the way each energy environment in a sustainable way of us in their DNA a new generation generation that is making this huge change and how we see investment and infecting the rest of humanity for the next generation so I am very excited to moderate this panel about investment I seem to adulthood in the nineties when Indians were known and therefore maybe one or two or before and I was in finance at that time I was operation but I always employment with that mental side is the International Finance Corporation for all time so all my collections phonology had to do with sustainability and with Empire and and development to those countries but I saw that my generation had I so how lead in my generation had with so much negative effects in humanity and I see with joy that a new generation today Grady's about self-love and beauty is about the love for others often up for what unity and to see that constant and Bennet investments is something very very refreshing it is for me a great pleasure to be here from their experiences I will start with British angels projects jameelah el-amin next to Bob is also a scientist because Jerry passionate for finding solutions to human problems a sustainable way jimena has a PhD from Yale in chemical engineering a master's from MIT chemical energy UCLA now by my team but copy both here in Houston which targets our wishes our pathways to be to get greenhouse gas to growth and to adapt society Victoria Nestor jameelah III Fernandez is a business woman and media expert she is the chief marketing market strategy for both of our global investment when she was in market she's the market experts and interviews everybody for the media she's been there since 2012 right Amanda here right next to me is the chief operations officer for global affairs associates it's a farm that else companies made strategic business appropriate decisions regarding sustainability before that actually worked right here in cementing my peers I'm cheap first question in the first half of 2017 which is issues and in 2019 delivered to the CEO of everything the German has to talk about purpose and prophets explaining that with unemployment improving across the globe and you've been on stakeholders expect the company they work for bespoke in society he said that over the past year we have seen some of the world's most field employees staged walkouts that this phenomenon will only grow as a convenience over by increasing these senior positions in business in a recent survey by Deloitte the workers were asked what the primary purpose of business should be and three percent more said improving society than say that those who said generation generating profit so however when it comes to impact investment yes Jesus ride or just angel perception it seems that it's alluring to defend in fact or have a good return on investment but you have to say about this and how this became this perception of change Victoria would you like to absolutely yes so it's interesting we actually did a survey pool about six seven months ago with investors of all age groups to determine their familiarity with whether it's ESG Fri investing values based investing whatever may be how much should they are in that their exposure to that it was very low for investors over the age of 60 but if Millennials were very much in tune with this the problem though is that many of them did think the same thing you're thinking if we're going to invest with our values which is kind of what our goal is our name is cross mark where we save because we're at the intersection of your boundaries and your investments they had to give up performance and that's actually how we started with socially responsible investing 20 years ago a client came doesn't said look we want to invest we know we're going to give up a lot of performance so we're an interlock will do for them show them the performance show that the tracking error right the difference between their portfolio and their benchmark and it was so small at first they thought we made a mistake they said that can't be there's no way to give up all these names and still perform well but it's the truth and that's not to say that from quarter to quarter there's not going to be swings right it's some of the names we actually screen out Amazon month because of the mature content and have their own video processing center and everywhere they make their own movies their own studio movies so they get screened out people hear that there but there's many quarters where that look performs it's the same thing with pharmaceuticals or it'll be the same thing with energy-related or urban related names that make it screened out so there are times when you may underperform because you drop something straight out you have just as much the same amount of time that you outperform because you're not holding certain names of the portfolio so that you look historically there really is no difference between having everything in the index all the stocks in the index house and going in and screening out certain sectors in the portfolio and about your values now saying that that doesn't mean you can go straight out 80% of the names and still expect to have the same there is there is a point of time where it starts to really increase that time mirror that dragon for performance but in general historically that's not the case and that was a misconception that we found almost 70% of investors had from a sales perspective and you know my work really focuses on financial sustainability and technology of a large class when investors feel that when we invest in any type of science there's huge technological risk but by and large a lot of the technologies that we're driving after now are proven out scientifically we're really working on ability engineering challenges engineering challenges are just how we work around whatever we need to do but scientifically the principles are sound as far as risk both there are so many more risks associated with finishing and fluctuating cost resiliency and how we can see cities municipalities companies being affected by kind of the climate extremes and other changes that we would think that it's a benefit to invest in sustainability and in technology that are driving towards improved efficiency or to increasing carbon or finding alternative by the way solutions those are the better bet at this point considering the direction that that we will go if you continue in check so they mention star just remind you how an angel network works you know soar like a friendly version of shark tank you don't try to embarrass the CEO's that have been my decision to get screwed from the national audience rather we have more ecology discussions you put the other investors and companies companies invested and the world of discretion so interesting for angel investing because you know the rule of thumb is an angel investing you need to invest in 20 startups to get your money back because you know 15 Hubble failed three or four will do it will serve okay give a big return I'll be playing but you know so the question really is in fact angel investing versus standard angel investing because it's recessionary to do the impact side yeah I've seen data that says it's not it probably depends on the individual decisions being made by the Angels but you know in our network we we certainly don't view it as a concessionary activity in our apartment person returns and we do expect to have similar concerns as other entrants you factor that that made it more difficult for the industry number one was just availability of good quality data if we take the S&P 500 just as a proxy last year 85 percent of companies actually publish a sustainability report if you look back in 2011 from that world go it was less than 20% so we just take that in an example there is so much more dad good quality doesn't have a port it's still not perfect we still it more about that later but at least we have more than we had 10 years ago at the same time that early pioneers just like any tiny industry you're struggling you're trying to figure out how do I make sense of this data how do I interpret that in a way to set some meaningful it's meaningful to two main goals I think the administration with that the Pioneers struggled with that really I think that's what that perception comes from but those two things have changed I think that's why we can look back now maybe five to seven years and applying this new lens or if you understand it with our new data that we have and look at how actually if you're applying these principles you can make more money you can't generate so you don't need to give up something some of these projects are destructive technology or innovation static nature if they please and I think maybe a lot of investors sometimes your science averse especially when it comes to technology based investing I think overall a lot of it a lot of the technological risks that we talk about isn't it of course there's always there's always things that can't be proven out but by and large a lot of course science has been established and that engineering challenge I mean this is in each hand challenges that we have overcome or the past there's no reason that we can't continue to do that and we do continue to do that so when these companies that come to us and you know that's not true things are possible you just have to kind of put them out and understand the scalability my customers are interested and in overcoming that perception of technological Vestas is full of risk you know companies fail that's risky so we've got a lot of energy before we invest trying to assess the risks can this company did it successfully and they get profitable because they can't get profitable and survive I can't do a thing either you know if I have the world's best solution that sophomore will talk about a business on a soccer goal so we look very carefully at the team and technology competitors the market size their go to market strategy how acquire customers in addition to all the questions about the efficacy of impact claims are they're really having impact as they claim I know there's a gun team that came to us and said ok we have some really cool tools for STEM education and labs and public schools we so they first saw some evidence that you could give better education outcomes than the other tools that are all making throw out of these schools secondly it convinces you know how to sell the schools which is really hard because if you you're not impressed but what you want to do to price it properly you want to understand what it is to provide sit properly so what companies get to do is provide that material information so that investors like the ones in your network properly understand how risky this is what kind of return do by one or that it's something that risk and when I say material information you know what is that you can look at it from two perspectives there's one perspective which is financially material the FCC the security Exchange Commission's would say that stressful for that is what a reasonable investor would find this information important when they're deciding whether to apply online so we can look at that that's a funny answer get your that you'll want to provide on the other hand you also want to look at what is the SG material that's what we call it in our company basically environmental social and governance material what are those key topics that your stakeholders are interested in your stakeholders are of course your investors very important but it also could be who are your clients potential clients suppliers your community members maybe regulators if you're your workforce your potential employees your current employees so you also want to understand whatever this key environmental social government sort of indistinct with them I think if you present that whole package I think that will help clarify make more transparent investors and shoes their investment bad news exclaiming now because that also helped one of the things that we really pride ourselves on is we may not have personal views or personal stances on certain issues but it's not it's not our job than our views on the clients that come to us so we sit down we decide what are the values that are important to them and they can choose we have a list of probably 25 or so different screens that we do on and indexed set of like S&P 500's and was saying if someone comes and says okay we don't want tobacco or we don't like gambling stocks or whatever it may be pull or in and start we and have a process that we go through we have services that provide us with information that rates all these companies all these three variables the main the reference and environmental it breaks them on all of those and we take those companies we find kind of the worst offenders that are involved in those that we screen those out we also do revenue thresholds so if tobacco happens to be a screen that someone wants to have on there we have a revenue fresh world where a certain percentage of that company's revenues are generated from tobacco so that could be why I write dependence right people think new tobacco and they go okay that's just fill it more in this sir you know all three or something like that but it's really not I'm Walmart is involved in their restaurants if they sell cigars you know that's their you know to look at shipping companies who are their clients and how much of their revenue comes from shipping these products so there's a huge I guess deep dive that goes in to to finding out what names fit each screen and then we screen those names out that's a little different than impact investing where you're looking at companies that are doing something positively towards something we do a lot of our focus on the negative screening component taking out companies that are said that one of the important things I just wanted to add more because when you're looking at risk it's a little bit different at I was looking at risk on startups we're looking at established companies that are in some of the major indices the government's components that companies get rated on we have found not just us but across the board in the industry if the company ranks really high on governance the risk is much less regardless if you're looking for someone that has you know mature content screen or anniversary screen or whatever it may be if they have good governance your risk of your total portfolio going to come down so that's a really key component for us when we're looking at risk good governance and governance that can react quickly to the changes in the market which is now the characteristic of that market so much rabbit change and having governance that can react and adapt and quickly absolutely supporting but going back to the first notes that I made investors are looking to nominate member support that had started on sustainability we are going to mention one of the questions this is incredible to see Tom investors are requesting that are changing and I thought so much focus on profit profit is now a small percentage 30% of all the other teachers that they have reports maybe anyone also what changes there is a myriad of indicators entry box and impacts baggies simplified also there is an exponential the Dyson environmental social governance rating agencies of ESG agent rating agencies may report base butchers to the third-party information and that is because this reporting goes beyond what the the Omegas for all this age these guys measured the data thank you so in your experience but they got it's useful to measure and report to investors in order to make revisions and how is best information to that I'm not that efficient communication is a blood serum welcome back to my last answer is financially and ESD material information that's what she would ideally want to start off but those are the most important things to your investors to your stakeholders howdy your prevent one of these frameworks are answer renting surveys and this is one of the two key questions we actually help our clients answer all the time when we come up with a reporting strategy for them and how we work through that is the first step the first steps would be what is your vision for this current increasing transparency for this disclosure what are your long-term strategic goals where do you want to be above your peers what where you want to begin and also understand as well and so once you have that foundation that's what you can really start building out what we call framework for decision making about which surveys to answer but frameworks use many the thing about being the us everything is voluntary right now so you actually have this huge birthday to choose from and say we don't have this framework for decision making you might make the wrong choice and have some how do you establish this for kind of the framework that guides you along not just this year who made five to seven years down the road I think those are the right things to think about we never promote a specific framework or a specific survey there are ones that are tailored towards different audiences that we really like to start what do you want after company what is your vision what is your goals and how invest communicate that out to your investors and other stakeholders commend us company performance that is for somebody to support my establishment municipality and all right so so you know these companies often for maybe two or three or four or five employees total and many of them don't do that kind of revenue to speak of a just a little bit of revenue so you know it's kind of go to the trouble to do the SU report on those companies that's just like that could happen so you know what we look for first is what is their primary business mission is it economic and we have that companies companies that say weight of this week recruiting tool that companies could use of recruit employees and can be used recruit diverse employee which is a packable we say well that's not your primary business vision of immediate impact so not a good fit for us but you know we in terms of here we see environmental companies that max is usually kind of RAD co2 footprint conservation on the social impact side you know it's really the question of the first kind of questions are if they were primary impact mission how many people are you affecting impacting how significant is the impact for each individual you know solving cancer for three people in the country with a ten billion dollar drug is small impact in some sense it's great for those two people doing a little bit for everybody is stuffing Sabich rolling or everyone it's a huge impact right so and there's also the question of what are the unintended consequences of your mission you know top shoes have this great reputation of variety shoes to people in the third twelve countries when you buy a pair of shoes in the u.s. well the stories I've heard is they put a lot of effort shoe makers have business it so there can be unintended consequences to on the backside that are important to consider and so yeah we asked the companies we we don't you see companies John they work in the area of health care education environment participants groups we don't have a tight screen of what we looked at look for companies we ask them to Genesis are doing impact and define metrics they could use to describe impact but sometimes it's very hard to do because if you're helping the mental development students in high school what he mentioned the vision of our students you graduated you measure the improve zo2 up and water concern but the interconnectedness of all of these sectors whether it's water energy and food waste chemicals if they provide additional wind that we don't always leave additional wings and additional opportunities to create negative impacts we can't you know get winds in one sector by sacrificing other sectors a positive maybe direction would be taken agriculture company that had a new farming practice and they allow for resource efficiency you can get the same meal or better yields with less water or less fertilizer but not only are you satisfying this increase yield with resources but you're also improving water and energy communicating multiple sectors at the same time if you look at where announced that their surveys water treatment plant there's energies with you that so you kind of have to drive your cell students in supply chain because those winds along the supply chain are not simple and it really it's important to quantify because you can also kind of help you isolate areas where maybe you've sacrificed a lot of times this kind of interconnectedness between water and energy isn't very clear but you know we could say oh we use so much less water but we require at the mountains we have more energy or the parking is for example where we have seen this trade-off and understanding those connection is really important to those investors and remembering that we can't look at anything inside nothing is by itself especially in this world and social good is it look great example where it connects into the environment particularly as it relates to climate change those communities that are most going to be impacted by the changing climate are underserved in general information and so how we can satisfy those goals here where the connectedness energy water or water energy is a lot more widely known I'm especially here in Houston but I think you know if it's not only clear that we connect to a wider Nexus that includes all mission co2 you know we hear about cnc by itself co2 doesn't induce along you know that's directly connected to human health we used to be oh to be quite honest but we're talking about all sorts of greenhouse gases that those are directly impacted to human health and so yes then oh yes we investors are familiar with ten in the first class of water and energy and maybe how that's impacting already but there's it's much wider than that I think the Social Development Goals kind of really Drive that Internet to know that you can see the connections between all these sectors very clear without energy water and you can't meaning anything that makes us to invest in June and Victoria what kind of data viewer investors need division initiatives when so for us the ability managers when we're looking at what to put in the portfolio when there's certain strengths that are going to be placed on as Nathan was mentioning it's voluntary here in the US and so it's quite difficult going into every company in the wrestle you know 3000 index and try to figure out the scores so we do have third parties that provide us with ranking information on companies depending on whether its environmental social or governance and they break those for us we then also do our own research into these companies as well because you just can't get everything from from one source FSC is the source that we use ESRB an elastic with acronyms and form be able to tell you but so you have many different sources but we know it's difficult even Bloomberg I'm sure almost everyone is familiar with Flickr they've reached out to us because there's might figure out how can they start a program to look at companies to rank them on these EST or SSRI variants and they're having trouble doing it and they kind of look at how how much okay so there's a lot that goes into it just really quickly I will say years ago one of our every when we started we have a family funds the Stuart funds that all have associate responsible screens on them and we would call from suitable companies and say someone into a research department and ask the question and you could talk to someone in the lab and they would just tell you what they do I mean now you can't even get past the front desk cause the money there's just no possible way to be able to get that kind of granular information anywhere on your own so it is voluntary which I think and I correct that Europe has a lot more rules regulations in place right and I would assume at some point people start inking our way to work that I'm not sure companies will feel about that coming up a few moments and I do that lots of different sources coming together to try to make a bigger picture yes but what we're thinking about measurement and anticipating having future impact results you can measure you know there's a lot of metrics used look at a business how competitive they will be long term what's their efficiency I've had customers well if in the impact space there's often many people trying to solve the same impact problem startups and so we have other know the question is for this tech company versus I saw the same problem who has better sales efficiency who has a longer term content of the damage somehow because the one that's this better dare to start a business question sounding will have longer impact and impacted a niche in the world and so the future measurements will look a lot better for those who have competitive advantages today most popular themes and the mental energy to start with you touch on that Nexus with water use the other things I think you know when we use the term climate change to turn the lock to lock it up into paradise but it doesn't have to be so you know we're really talking about sustainable investment not just from a climate change perspective but really you know in essence I was going to testify and what are the problems that we're going to face whether or not you've been climate changes initiate the growing population for example is a major one and you know the food requirements in the next several decades so how do we satisfy and those needs well balancing whatever we saw recently and I've seen a lot of activity around agricultural emissions whatever you might call it increasing those yields whether they're domestic applications order or international acquisition I think that certainly energy weather renewable or improve in food very active water is always challenging and I think as we get behind this interconnectedness of as I mentioned energy and water the importance of water and our freshwater resources are becoming far more important there's a direct link with water and sanitation it's also one of those sustainable development goals internationally people don't have access to clean water because they don't have access to clean sanitation and you know it's directly affected for childhood or biddat mortality so how do we kind of satisfy all of these kind of goals of this because it's not technology they get behind it but again water is uniquely challenging sector domestically and because it's a it's a necessity for human life but it's also a commodity so I I still do think climate change is the primary concern but it is the sustainability but I'm trying to changing these adjustment it's much more than just education because whenever there is a changing climate in the boys so dependent on the investments and across and bracing their food that when he changes their environment they have to integrate and start their life somewhere else or sanitation so haven't changed it in the certain way and price however there are other address what trend what is the trending terms investors so unity that's a great question and I have a good answer suppose but I mean you know when testing the keynote speech I was just kind of impressed by how people think about these global trade you know where the global changes to this what are the big sectors where the technology changes you know they see how versatile they are our age number we don't think that globally you're kind of safe Hayes's company gonna make it let's go investment oh yeah so that's a little more of how we think we have been little hesitant to invest in companies which are located overseas we understand the laws and present issues we are looking closely right now at a company that is working to improve power reliability in Nigeria as a US company two-degree good chance to be present – that's that's kind of our part of international authority so far I think we'll see from our our Institute ESP investing going back to the ISS report I think what we'll continue to see is focus on two areas in addition to but you in addition to climate change the beach and their diversity and then a little activity specifically in regards to membership and I'm gender diversity because we see who's been devastated that that creates output across all sectors is the matter what industry you're in so they're the innocent icing on the board the executive management and the workforce 300 diversity I think the second thing is any political activity specifically membership in trade or industry associations investors have God's mark that same group of pukey companies can actually impact entire industry and we can take a recent example from the oil and gas industry where shareholders through Derrick engagement with Royal Dutch Shell was able to basically influence huge organizations like the American Petroleum Institute eighty nine which is the banging lobbying industry association before us and so through these kind of key companies with which I seek to the table these associations they figured out that they can actually impact much more I think those are two things we'll see in addition of course of climate change I think Oh we're seeing is that the companies were saying okay I understand your concern about climate change we're taking these actions all along at the same time they're giving money to this association in lobbies lobbyists to Congress to the regulators and trying to get and successfully loving or lower more relaxed regulation so it's the city sure so when we and when we scan and guess there's general across all eight graders the top three concerns that we have from our investors one actually kind of surprises we thought carnitine could have been first actually was that they came in third along with being carbon neutral first was healthy living they wanted to screen out companies that we're working against that goal and we actually put a lot of that comes from the fact that headlines right now are all about how we get funds with the entitlement programs that we have in the country right whether it's Social Security or Medicare or Medicaid it's like you people are becoming more and we're concerned they want to support companies that are working towards helping people live healthier lives so healthy living is number one second was fake face values we have a large amount of clients on the institutional side of our business we have that are religious soul of Catholic and down that's that are with us we have some from all over it mine too of faith and that's very important we actually spoke the other day I was telling where that the bishops letter kind of drives havock institutions that come to us for investments but it's interesting to us how each one interprets it a little bit differently so whereas one group may want to screen something in particular and then say well yes but you know let's do a ship to be something a little bit different so it's very citric to the individual investor as to what we're looking for on the values on the value size but those are the three things that are most highly asked for healthy living they face values and then carbon neutral or climate change we're going to audience questions we'll start with that and get new questions one of those ones changing for the younger generation so I think what the question is asking when is talking about virtual vestments I'm assuming maybe Robo advisors so you can go online put in your information and voila you have this perfect portfolio for you you lose so much of the interaction with someone when you do that and the interaction is really important when you're talking about this type of request meet a values-based investment and srid TSP investment so much that comes down to behavioral finance it is a whole world of its own now on behavioral investing of behavioral finance that is really developed in the last 10-15 years where you really have to sit down and find out what people's goals are and what's important to them it is not always making the most money it is most important even though we talk about in every column our companies have been profitable but as an investor sometimes that's not the number one goal you need to meet your needs but there's also this whole values component that goes along with that you miss that when you do something with a robo-advisor and in our study we actually found that almost 70% of investor and they still want to talk to people in person about these types of investment decisions that they're making so if you lose a component on it it doesn't work for some people but I think if you have more more factors in your decision-making and just do I want to be in stocks or bonds then it helps to have an individual to discuss that way so another thing that's happened is in goodness enter private company companies required to have a certain amount of personal wealth because then you're important enough to make a decision then take the risks but the job back to a few years ago allows not accredited lawyer you come and investors to make small investments in private companies like startups so that's a new development to call out líneas to start investing in some startup companies there in the new tax base there's also some new ir8 companies like rocket Dollard allow you to direct your IRA part of your portfolio to start new development also because lineal is a chance to you know go on to specific companies to make more effective and mainstream and initiatives well you know that there's companies that you think are you know we're going to be as cheap a considerations you know identify the puppies that have good est stores buy their products we've got buy the products of those who are and if you're doing public investments probably guess geez and you maybe did follow some of the shareholder motions Boeing prisms that's the way that anyone companies with your purchasing dollars with your with your shares if you are a shareholder make your voting your shares and and Khomeini on top of that also engaged email then call them post feet whatever you're you know form of communication is when they want to care for you why are you voting this way why are you making your person usage in this way and then if you're if at your own company I would say to two things of one why not start or support an initiative the pilot biker company and then number two if your company does offer a 401k do you have a TSG investment option it's gone in the recently heard you know that 85 percent of public companies now have someone on staff you know and that is unfortunate and and honest and this damage unacceptable so we can need to make that change and not only that informing folks educating yourselves on you know what you can put in the recycle even you know if kids in Europe no matter that we need to do it piece of advice you cannot put a piece of us exactly when you want something today you know but there are many such things you know you can't put plastic bags at recycling bin I've seen I've heard entire box recycling get rejected because the amount of contaminants there were were too high suspects may be related number one thing we've been to a recycling plant it's actual manual labour separating these pieces if you don't know what to do with it trash recycle so eating lead in community and recycling is just one such a suggestion but engaging with your community water water saving practices irrigating your lawn I would order as we get the email every week telling us whether we should irrigate or not this is just a small kind of bit but these can have a much bigger impact if we all did something women to Mexican say from an investor perspective this I think the answer from my end takes us all the way back to the very first question you asked and it comes down to education we strike so hard to educate our investors you know he talks about how they don't realize that you don't have to give up to four minutes to make it in fact with your portfolio they don't understand that these investments are even available to them so we work with advisers we work with clients to really try to educate them go out and do it yourself I mean you know our website if you want you go to any website and you know what you do a Google search and find out what's out there because if your dollars do speak volumes and so whether it's finding a product or whether it's investing in a company that education is key for people what is the world of uncertainty and risk that are interconnected I could say yes there's a tremendous amount of uncertainty in global risk and where I get energy from over I suggest a smart interesting perspective to explore is really what are the solutions so get to it everyone because there are Illinois and so I think focus on at the current rate of adoption we're not making an improving life so we need to see those go much further for us our global climate change models – and notice that and so yes they do account for that but I don't think the adoption across the board also advertisement yes so angel investing is mission all the risks involved but as long as you can out there small portion of your assets pass that class and some fun thing to do it's a social thing to do because you're part of the team that's waiting and all these companies together and we are focused on impact