May Newsletter - Good Capital Project
Good Capital Project (GCP) is a collaboration to drive more capital towards purpose - driven investments. Following its launch in June 2017, Good Capital Project deployed a design thinking methodology to identify the persistent challenges facing the impact industry and to develop potential solutions.
GCP is now in the prototype stage. We are developing – in partnership and collaboration with other stakeholders – prototypes of initiatives to address some of the challenges that surfaced during the discovery phase.
Good Capital Project Initiatives
Total Impact Portfolio Challenge: Our newest initiative
Good Capital Project, in collaboration with the Wharton Social Impact Initiative (WSII), is launching the Total Impact Portfolio Challenge - a competition to provide hands-on opportunity for graduate and undergraduate students to build 100% impact investment portfolios by integrating social and environmental impact across asset classes.
The Challenge will be officially declared open at SOCAP18. Stay tuned for more details.
Total Impact Conference
Total Impact Conference is Good Capital Project’s first initiative. Total Impact is a multi-city convening series providing practical impact education and impact strategies to advisors, investors, family offices, wealth managers, and HNW individuals interested in aligning their investments to their values and mission.
The inaugural Total Impact was hosted in Philadelphia in April. Over 300 practitioners, thought leaders, advisors, and investors discussed the current landscape and the evolving trends of social impact investing. Thank you to all our sponsors, partners, speakers, and attendees who made Total Impact Philadelphia possible!
At Total Impact Philadelphia, in addition to focusing on investment strategies and tools to integrate impact across asset classes, we partnered with ImpactPHL to convene key Philadelphia stakeholders to highlight place-based opportunities and impact success stories of the greater Philadelphia region. The vibrant Philadelphia impact story needed to be shared with a wider audience and we are honored to have played our part in weaving together that narrative.
Total Impact travels to Boston in October. Across cities, Total Impact will partner with leading local stakeholders and networks to curate discussions around local impact and blended finance investments that are positively affecting communities, creating livelihoods, and reducing inequality.
For those of you who missed Total Impact Philadelphia, we have compiled some highlights from the two days of knowledge sharing.
What we heard from Sister Mary Scullion, Co-Founder and President, Project H.O.M.E.
“Real and total impact is about developing leadership and potential in people. Investments ultimately have to pay off for the men and women that we serve.”
“We have to have more just and inclusive public policies, and we have to have just and inclusive economic policies. None of us can do it alone—it truly is the power of we, and it depends on how we all invest our money to further a more inclusive society and a more inclusive economy.”
What we heard at the panel "Making an Impact Through Fixed Income"
“We’ve established key performance indicators and metrics that we follow and track over time to determine the efficacy of [each] underlying investment. Internally, we assign both a fundamental rating and an impact rating to every entity we look at. And so not only are we trying to optimize return, but now we’re looking at optimizing the weighted average impact score for each portfolio and reporting that directly to our clients.” - Eric Glass, Portfolio Manager, Fixed Income Impact Strategies, AllianceBernstein
“We believe in order to get buy in from clients, you have to report regularly on what your ESG value sets are. We do that, every month every client gets what the values are, and on our portfolios we map to the ESGs in every single statement and every single line item. As risk managers, most importantly we’re going to tell you how ESG is active in your portfolio day in and day out.” - Bob Smith, President & CIO, Sage Advisory
“We’re going to talk about what we do and how we do it, because we want to compel you to understand why this is so important and also such a great investment opportunity for your clients. Risk isn’t always where we think it is. Besides generating benefits for society, we also know that this type of investing is also a better risk mitigation strategy.” - Joan Trant, Managing Partner, TriLinc Global
What we heard at the panel "Impact in Real Estate"
“We want to be a lot of firsts. I believe that when you go first into the market, you have the biggest opportunity to make impact...If we’re not thinking about community and what makes it work, then we are failing.” - Brian Murray, Principal and Founder, SHIFT Capital
“Investors and their families are saying that they want to do good and be involved in impact investments, but the challenge is getting bogged down in the analysis. We have analysis paralysis.The seed is being planted here and Philadelphia is in a unique situation to be the leader.” - Anthony Miles, Founder & Fund Manager, TPP Capital Management Group
“New market tax credits allow for the infusion of equity into a project…you always need some kind of public assistance to close the gap and meet the middle-market demand. We need to make money, and our investors need to make money and try to reduce their risks.” - Leslie Smallwood-Lewis, Co-Owner, Mosaic Development Partners
What we heard at the panel "Are Impact Managers the New Activist Managers"
"ESG factors aren’t just socially material, they are financially material. ESG metrics impact the revenue trajectory, cost structure, and the risk of companies. You can’t analyze a company and decide if you want to own it or not, unless you’re doing all of those things.”
“The UN SDGs give an ideal foundation to use as an investment strategy. We had 193 countries around the world set an agenda. It tells you something about the future of government policies, it tells you something about risk. So to be aligned with that agenda is certainly putting you in a better risk position...The UN will tell you that to achieve them requires 90 trillion dollars in capital over the next 50 years. Most of that is going to come from the private sector, so there is a massive growth opportunity to invest in companies that align with the SDGs. I love using that framework and talking about that framework. This is not a tradeoff or something that we lose because we decide to invest responsibly, it is an advantage. For the life of me, I cannot figure out why more people aren’t doing it.” - Daniel Roarty, Chief Investment Officer, Thematic and Sustainable Equities, AllianceBernstein
“There are plenty of efforts that we have beyond our portfolio that are about managing systematic risks, and trying to look at specific ways in which we think we can try to influence company behavior. But there is not a way of quantifying how much of our success is E vs S vs G. If I answered that question with anything other than ‘I don’t know,’ then I would be lying. So there isn’t an easy way to separate out characteristics of what drives performance, but there certainly is plenty of evidence that integrating ESG factors over time is adding to performance.” - Matt Patsky, CEO, Trillium Asset Management
From our Partners
Total Impact Philadelphia was proud to host the launch of the PhilaImpact Fund. Click here to learn about this innovative investment solution, jointly developed by The Philadelphia Foundation and Reinvestment Fund.