimes, we invite our clients to connect with their wealth manager and evaluate their portfolios ability to meet their goals over a variety of market conditions.

1 PMC Envestnet Capital Market Report 7/3/2019
2 U.S. Bureau of Labor Statistics, Private Non-Farm Business Sector: Labor Productivity [MPU4910063], retrieved from FRED, Federal Reserve Bank of St. Louis
3 US Department of the Treasury
4 Sierra Club “100% Commitments in Cities, Counties, & States”

Refugees Walking

Collective Consciousness and the Refugee Crisis

By Alison Pyott, Partner and Senior Wealth Manager, and Rebecca Orlowitz

Many of us are struggling with the current global refugee crisis and seeking some small way to make a difference. Ban Ki-Moon wrote an op-ed for The New York Times titled, “The refugee crisis is a test of our collective conscience.” The crisis affects all corners of the world. Refugees face a host of common issues as they seek peace and security, ranging from the trauma of the refugee journey itself, experiencing or witnessing violence, challenging humanitarian conditions in refugee camps, prejudice from host communities, a lack of self-reliance and livelihood, and even problems
arising from resettling or returning home. Should refugees successfully overcome these obstacles, they must still cope with the trauma for generations to come.

At the end of 2017, a record 68.5 million people around the world had been forced from their homes, including 25.4 million refugees, according to the United Nations refugee agency. Only 102,800, less than 1% of the total number of displaced, were admitted for resettlement in 2017. The terms refugee and refugee camp imply a temporary situation. But this is not a new crisis, and for many refugees their situations are far from temporary. Some refugees have lived their entire lives in camps. Palestine refugee camps have existed since 1948, Mae La refugee camp since 1968 and Dadaab Kenya since 1991, to name a few.

What To Do?
The situation is overwhelming and absolutely a test of our collective conscience. As global citizens, we can use our awareness, energy and philanthropy to help. The impact investor has additional options. We can question how public companies are involved in the refugee and immigration crises. Are they or their supply chains involved in forced or child labor, unfair working conditions, human rights violations, or exploitation of undocumented workers? Companies with higher governance scores are often less likely to engage in these practices.

Divesting from private prisons is another option. There are two publicly traded private prison operators, GEO and CoreCivic Inc. According to the Migration Policy Institution, as of August 2016, nearly three-quarters of the average daily US immigration detainee population was held in facilities operated by private prison companies. That’s a sharp contrast from a decade ago when the majority were held in ICE-contracted bed spaces in local jails and state prisons. The industry’s bottom line depends on incarceration for investor profit.

Investing in solutions is another option for the impact investor. Community development finance institutions (CDFIs) work in many US communities. They deliver responsible affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. Investing in a CDFI certificates-of-deposit or promissory note may help refugees and immigrants build credit with low limit cards, financial literacy seminars and loans. In 2014, Grantmakers Concerned with Immigrants and Refugees published a guide of CDFIs referencing Dreamer, immigrant and refugee programs.

Other developing options are supporting public companies who make significant contributions to refugee welfare, including hiring, funding, and in-kind services. New and further developing are pay for success bonds and private investments in refugee entrepreneurs directly or through funds.

Despite the scale of the refugee challenge, we need to think of it first and foremost as a crisis of solidarity. Whether the world can come together to effectively support these vulnerable groups will be a true test of our collective conscience.

How Climate Change Caused PG&E’s Bankruptcy

Veris Guest Blog: By Timothy P. Dunn, CFA

Pacific Gas & Electric (PG&E) Corporation, California’s largest investor-owned utility, which serves roughly 5.2 million households in central and northern California, filed for bankruptcy and is facing an estimated $30 billion of potential liabilities stemming from its equipment’s role in the historic 2017 and 2018 wildfires.

PG&E’s bankruptcy is indicative of how our changing climate presents real economic and financial risks for companies and investors. Prior to the wildfires that burned over 240,000 acres, PG&E included warnings that weather-related disasters could weigh on or disrupt its operations in its regulatory filings. In a statement, the company noted that the state’s most recent climate assessment “found the average area burned statewide would increase 77 percent if greenhouse gas emissions continue to rise,” and that “prolonged drought and higher temperatures will triple the frequency of wildfires.” Further, PG&E performed extensive water risk assessments, water management was integrated into its business strategy, and the company spent hundreds of millions of dollars every year in fire prevention, including pruning or removing thousands of trees. This awareness and action, though necessary and important, was not enough.

In an environment that continues to be challenged by climate change, PG&E’s situation could be a harbinger of the economic toll of spatially-related climate risk. “California is now a riskier place to do business,” said the Environmental Defense Fund’s Michael Colvin, a former adviser to the California Public Utilities Commission. “This is a statewide problem.”

The bankruptcy not only points out the danger that warming poses for many companies, it also underscores how difficult it is for investors to analyze risks linked to climate change compared to conventional business challenges. It is becoming increasingly clear that economic damage from climate change will affect a variety of sectors, and even companies regarded as forward-thinking might not be able to directly prepare for all the externalities associated with this systemic global problem.

Veris Guest Blog
Source: Seeking Alpha

Terra Alpha first purchased PG&E in 2015 based on the fact that it was a leading US regulated power provider with solid fundamentals and a strong record of shifting to lower carbon power generation. Nearly 80% of the electricity that PG&E delivered in 2017 was a combination of renewable and GHG free. Accordingly, PG&E was well-positioned to benefit from increased regulatory action in California aimed at furthering the shift toward renewable energy.

We sold our shares of PG&E in mid-October of 2017, after PG&E’s equipment was linked to the start of several wildfires. We had determined that the risk profile for the stock had dramatically worsened and it was no longer prudent to own. We felt that its exposure to such enormous liability, coupled with CEO Geisha Williams’ concerns about the growing financial risk for PG&E from forest fires, intensified by a changing climate, and California’s unique inverse condemnation laws, represented material undiscounted financial risk.

While PG&E may represent the first climate change bankruptcy it likely won’t be the last. Investors need to learn how to account for long-tail climate risk in their portfolios.

Timothy P. Dunn, CFA, is Founder, Managing Member and Chief Investment Officer of Terra Alpha Investments, LLC, a global equities asset manager.

*The information presented by Mr. Dunn is not an endorsement of Terra Alpha Investments by Veris Wealth Partners.

What Will 2019 Bring For Investors

What Will 2019 Bring For Investors

By Jane Swan, Partner and Senior Wealth Manager

Stock markets finished 2018 with the worst quarter in more than seven years and the first year of negative returns in 10 years. All major global risk asset classes had negative returns. This includes stocks, REITs, and high yield bonds. Fixed income returns were positive, but very low with the multiple rate hikes in the year. Sectors of the S&P 500 were overwhelmingly negative with only small positive returns from Health Care, Utilities and Consumer Discretionary. Despite strong returns in the first half of the year, Energy was again the worst performing sector of both the quarter and the year.

What Will 2019 Bring For Investors
Against this tenuous investment picture, we enter the season of annual investment forecasts. This ritual continues, despite limitations to the accuracy of these forecasts. While market predictions can be relatively reliable during periods of relative stability, their limited reliability in advance of economic inflection points can lead to failure during times when forecasts are actually most important. Investment and economic forecasting rely on a number of data points that are interpreted to develop scenarios of possible futures.

Market analysts and investors review data, assess the speed and severity of changes in trends, evaluate the moving parts in concert, and put them in context of the economic cycle and known and predictable global events. Balancing the many inputs is a mix of art and science, as the collection of inputs and their placement in history is always unique. Current readings of indicators may be similar to points in a previous cycle, but are never an exact repeat of any prior events. We try to assess what has happened in the past when some things were similar, and how the subtle differences may lead to different outcomes.

Recent headlines have included, “Why The S&P 500 Will Fall Another 20% In 2019” from Seeking Alpha, “S&P 500 will climb 15% in 2019 – here’s what to buy now” from MarketWatch, and from Bloomberg, “Save the Date: June 10 Is When Charts Say the Stock Turmoil Will End.” The absurdity of specificity in these forecasts highlights a dilemma for investors. And while we can watch economic indicators for signals of vulnerability, there always exists an additional supply of uncertainties. Shifts in consumer sentiment, changes to the yield curve, and other indicators can give us signals of market strengths or weaknesses. Natural disasters and human interventions are less predictable, but can have a significant impact.

In our current situation, we have troves of data to evaluate numerous trends, while finding bigger questions seemingly impossible to answer. We have low unemployment, signaling a strong workforce. If the market downturn of the fourth quarter quickly recovers, we will still be in the longest market expansion in history. The yield curve is nearly flat, suggesting concern about future growth. Corporate earnings are expected to grow, but at a slower rate than last year. And yet all this data still paints an opaque picture of future markets.

Crosscurrents In the Markets
Weighing on the market is a growing list of uncertainties that constrain the ability of businesses to plan. Uncertainty around Brexit makes it difficult for businesses in Europe to plan for growth, evaluate the positioning of their workforce, and determine where their HQ should be located. It is the time of year when U.S. farmers are planning their 2019 crops, but they don’t know if tariffs will continue to reduce their markets. Further the government shutdown has limited data they use to finalize crop planting plans. The effects of tariffs and the partial government shutdown continue to trickle into ancillary businesses the longer they continue, airlines for instance. The resolutions of Brexit, tariffs with China, the government shutdown, and the eventual conclusion of the Mueller investigation may cause bursts of market volatility. However, greater certainty, and resolution, around these matters may lead to a market boost as businesses simply can plan better.

The current accumulation of uncertainties is unusual. In Barron’s annual Roundtable of Experts, most expect the pressures of these uncertainties to resolve in the first half of the year but believe they will constrain economic growth as we await the resolution. These experts expect GDP growth somewhere between 0.5 and 2.4 percent in the first half of the year and a return to growth higher than 3 percent in the second half of the year after these uncertainties are presumably sorted. We can at least partially attribute the market decline from last quarter of 2018 to these escalating dilemmas. So long as they mostly resolve in the first quarter and no major new matters are added, we very well could return to a strong position in the economy and the stock market. That said, a year ago, these current market stressors of a possible hard Brexit or re-vote on the referendum, a trade war, and government shutdown lasting over a month, were at best distant on the horizon. Markets were celebrating the success of tax reform that hoped to raise stocks while increasing wages and consumer spending. All with little concern over increases to deficits.

The Big Picture
As we look to the year ahead, we work to keep all of this in perspective. In addition, as impact investors we consider long term implications of all opportunities. We take note that while the federal government opens and shuts down, on many levels, cities and states march forward in combating climate change. They are innovating in green and sustainable cities and housing and technologies. We are seeing solutions-based leadership. There are nearly 50 new models of electric vehicles and batteries coming on the market. Total oil used for cars and trucks hit peak and is actually dropping in the U.S. Some states are making bold experiments in new ways to deliver community healthcare. And more of us are awakening to the crisis of inequality in our democracy. Spotlighted by 1 million federal workers on shutdown struggling to pay basic bills, while eight billionaires are highlighted this week having equal wealth to 50% of the people of our world.

Considering these matters, Veris’ determined focus on climate change factors, gender lens characteristics, community wealth building and social equality, sustainable agriculture and forestry, as well as mindfulness gives us practice at looking beyond the old-fashioned forecasts. Our broader approach positions us to work with our clients to better understand risks and opportunities beyond those reflected in the standard list of economic indicators.


1 Seeking Alpha, January 7, 2019 “Why The S&P 500 Will Fall Another 20% in 2019” by
2 MarketWatch, January 7, 2019, “Opinion: S&P 500 will climb 15% in 2019 – here’s what to buy now” by Michael Brush
3 Bloomberg Markets, January 23, 2019 “Save the Date: June 10 Is When Charts Say the Stock Turmoil Will End” by Elena Popina