T100: Powered Ascent is the second report in Toniic’s longitudinal study of portfolios in the 100% Impact Network.
Emilie Cortes, CFA, CAIA, joins Toniic as the new Chief Financial Officer
SAN FRANCISCO – Toniic Institute, the global action community for impact investors, announced today the appointment of Emilie Cortes, CFA, CAIA, as its new Chief Financial Officer.
“Emilie has the perfect background for Toniic. She has previously run global businesses, has experience in the traditional financial sector, has served in financial oversight roles in philanthropy, and has been deeply involved in impact investing for nearly a decade,” said Adam Bendell, CEO of Toniic. “She is a great fit for our culture, too, with a strong reputation of bringing both her heart and her head to every role she plays.”
Emilie’s 22-year career in financial services has spanned institutional and philanthropic investment management, private company business valuations, quantitative risk analytics for equity and fixed income investors and bringing Structured Credit transactions to market. Emilie also acquired and ran an international women’s adventure travel company out of Bend, Oregon, where she won Bend Chamber of Commerce Entrepreneur of the Year Award, and managed a leading safari and trekking company out of Arusha, Tanzania.
“I am excited to focus my full energy on the impact investing field,” explained Cortes. “I am passionate about moving capital toward noble missions and well-run companies to effect positive change as rapidly as possible. It will be my pleasure to help shepherd Toniic Institute with respect to financial sustainability to ensure we can continue to maximize our impact, promote the impact investing field, and deliver value to our inspired member community.”
Emilie received her MBA in Finance from UC, Berkeley and her BSBA in International Business from American University, summa cum laude. Emilie holds the Chartered Financial Analyst designation, Chartered Alternative Investment Analyst designation, as well as certificates demonstrating business level proficiency in French and Spanish.
Emilie will continue to be based in Bend, Oregon, with frequent travel to Toniic headquarters in San Francisco, California.
About Toniic Institute
Founded in 2011, Toniic Institute is the global action community for impact investors, with members in over 20 countries. Toniic provides family offices, high net worth individuals, and foundations with access to investment opportunities, tools and thought leadership as they grow their impact investing practices. For more information, visit www.toniic.com.
TONIIC T100: REPORT OFFERS INSIGHTS FROM 37 IMPACT ADVISORS AND CONSULTANTS WHO ARE TRANSFORMING THE FINANCIAL SERVICE INDUSTRY
Berlin, DE and San Francisco, CA – Toniic Institute*, the global action community for impact investors, today released T100: Insights from Impact Advisors and Consultants 2017, at the Berlin Green Investment Summit. This is the second report in the T100 Research Project, a longitudinal study of 100% impact investing portfolios of Toniic members.
In this new report, 37 impact advisors and consultants from 12 countries, partnering with 38 of Toniic’s 100% Impact Network* members, open the door to their impact practices to demystify, inspire and activate both investors and the financial services industry. While today there are more impact firms and product offerings to choose from than ever before, information on impact intermediaries, especially for private asset owners, remains sparse despite the growth of the industry.
“As a trusted third party, Toniic can aggregate information through the T100 Project, and help investors and advisors learn from what’s happening on the frontier of impact investing,” said Toniic CEO Adam Bendell. “With this second report in the T100 project, we complement the initial findings of the ‘T100: Launch’ report with the perspective of active impact advisors and consultants in the field, helping private and institutional investors moving to 100% impact in their portfolios.”
“What we see is a dedicated, articulate, optimistic, innovative, and definitely persistent group of entrepreneurial founders as well as large company intrapreneurs,” said Lisa Kleissner, co-founder of Toniic and its 100% Impact Network. “Beyond fulfilling their clients’ impact needs, they are building new impact products and services, and volunteering their time to strengthen and grow the impact ecosystem. All of them, while cognizant of the challenges, are optimistic there are solutions and a bright future for impact.”
Impact advisors and consultants surveyed are reporting:
- A significant increase in the depth and diversity of the impact intermediary offering, with sector growth led by client demand. That demand is led by women and millennials asking for values-aligned investment opportunities.
- Challenges, like impact measurement and access to appropriate investment opportunities, remain, but none deemed insurmountable.
- Accomplishments and optimism as milestones are being achieved. Survey respondents shared success stories, from engaging with new impact clients and transitioning existing clients into impact, to creating new products, and becoming a viable 100% impact advisory business.
- Financial returns are on target. Clients target mostly market-rate financial returns. In some situations, clients want and intermediaries are finding high impact investments targeting sub-commercial returns.
- Looking to the future, all surveyed agree. Outlook = Growth. Respondents anticipate growth in the number of investors, advisors, and consultants in the space, growth in the breadth and depth of products and services available, and growth in talent entering the ecosystem.
As one advisor concluded, “At the end of the day, it is all about moving past the noise in the system to get to the more important task of co-creating the long-term plan for our planet.”
The T100: Insights from Impact Advisors and Consultants 2017 report is available for download at www.toniic.com/T100.
Podcast interviews with five advisors supporting Toniic members, conducted by Toni Johnson of Mission OutLoud with support from the Heron Foundation, are available at www.toniic.com/T100.
*About Toniic and the T100 Project
Toniic is the global action community for impact investors. Toniic’s members in more than 20 countries share a vision of a global financial system creating positive social and environmental impact. Toniic’s mission is to empower impact investors.
Toniic 100% Impact Network members, a sub-group of the Toniic membership, have committed to move an entire investment portfolio into 100% impact across asset classes. Portfolios range in size from less than $2 million to more than $300 million for an aggregated commitment of close to $4 billion.
The T100 Project is a longitudinal study of the portfolios of some of those investors. It reveals insights into the impact journey and feasibility of 100% impact investing. The T100 project includes periodic reports, issue briefs, videos and podcasts, and the Toniic Diirectory, a peer-sourced directory of over 1,000 impact investments across all asset classes. For more information, visit www.toniic.com/T100 or contact us at T100@toniic.com.
Media Contact: Danielle Lacasse, Toniic UK ; email@example.com; US Cell +1 (415) 746-9813
TONIIC T100: LAUNCH REPORT
OFFERS NEW INSIGHTS FROM THE FRONTIER OF IMPACT INVESTING
Toniic Diirectory Provides Searchable Catalog of 1,000+ Impact Investments
San Francisco, CA – Toniic Institute, the global action community for impact investors, today released T100: Launch – Insights from the Frontier of Impact Investing, in a presentation at the GIIN Investor Forum 2016 in Amsterdam. It is the first report in a longitudinal study of impact investing portfolios of Toniic members, starting with 51 portfolios. The data analyzed reveals that 100% values alignment can be achieved today in the investment portfolios of high net worth individuals, foundations, and family offices, including those portfolios seeking market-rate returns.
The inaugural T100 report relies on private portfolio data shared by Toniic 100% Impact Network members, ranging in size from less than US$2 million to more than $100 million, with combined capital of more than $1.65 billion. The T100: Launch report is available for download at www.toniic.com/T100.
As part of the T100 project, Toniic also announced the launch of the Toniic Diirectory, a publicly accessible, peer-sourced catalog of more than 1,000 impact investments made by its members, upon which the T100 findings are based. The directory is searchable by impact categories, impact themes, asset classes, management structure, liquidity profile, and impact geography, and is available for review at www.toniic.com/toniicD.
The T100: Launch report offers insights from the frontier of impact investing – from those investors who have committed to go “all in” to impact-alignment across all asset classes in a diversified portfolio. It reaches the following conclusions:
- 100% alignment of one’s investment capital and values is possible today.
- Alignment is for everyone. Geography is no barrier, nor are particular causes or themes.
- Investors have found investments they consider impactful across all asset classes.
- Measurable impact can be generated by a wide range of portfolio asset sizes, liquidity objectives, and investor types while also achieving market-based financial returns.
- On average the portfolios are 64% deployed with impact and 33% have already reached 90% or greater impact.
“As a trusted third party, we can aggregate information through the T100 Project, and help investors learn from what’s happening on the frontier of impact investing,” said Toniic CEO Adam Bendell. “With these initial findings, the T100 Launch report begins to unravel certain myths about the potential for impact investing. We see now that impact returns can come alongside financial returns, and that one can achieve positive impact in virtually every asset class, not just in early stage private equity.”
The T100: Launch report is the first in an upcoming series of reports to be issued by Toniic as part of the T100 project, based on data drawn from the increasing scope of the Toniic Diirectory. This will provide a newfound perspective into the efficacy of value-aligned impact investments in yielding positive financial returns alongside targeted positive impact.
To contribute to the Toniic Diirectory, investors will be able to utilize the accompanying Toniic Impact Portfolio Tool, which enables them to see relationships between asset classes and impact in their own portfolio of investments, and contribute to the demonstrative power of sharing actual investments in the Diirectory.
Over time, the Diirectory will grow with new investment data, serving as a living resource for impact investors. Significant industry players, including the Tides Foundation and ImpactAssets, have already agreed to add their investment information into upcoming versions of the Diirectory.
“This report and its underlying data is the starting point of a multi-year longitudinal study to follow 100 portfolios over multiple years,” said Dr. Charly Kleissner, co-founder of Toniic and the 100% Impact Network. “We believe the results of these efforts will make an important contribution to developing the new financial system, a system that will have positive impact at its core.”
About Toniic and T100
Toniic is the global action community for impact investors. Toniic’s 160 members represent more than 360 impact investors from 22 countries who share a vision of a global financial system creating positive social and environmental impact. Toniic’s mission is to empower impact investors.
More than half of Toniic members are also members of the Toniic 100% Impact Network, each of whom have committed to move an entire investment portfolio from less than $2 million to more than $300 million into 100% impact investments. This represents a total commitment of close to $4 billion.
The T100 Project is a longitudinal study of the portfolios of some of those investors. It reveals new insights about the various paths towards and feasibility of 100% impact investing. The T100 project includes periodic reports, issue briefs, videos and podcasts, and the Toniic Diirectory, a peer-sourced directory of over 1,000 impact investments across all asset classes. For more information, visit www.toniic.com/T100 or write us at T100@toniic.com.
By Alan Pierce
An annual mecca for impact networking and knowledge sharing, Social Capital Markets convenes an impressive array of plenaries, breakout sessions, and speakers. And at this year’s conference, SOCAP16, members of Toniic’s impact investor network held a considerable presence on stage. Over the course of three days and approximately 150 unique panels Toniic members led or participated in nearly a fifth of them.
I attended some of these events to listen to the Toniic community as they shared knowledge, experience and vision for leveraging capital in service to systemic social change. Below is a brief peek into three of these sessions with insight from the Toniic members who hosted them.
Each includes one memorable quote, a key insight, and, in alignment with Toniic’s mission as a global action community of impact investors, I have also offered an actionable message based on those insights.
Jed Emerson, Blended Value
A key quote: “This is not a conversation about trade-offs and compromise and marginalizing profitability in order to create some sort of fuzzy concept of charitable good. It is about how do we create a more integrated approach towards value creation through our companies, through our communities, through our capital. That’s the conversation.”
A key insight: Intentionality. Emerson cautions that the recent, rapid evolution of impact investing has introduced a propensity to de-emphasize the “why” in favor of the “how.” He urges us to hold a clear vision for why we are doing what we are doing, honoring our shared drive to raise humanity using purposeful capital structures. Without clarity of this embedded intentionality we may become prone to avoiding complexity in favor of “cheaper,” easier impact goals, a process which could ultimately compromise the reach and sustainability of that impact.
An actionable message: In your organization, your job, your life, with every decision you make, ask yourself, “Is this in alignment with my/our vision to our greater purpose?” It is a simple inquiry. The challenge lies not in asking it, but in acting always to affirm it. Jed challenges us to strive for the latter.
Supermodels: Constructing an Investment Portfolio With 100% Impact
John Kohler, Miller Center for Social Entrepreneurship
A key quote: “As we’ve observed over the past 10 to 15 years when a new entrant wants to combine money and meaning we invite them to invest in the very hardest place right off the bat, which is to invest in the small social enterprise 6,000 miles away making clean cookstoves, or providing clean water — which is good merit and high impact but very hard to manage right out of the box. So how do we make that much more approachable with people who are high net worth asset owners or institutional fund managers?”
A key insight: For new entrants to the impact investing sphere it is important to first clearly articulate your impact investment vision. I am moved to include this insight because of its evident alignment with Jed Emerson’s emphatic call to be guided by a greater “why.” Kohler echoes this emphasis suggesting that it will ultimately help inform which asset classes are most reasonable and available to you. With a clearly defined impact thesis or theory of change you can build out clear thematic choices (e.g. water, education), establish yourself on an impact-return spectrum, and ultimately determine an array of asset classes likely to be most effective in achieving your goals in alignment with an overall vision.
An actionable message: Begin modeling an impact portfolio that is structured around a theory of change model that speaks to what moves you or your organization. If you have already done so, or are in this process, perhaps share what you have learned along the way. It is important to collaborate on such best practices. Because as Kohler and others (e.g Toniic 100% IMPACT Network members) encourage such dialogue and act on it, we move more swiftly from conversation to effective action, implementation, and systemic change.
Paying For Impact: How New Kinds of Incentives Are Boosting Businesses That Serve The Poor
Rodrigo Villar Esquivel, New Ventures Mexico
A key quote: “One of the problems in raising money in Latin America is exits. Many entrepreneurs we have seen, great companies and great ideas, they are not thinking about selling their company. People build companies to have a solution to a problem or just to have a way of life, to have it for their family…So we created a way to invest in which people don’t have to sell.”
A key insight: Cultural and social norms may call for non-traditional investment models. Villar brings a perspective from Mexico and Latin America where impact investing remains a more nascent, albeit growing, field. While he acknowledged this perspective is not true for every single entrepreneur it sheds light on what is still a prevailing mindset. To meet these entrepreneurs where they are, in terms of values, can mean exploring things like social impact bonds, or other pay-for-success models. The ability to structure and implement such a process may depend on how directly you can measure the outcomes of a product or service. Indeed, Villar emphasizes the best companies for such models are those that have a product or service that is directly solving a social problem (e.g. providing affordable healthcare services for treatable blindness → you can measure how many people are able to see again).
An actionable message: One active and perhaps more subtle take-away from Villar’s insights is to embrace cultural sensitivity when approaching an impact investing opportunity. Instead of forcing a square peg in a round hole, try to explore and harness the cultural nuances of a region’s entrepreneurial consciousness. In doing so you might discover alignment and realize returns in places and in ways that expand opportunity, and impact, for all involved.
* * *
Alan Pierce holds a master’s degree in Social Entrepreneurship from Hult International Business School. While at Hult he co-led the development of a student-run accelerator for local social enterprise startups, and received a management consulting certification. Prior to pursuing this degree Alan worked for a number of nonprofits in the SF Bay Area. This included an institute conducting research on individual and social transformation, at which he published several academic papers.
Adam Bendell, former CEO of Strategic Discovery and CINO of FTI Consulting, named to lead Toniic Institute
SAN FRANCISCO – The Toniic Institute, a nonprofit global organization of impact investors, announced today the selection of Adam S. Bendell as its next chief executive officer, commencing July 1, 2016. Bendell brings entrepreneurial, financial, operational, marketing and business development expertise to Toniic, along with experience managing global teams.
As CEO and co-founder of Strategic Discovery, a San Francisco–based consulting and technology company, Bendell successfully negotiated its acquisition in 2008 by FTI Consulting. He served as chief innovation officer with FTI Consulting until February 2016. Bendell is a seasoned impact investor whose personal impact themes include eldercare, plant-based food alternatives to factory farming, and business models across sectors that monetize data aggregation.
“The Toniic board was attracted to Adam’s previous success as a CEO, his track record of innovation, inspiring vision and drive for excellence—all balanced with a big heart,” said Lisa Kleissner, Toniic board chair. “We are confident that Adam has the skill, passion and vision to partner with our team, our members and our impact colleagues to take Toniic and the growing field of impact investing to a new level.”
“I am thrilled to have this unique opportunity to combine my experience in innovation and building businesses with my passion for impact investing,” said Bendell. “The field of impact investing is now irrevocably on the map, and Toniic is uniquely poised and ready to scale. Toniic has a major role to play across investor education, community building and capital deployment. The impact community looks to Toniic, one of the most trusted brands in the space, for leadership. Whether it’s for those of our members working to transition their portfolios to 100 percent impact investing, those who look to Toniic for opportunities to invest in direct deals and funds, or those just getting started in impact investing, Toniic sets the pace.”
Prior to working at Strategic Discovery, Bendell was president and co-founder of SV Technology, a knowledge-management software firm whose flagship product, LawPort, was acquired by SydneyPLUS International (now Lucidea). Before that, Bendell served as chief technology counsel at Gibson, Dunn & Crutcher LLP. He graduated from Cornell University, was a visiting student at the London School of Economics, and received his juris doctor from the University of Chicago Law School. He resides in San Francisco with his wife, Tracy.
Alison Fort will continue to serve as acting CEO of Toniic until July 1, 2016, when she will resume her leadership duties as Toniic’s managing director for EMEA.
About Toniic Institute
Founded in 2011, Toniic Institute is the global action community for impact investors, with members in over 26 countries. Toniic provides family offices, high net worth individuals, institutions and corporations with access to investment opportunities, tools and thought leadership as they grow their impact investing practices. Toniic leverages its global member expertise in impact investing to produce open-access e-guides on topics such as crowd investing, early stage investing, and impact measurement. Toniic ImpactU provides transformational learning opportunities for impact investing around the globe for both members and nonmembers. For more information, visit www.toniic.com.
There have been many articles and books written about the challenges for women in business and work-life balance – from Sheryl Sandberg’s “Lean In” to Anne Marie Slaughter’s “Why women still can’t have it all.”
On the other hand, there is little written specifically about the intersection of women and their leadership roles as socially-responsible investors. We define impact investing as investing financial capital into financial products which aim for return and social or environmental positive impact. As an investor community, we wanted to explore our role as women in the sector, either as professionals or as asset owners…
What do women uniquely contribute to the movement of impact investing?
In March 2015, twenty five women and two men gathered together in Scotland at an event organized by Toniic, an impact investing membership-based organization, to discuss the role of women and impact investing. It was an exceptional group of women dedicated to using investments to build a better future.
Following from the inspirational conversations generated at this gathering we, as women working in the impact investing sector, were inspired to write this blog to share some of our reflections.
Over the next 40 years, $41 trillion of wealth transfer is expected around the world. Morgan Stanley stated that by 2025, women will control or manage roughly 2/3rds of US private wealth. This is a significant shift and drives home the importance of engaging and acknowledging the powerful force that the women who will be inheriting this wealth can play in changing the face of investing.
At Toniic, one of our goals is to inspire conversations to take place around the world so that women feel as though they have strong support structures to become active impact investors. A number of the women participating in the gathering in Scotland have been working in the impact investing space for a number of years and were open and vulnerable about some of the challenges they were facing, such as balancing their work and family life or facing gender bias. Although this is socially-minded sector, and in appearance egalitarian, we realized that many of the biases of the mainstream financial or corporate sectors also exist within the sector of impact investing. And most of the decision-makers in family offices, impact investing funds or firms were men, despite a few organizations such as Acumen. If we are not self-aware, we could replicate the status-quo. It was further highlighted how rare it was for women, even as investors in a company, to be board directors and particularly chairwomen of boards. And of course, many stories came about as to the lack of support of women towards women. In many cases, we came to realize our own biases against women as entrepreneurs, managers or investors. As a group, we committed to become alert to these biases and commit to changing these dynamics.
At the top, women often feel as though they have to act as men in order to thrive in male-driven environments. Rather than women feeling the need to conform to the prevailing culture, it is important that women recognize the unique skills that make them strong impact investors. Some of these attributes include empathy, collaboration and being intrinsically socially minded. Also, if EQ is higher in women than men, this should bode well for women as early-stage impact investors, which at its core is about evaluating people and management teams.
We discussed different ways in which we could support each other, including recommending each other for speaking positions, mentoring female millennials, coaching women on negotiating skills and supporting women to ‘own their own power.’
Ingrid Stange who has been at the forefront of the impact investing sector in Norway argues that “women own half the sky and therefore we should make sure that women own half the world.” By supporting one another, we believe this can become our new reality.
Gender Lens investing, or investing capital in women-run companies, is also a key component in empowering women as business owners. There are numerous initiatives, such as the Girl Effect, that help to unlock greater capital for women and girls. There is also a need for an increasing number of platforms and products to support gender lens investing.
None of this deflects from the essential role that men play in impact investing. It is furthermore essential that men engage women more proactively in this sphere and also tale part in this conversation.
A large part of the vision at Toniic is that anyone can be an impact investor. Women, no matter in what wealth bracket, can play a critical role in directing investments towards socially-minded causes. And better yet, we are convinced that this sector cannot take off and become mainstream if women, as asset owners, do not get increasingly involved.
So how can more women be actively engaged in impact investing? What can we do to unlock more capital into women-run companies? What new products could be created to help support women impact investors?
We are very interested to hear your perspectives on this. Please write your comments below. And join our movement now! @Toniic
We also invite you to view the video from this retreat, entitled Toniic Women of Impact.
by Jenna Nicholas, Stephanie Cohn Rupp
During the last week of February, I was fortunate to attend the fifth Latin American Investment Forum (it goes by “FLII”, its Spanish Acronym). Over the past five years, this annual gathering in Merida, Yucatan has grown into a premier event in Latin America that seeks to strengthen the ecosystem for social entrepreneurship and impact investing.
This year, more than 300 organizations gathered in Merida, Yucatan representing social entrepreneurs, investors, government entities, development banks, financial institutions, corporations and academics – to exchange knowledge and build the region’s community active in the field of impact investment and entrepreneurship.
It was my first time at the FLII and what immediately struck me was the variety of different players it attracted. On the first day of the conference, the panel representing the Government of Yucatán, National Institute of the Entrepreneur, New Ventures, HSBC and CEMEX welcomed the participants. This sent a strong message on the need for cross-country and cross-sectorial strategies required to address social issues in the region.
The conference has three overarching objectives: 1) mainstreaming impact investing in Latin America; 2) promoting ideas, trends and innovation in the impact investing eco-system and 3) fostering social entrepreneurship as a critical driver for growth in the emerging economies. The busy agenda spans three days of back-to-back sessions: speed pitches by the impact businesses, inspiring speed talks, roundtable panels with specialists, interactive workshop sessions and networking lunches. This whirlwind of a program is meant to inspire and encourage participation to ensure the conference results in collaboration opportunities and lasting connections.
FLII is organized by New Ventures Mexico, a leading platform that catalyzes social and environmental entrepreneurs and fosters development of the region’s ecosystem that supports them. New Ventures Mexico is a Toniic member. New Ventures provides innovative impact businesses with financing, technical assistance and networking opportunities such as FLII. The acceleration program provides innovative businesses with strategic support to strengthen their business models and scale impact.
The financing is provided through Adobe Capital Social Mezzanine Fund. Rodrigo Villar is the Managing Director at New Ventures Mexico and Partner at Adobe Capital as well as a Toniic member. The fund provides capital ranging from $100,000 to $3 million in debt, mezzanine and capital options, with flexible terms. What is unique about this arrangement is the technical assistance component – through taking board seats, supporting GIIRS certification, one-on-one mentoring sessions, and strategic networking.
Such combination of the accelerator support, investment and conference outreach creates an effective and powerful platform to support social entrepreneurs and ensure successful outcomes.
This year, the conference featured ten finalists of “I3 LATAM: Impact Fostering Innovation in Latin America”, a joint initiative of the Swiss Agency for Development and Cooperation (SDC), Hystra, Ashoka and New Ventures Mexico. The program identifies and catalyzes top ten entrepreneurs in the region who are then given an opportunity to pitch and connect with potential partners and investors at the FLII. The acceleration program includes a trip to San Francisco and Silicon Valley to meet with leaders in entrepreneurship, innovation and impact investing. The participating companies are also assigned a mentor in their home country to develop a strategic plan. These ten cases of success serve as inspiration for the region’s new generation of entrepreneurs.
I was impressed by the innovative ideas entrepreneurs presented at the conference. One of the companies, Ecofiltro, produces and distributes water filters for rural communities in Guatemala employing people from local communities. Another company, Carbon roots, aims to replace wood charcoal by converting agricultural waste into a cleaner cooking fuel to combat deforestation in Haiti. These are just some examples of the many outstanding entrepreneurs who participated in the conference.
The plethora of talented entrepreneurs and active engagement of the local private and public players encourages Toniic to continue supporting FLII. Stephanie Cohn Rupp, CEO of Toniic, introduced the goals and scope of the conference together with Toniic board member, John Kohler of Santa Clara University. She also led the workshop on due diligence. I was privileged to participate on the “Green Initiatives: Climate Change” panel and share the work of Divest-Invest Philanthropy.
For me, the conference was a unique opportunity to learn about the vibrant and growing impact investing sector in Latin America and meet the key players. At Toniic, we are excited to see the region’s impact investing community grow and an increasing number of innovative ideas successfully implemented and scaled.
by Jenna Nicholas, Toniic Fellow
February 2, 2015
One of Toniic’s newest members, BNP Paribas recently launched the first World Bank Green Bond linked to an equity index. For the Toniic members who are looking at how to create impact across asset classes, having fixed income socially responsible products such as green bonds is extremely valuable. Toniic co-founders, Charly and Lisa Kleissner are also the recent recipients of the BNP Paribas Philanthropy award.
A Green Bond, is a debt instrument issued to raise financial capital for the exclusive support of projects with specific environmental benefits. A relatively new asset class, the Green Bond originated to satisfy demand from Scandinavian pension funds looking to incorporate fixed- income climate change products to their investment portfolios. Responding to the demand of institutional investors, the first Green Bond was issued in 2008 by the International Bank for Reconstruction and Development (IBRD), one of five institutions that comprise the World Bank Group. The first issue was originally worth 2.325 billion SEK ($USD 3.53 million). Its proceeds were earmarked for select IBRD environmental projects tackling global carbon emissions or climate change resilience.
Green bonds are tied to a very specific climate-related or otherwise environmentally beneficial purpose or technology, and are explicitly labeled as “green” at the time of issuance. They are also the first investment grade “plain vanilla” security whose proceeds are earmarked and used to finance climate projects; issuers borrow for a defined period of three to 25 years at a fixed interest rate (Gustke, 2013). Unlike green stocks or green equity-indexed bonds, Green Bonds do not usually expose investors to the risks of the specific green projects funded by the proceeds, as they are often backed by large development banks or companies (Gustke, 2013).
Once limited to issuers from large international financial institutions, the total value of outstanding Green Bonds doubled in 2013 as the type of issuers broadened and investors warmed to the green market. According to the Climate Bonds Initiative (CBI), an investor-focused non-profit, around $USD 7.8 billion-worth of explicitly advertised Green Bonds were issued by the end of 2012, mostly by the World Bank and other multilateral lenders; $USD 6.4 billion of which is still outstanding. In February 2013, the IFC issued a $USD 1 billion Green Bond, over 20 new Green Bonds followed, with most new bonds worth over $USD 250 million. That same year, in a watershed event that significantly broadened the scope of issuers, the first corporate labelled Green Bonds were issued by Électricité de France, Vasakronan and Bank of America Merrill Lynch. By the end of 2013 the market stood at approximately $USD 15 billion in outstanding bonds. (Kidney, 2014) As of 2014, more than $USD 19.9 billion in Green Bonds were issued worldwide and are projected by the CBI to reach $USD 40 billion by years end (Gustke, Quarterly Investment Guide, 2014).
It is exciting to see the growth of the green bond market and expect this growth to continue as more investors are thinking about the alignment of their values and their investments.
One of the important issues related to green bonds is the question of what counts as green? Please check out this link for more of an exploration of this question: Setting Standards in a Booming Market: What Makes Green Bonds Green?
One example of a green bond project issued by the World Bank’s IBRD is this project in China. For more project examples, please see, World Bank Green Bonds
by Jenna Nicholas, Toniic Fellow
As Millennials are entering the work force, both demand and supply for jobs with social and/or environmental impact has increased tremendously. Similar to consumers who are increasingly seeking out fair trade labels and lead certifications, young job seekers today are screening their prospective employers for value alignment. Moreover, the younger generation is redefining the very nature of work, demanding more flexibility with many people choosing to work on a freelance basis and juggling several projects at the same time. Considering that by 2015 Millennials will constitute 75% of the global workforce and by 2020 freelancers are expected to make up 50% of the full time workforce, companies are taking note of these trends and are changing the way they do business to retain and recruit top talent.
As several recent studies point out, Millennials are increasingly interested in social and environmental issues and this is reflected in their expectations from businesses. In fact, the 2014 Deloitte Millennials Report indicates that 63% of Millennials donate to charities and 43% actively volunteer. The same survey reveals nearly 50% of Millennials want to work for a business with ethical practices. They believe business can do more to address society’s challenges of resource scarcity (68%), climate change (65%) and income inequality (64%).
These larger societal trends are translating into what younger people consider important when choosing jobs. The 2012 Net Impact Survey results show that “employer has similar values” was ranked high by both workers (67%) and graduating students (74%), followed by “contribution to society” and “make a better world”. The same survey reveals that job satisfaction is also significantly higher among those employees that have the opportunity to make a direct social and environmental impact by a 2:1 ratio. Similarly, two-thirds of graduating university students report making a difference through their next job is a priority and 45% of students say they would take a pay cut to do so.
As demand for impact jobs grows, so do opportunities to hone the necessary skills. Currently, more than 30 business schools in the U.S., Canada and England offer graduate coursework on social entrepreneurship. Many business and public service schools have well-established centers for social innovation, social entrepreneurship and impact investing that provide their students with both academic and hands-on training to succeed in impact investing and social entrepreneurship sectors.
Responding to these emerging trends, employers are changing the way they do business and are creating more jobs with social and environmental impact. Corporations are changing their operations to become more sustainable. Some businesses go even further and structure public-private partnerships to directly affect certain causes. For example, Nando’s, a South African restaurant group, and Coca Cola launched social impact bonds to fight malaria in Africa. This trend towards greater sustainability and social impact among businesses is evidenced by a growing number of B Corporations. There are now more than 1,000 B Corps from 33 countries and over 60 industries. The Wall Street Journal explains that “more companies are touting the B Corp logo, a third-party seal of environmental and social credentials, to attract young job seekers who want an employer committed to both a social mission and the bottom line.”
It is clear that both supply and demand for impact jobs is there. However, there is a lack of information on both sides to effectively connect job seekers and employers. There is a need for a crowdsourcing platform for impact jobs that would enable companies to connect and communicate easily with pre-vetted professionals to complete a given project. Similar crowdsourcing platforms abound in sectors such as IT, sales, fashion, and translations. For example, Lionbridge Enterprise Crowdsourcing focuses on helping brands increase their international market share and offers 140,000 fully screened crowd workers in 102 countries. Such a platform enables employers to compete for top talent and set competitive pay while reducing the costs of hiring and training new fulltime employees. Job seekers would be able to shop for meaningful projects matching their area of interest and their desired level of flexibility. This may be a way to harness current momentum, engage more people in purposeful projects and multiply social and environmental impact.
by Jenna Nicholas, Toniic Fellow