SGI 2019 Conference Will Make An Impact!

As fall begins to make an appearance, we start looking to the weeks and months ahead. While not everyone likes to leave the summer behind, fall brings the excitement of cool air, crisp leaves, spices wafting through the air, and the annual SGI conference, this year on Impact Investing: Social Return on Investment on October 7th.  This transition from summer into fall is the perfect time to evaluate the different impacts our institutions and we personally have on relationships, community, and society. How do we nurture what needs caring for? How do we help ourselves and others continue to grow and thrive? And, can our financial investments reap the same benefits while including this sense of intentionality?

We’re excited about the opportunity to listen to our keynote speaker, Seamus Finn, Missionary Oblate’s Director of Justice, Peace & Integrity of Creation and ICCR Board Chair, and our expert panelists, who I’m sure will bring their opinion on the change of seasons, but more importantly will share their unique experiences and stories on impact investing.

The Global Impact Investing Network (GIIN) defines Impact Investing as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” Imagine a world where our investments have an impact outside of solely generating a profit, creating positive change. Amit Bouri of GIIN, in an article geared toward faith based investors, explains:

Simply put, impact investing is investing to achieve both a financial return and positive, measurable social or environmental impact. It differs both from traditional philanthropy, which aims for impact but is unconcerned with financial returns, and from other forms of values-driven investment which aim at the avoidance of harm, but not necessarily the creation of additional, measurable positive benefits.

GIIN’s 2019 survey found that the impact investing industry is diverse, including many types of institutions investing in all asset classes. It continues to grow and mature with over $500 billion invested assets. Over 90% of impact investors report that returns meet or exceed their expectations. GIIN’s Impact Investing Guide provides an excellent background for our members.

We’re lucky to be welcoming George Hinton, Greg Lane, Salli Martyniak, and Ken Vander Weele to the panel, alongside moderator, Sr. Dorothy Pagosa to help us explore this topic. Our speakers and panelists will walk us through the purpose and focus of impact investing and all that it can hold. We’ll learn about their mission, motivations, takeaways, and advice in the growing market.

Born and raised in Milwaukee, George Hinton, CEO of the Social Development Commission (SDC) coordinates programs for Milwaukee County’s low-income residents. The SDC’s mission is to “empower people with the resources to move beyond poverty,” which they have been doing since 1963. Greg Lane, CFO of the Missionary Sisters of the Sacred Heart, helps the sisters utilize their resources for the benefit of the common good. He has helped developed a mission-aligned impact investment portfolio and repurpose real estate according to need. Salli Martyniak, president of Forward Community Investments support “organizations, initiatives, and coalitions throughout Wisconsin.” They make it a priority to offer their loans and grants at an affordable cost to assist both the small and mid-sized projects and organizations. Co-founder and partner in Creation Investments Capital Management, Ken Vander Weele, will show us the global side of impact investing. Ken has worked in India, South-east Asia, Eastern Europe, and the United States investing in emerging market financial services companies that serve poor clients. His local and global work will show us the social return of impact investing around the planet. Finally, Sr. Dorothy Pagosa, Director for Social Justice for the Sisters of St. Joseph – Third Order of St. Francis and a member of SGI, will moderate the panel. Sr. Dorothy has first hand experience in identifying and managing impact investments in the midwest.

The event will be preceded by a member meeting and followed by a reception. We hope all of our members and friends will attend what is shaping up to be a very exciting conference.

MCRI merges with SGI Coalition for Responsible Investing

By Barbara Jennings, CSJ

After two years of discussion about the best path forward, the St. Louis-based Midwest Coalition for Responsible Investment (MCRI) merged with Milwaukee-based Seventh Generation Interfaith (SGI) coalition to make both organizations stronger. 

MCRI began in 1977 focusing on the issue of the day:  South African apartheid. Michael Crosby, OFM Cap, the founder of SGI, visited St. Louis to explain the process of shareholder engagement and encouraged the formation of a regional socially responsible investment coalition.  Several Catholic institutions in the area decided to form MCRI. Other connections between St. Louis and Milwaukee:  beer towns, Midwest agriculture, defense industry, and racial disparity. 

MCRI joined the Interfaith Center for Corporate Responsibility shortly after it was formed. This connected us to many Catholic religious’ women and men congregations, as well as to representatives of other faith traditions.  We expanded our tactics beyond the traditional “negative screens” (e.g. no weapons, tobacco, gambling, birth control) to include corporate engagements, proxy voting and shareholder meeting attendance.

MCRI’s first resolution in 1978 asked McDonnell Douglas to build up its commercial business over military contracts which were dependent on foreign policy and regional conflicts. The proposal was presented by Sr. Mary Ann McGivern, SL. From that auspicious beginning, the work of MCRI expanded. By 1980, MCRI had thirteen institutional members. That same year, the coalition sponsored a local conference entitled “Corporate Responsibility: Why the Churches Must Be Involved.”  It was well attended by both treasurers and social justice representatives.       

Under the leadership of Susan Jordan, SSND, MCRI’s issues expanded to include nuclear waste (Union Electric, now Ameren), foreign military sales (General Dynamics, McDonnell Douglas/Boeing), and agricultural pesticides and GMO’s (Monsanto, now Bayer).  Other issues on which we engaged companies on were infant formula in Central America, AIDS medication from the pharmaceutical industry, and labor slavery in various supply chains.   

By 2007, Barbara Jennings, CSJ, who had been on MCRI’s Advisory Committee in the 1990’s, became the Executive Director of MCRI.  The issues at ICCR had grown tremendously, almost too much so that the saying at ICCR meetings was “We never met an issue we didn’t like.”  In 2015, ICCR adopted a human rights lens to all its’ work. Priority issues included climate change, human trafficking / labor rights, water stewardship and food justice.

MCRI continued to work with Ameren concerning their disposal of coal ash. A 2018 resolution received 53% vote, a rare majority for a shareholder resolution!  The coalition worked with Monsanto for several years on water issues. The company now uses low drip and recycling of water in their labs after a 2010 successful withdrawal of a resolution. After many years of engagement with Boeing, the company hired a third party auditor to delve into their supply chain for labor infringements.     

So, the work will go on….and with a more supportive business atmosphere than in 1977.   What has changed?   A greater awareness of the risks posed by climate change? Recognition of the liability posed by pollution?  Understanding that companies can outsource manufacturing but not the responsibility associated with it? The internet and social media together with increased societal expectations has placed more responsibility on corporations to account for their environmental and social impacts.

Each of the nine MCRI members (SSND, GSPMNA, CSJ, CPPS, OSU, SJ, SM, CSJ Congregational Center, and JAG Capital Management) will continue in corporate engagements as part of SGI’s coalition. I ask that you please stay active to bring the faith-based investor voice to corporate board rooms.

As for me, I have joined the SGI Board of Directors and will continue to remain active in this work. I was proud to be part of this journey and thank you for your support. 

A hearty welcome to Riverwater Partners

As you likely know, last year, SGI added 5 new members, and we are grateful for the efforts of our members, in particular Mark Peters (an SGI board member, chair of our development committee, and director of Justice, Peace and Reconciliation for the Priests of the Sacred Heart), to encourage more organizations to join SGI and to make us genuinely an interfaith organization. We’d like to introduce our newest member, Riverwater Partners, to the broader SGI family.

Our members may have learned a bit about Riverwater Partners from a recent article from the Milwaukee Journal-Sentinel:
Wisconsin’s B Corporations want to be a force for good, not just profit.

Additionally, they describe their work in the following way:

Riverwater Partners, an employee-owned registered investment advisor, believes it is in the best interest of our clients, our firm, our communities, and our world to consider the Environmental, Social, and Governance (ESG) policies and practices of the firms in which we invest our clients’ assets, as we do at Riverwater Partners. Therefore, we evaluate potential investment candidates on the basis of their ESG efforts, alongside their more traditional investment characteristics of Superior Business, Exceptional Management, and Reasonable Valuation.

Riverwater Partners uses a Three Pillar Approach to evaluate the ESG efforts of companies being considered for inclusion in client portfolios:

Research

Riverwater Partners analysts and portfolio managers research the ESG efforts of companies, gathering information provided in sustainability reports, financial statements, corporate disclosures, and press releases. In addition, we inquire about ESG efforts when we speak with management directly.

Engagement

Riverwater Partners engages company Executives and Boards regarding their ESG efforts, or lack thereof, in order to assist them in understanding the benefits of, and in initiating and/or improving their ESG efforts. It is our goal to promote greater impact over time with respect to improved corporate governance, fair treatment of all stakeholders, enhanced environmental impact, and ultimately, superior financial outcomes and real economy benefits.

Collaboration

Riverwater Partners collaborates with organizations that promote ESG efforts to inform our practice. Riverwater is a member of US SIF, CDP Worldwide, Seventh Generation Interfaith Coalition for Responsible Investment, and is a signatory of United Nations PRI. In addition, Riverwater is a Certified B Corp. Membership in these organizations provides us with thought leadership on best practices, current trends, impact, etc., which enables us to focus our ESG lens effectively.

Many believe one must sacrifice financial gain to achieve real economy gain; however, history has shown that companies that incorporate ESG policies and practices into running their business have generally outperformed companies that do not. The fact is that these practices often result in meaningful financial gain in the form of increased revenue (as customers want to support the efforts) and/or decreased expenses (as a result of lower energy consumption, for example) or potential liability. Our commitment to investing in companies that consider impact on all stakeholders will likely generate superior investment returns for our clients and will surely lead to a better world.

Again, we offer a hearty welcome to Riverwater Partners and look forward to their collaboration with us in the work of building a more just and sustainable world.

“Change is inevitable, growth is optional”

By Frank Sherman

December is a time of hope……a time to reflect on the past and dream of the future.

As I look back on 2018, I think of Nobel Peace Prize winners Nadia Murad, 25, who became the voice and face of women who survived sexual violence by the Islamic State, and Dr. Denis Mukwege, 63, the Congolese gynecological surgeon has treated thousands of women in a country once called the rape capital of the world. I think of Time magazine Persons of the Year, “The Guardians” – a group of journalists who have been targeted for their work. I think of CNN’s Hero of the Year, Dr. Ricardo Pun-Chong, a physician who provides rooms for poor families who bring their children from the countryside for life saving surgery in Lima, Peru. These are ordinary people doing extraordinary things. 

What about our members of Seventh Generation Interfaith? Are they making a difference?

This year SGI members worked with Midwestern electric utility companies to develop long term climate change scenarios and set ambitious greenhouse gas emission reduction targets. We promoted transparency in corporate political spending and lobbying. We challenged pharmaceutical companies to base their executive remuneration policies on innovation and patient outcomes rather than predatory pricing. We helped companies eliminate deforestation and reduce water pollution in their supply chain. We asked food brands and restaurants to improve their nutritional profile and follow marketing-to-children guidelines to fight obesity. We advocated for human rights policies and ethical recruitment to support workers and communities impacted by global corporate supply chains. 

Our message is growing. Over the past year, SGI added 5 new members and are developing many more prospects to diversify our faith traditions. Our quarterly webinars, semimonthly blog articles and weekly newsletters kept our members informed on our issues and trained on our tactics.

So what do we have to look forward to in 2019? Our Corporate Engagement Plan is bigger than ever including 53 companies in active dialogue with over half of our members. SGI members have filed or cofiled 28 resolutions to amplify our voice to the broader shareholder base. SGI staff and members are active in ICCR leadership and program workgroups. 

Fr. Dan Crosby said it best in his keynote speech at our 45th anniversary when he spoke of his bother Fr. Mike’s conviction to live the Gospel. He reminding us that “change is inevitable, growth is optional”. He ended saying that “…four virtues are essential to SGI’s work: collaboration, solidarity, courage, …….and hope”.

A very blessed holiday season to you and your family, and a hopeful New Year!

Proposed Rollback of Methane Regulations Threatens Long-term Viability of Oil and Gas Sector

SGI joined a group of investors in a letter sent to oil and gas companies to warn against the Environmental Protection Agency’s (EPA) proposed rollback of the New Source Performance Standards (NSPS), a regulation the investors say is critical to the long-term viability of the oil and gas sector in the energy transition already underway.

Sent to 30 companies on behalf of 61 investor signatories representing US$1.9 trillion in assets under management, the letter calls upon the companies to offer public support for continued EPA regulation of methane emissions and to oppose the elimination of direct regulation of methane emissions.

More than 610 different companies accounted for 50% of U.S. oil and gas production in 2017. While most of the companies receiving the letter have responded positively to investor engagement on methane management, there are hundreds of companies that are not managing methane emissions carefully, which threatens the reputation of natural gas as a ‘cleaner’ fossil fuel.  A study earlier this year in the journal Science estimated that in the U.S., methane equivalent to 2.3 percent of all the natural gas produced in the nation leaks into the atmosphere during the production, processing and transportation of oil and gas every year.

Strong and fair methane regulations, which require companies to conduct regular inspections for leaks and report on their methane management efforts, create a more stable environment by leveling the playing field among U.S. oil and gas companies. As the U.S. is a net exporter of natural gas, and as an increasing number of countries adopt legislation and other policies to address climate change, sound methane regulation preserves the industry’s global competitiveness. According to the recent IPCC report, countries won’t be able to limit global warming to 1.5 degrees Celsius above pre-industrial levels, considered by some scientists and policymakers to be the “safe” limit of climate change, without immediate and rapid reductions in a wide range of greenhouse gases, including methane.

In 2015, ICCR launched a concerted methane campaign with the goal of engaging primarily U.S. companies across the natural gas value chain on improving disclosure, reducing emissions and reporting critical information on methane management efforts, such as leak detection and repair (LDAR). If the EPA is successful in rolling back the NSPS, LDAR, currently one of the most cost-effective ways to curb dangerous methane emissions, will be significantly weakened which, investors say, benefits no one. 

Apart from publicly declaring their support for the NSPS Rule, we ask companies to submit comments to the EPA regarding the benefits of industry-wide methane regulation by December 17th. 

“The companies receiving the letter are large producers representing 35% of U.S. oil and gas production,” said Rob Fohr of the Presbyterian Church, USA.  “Our hope is to convince these more influential companies to use their voices in support of sensible and cost-effective methane regulation to bring along the entire industry and mitigate the risk of an unregulated market.”

A link to the investor letter and signatories as well as a list of the companies receiving the letter can be found at this link. The complete ICCR press release can be found here. Bloomberg covered the letter in an article here.

What Story Do We Tell?

For an author and former tech company executive, Seth Godin has a no frills blog that offers pithy insight. In a podcast some years back, he observed the following:

“Once you have enough for beans and rice and taking care of your family and a few other things, money is a story. You can tell yourself any story you want about money, and it’s better to tell yourself a story about money that you can happily live with.”

SGI is an organization for those who want to tell a different kind of story about their money than a simple report on the bottom line. Our members are those who want their investments to tell a story consistent with the values and passions of their lives. Our members have served those on the margins in far-flung missions or just on the other side of town. Our members have run schools to provide a quality education, inspired by faith, to those who might not otherwise be able to obtain it. Our members have built health institutions that have served the ill and injured regardless of their capacity to pay. Our members have worked tirelessly to care for and to protect creation. Would it not make sense that the savings destined for their healthcare and retirement, and those funds entrusted to them by generous donors, be used in ways that reflect what our members believe to be important?

Once upon a time, I used to urge folks to look through the last ten checks they wrote—now, I’d suggest that younger readers look through the credit card statement—what do those expenditures say about our priorities and values? The work of SGI is to tell a story with our funds. It is a story that values the poor so often invisible within the economy, especially vulnerable children and women. It is a story where the Earth, its soil and seas and air, is more valuable than the gold and oil buried underground.

A story that focuses solely on the economic return is a story too thin to heal. Indeed, we need a story rich enough to live by. Our story will not interpret the world to everyone’s satisfaction. But, finally, in our judgement, their stories can’t stand up to our stories.

Update: NYT reports on investors’ letter to Disney

In February, we posted news of SGI and its members joining other investors in a letter to Disney to restrict smoking in products from newly acquired Fox film and television assets. Yesterday, The New York Times carried news of our letter in an article entitled “There’s No Smoking in Disney Films. What About When It Owns Fox?

More about the engagement with Disney on tobacco can be found here: