Solution Series: Socially Responsible Investing
Socially responsible investing (SRI) targets the world’s most pressing challenges—scarce resources, climate change, poverty, human rights, diversity, and economic inequality. An astonishing $12 trillion--more than one out of every four dollars under management in the U.S. — is invested based on SRI strategies.
What is the responsibility of business? What motivates socially responsible investors? How is impact measured? A distinguished panel of experts addressed these and other key questions in a spirited and highly informative discussion at The Fedcap Group’s spring Solution Series on March 26th at The Westin New York Grand Central. The panel included:
• Christina L Alfandary, Managing Director ESG and Sustainable Investments, GAMCO Investors, Inc.
• Robert Brown, Senior Partner and Founder-Atlas Impact Partners
• Martin Whittaker, CEO, JUST Capital
A full house of business partners, supporters, board members and representatives of foundations, academia and NYC agencies attended the event.
Robert Brown provided an interesting history of SRI and a hopeful vision for its future, which will likely see more companies embracing impact investing principles as a core value and more rigorous frameworks for measuring impact. “Establishing and focusing on a set of SRI criteria is good for business and should just be part of what a company does. I would like to see more companies set and implement standards that reflect their values and move beyond aspirational statements to actual implementation,” he said.
Christina Alfandary, the author of a seminal paper about ESG, said that millennials are driving interest in impact investing because they see ESG issues as their own — if they don’t address challenges such as climate change it could be too late by the time their generation is in charge of government policy. More companies are recognizing that they need to be part of the solution, to embrace long-term thinking and a bottom line that includes both profits and impact.
"Social impact investing still has a long way to go to truly make a difference. What is needed is more cross-collaboration between the public and private sectors. Leveraging private capital markets is imperative to address these issues,” she said.
A fundamental question is how we define the social contract between markets and the society they serve. Martin Whittaker said that the vision articulated by economist Milton Friedman -- that the only social responsibility of business was to increase its profits – doesn’t serve the needs of communities and is not good business. A growing number of companies recognize the vital role they can play in addressing society’s challenges and are the United Nations Sustainable Development Goals into their culture.
“I am optimistic. There is a growing number of investors demanding impact information, sustainability criteria, and the trends suggest we are moving in the right direction.”