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Responsible investing is at the heart of how philanthropy can further systemic changes needed in our economy, society and environment.
Forward-thinking foundations and families have invested this way for years, but it’s becoming more mainstream. A growing number of philanthropic organizations and individuals see investments as a way to expand impact beyond grantmaking.
In terms of enhancing returns, the careful consideration of environmental, social and governance factors can unearth information that the market is not yet considering. Over the years, the old thinking—that by investing in a responsible way, returns are limited—has been put to bed by many academic studies.
As board and investment committee members turn over, bring younger, more diverse voices to the table. The usual navel-gazing and promises to “look into it” still abound. But these days, action tends to follow.
This may include rewriting investment policy statements to better describe expectations to investment managers (and hold them accountable), or engaging new advisors and managers who take impact seriously, especially focusing on diverse managers. One of the most important ways to drive impact on inclusion at the manager level is for clients to ask for and reward that change.
In the last six months, the RFPs we received from foundations:
- Have a significant, new focus on diversity at the manager level
- Asked how we use a gender and racial lens in the actual investment process
- Wanted to understand the impact their dollars will have
Read the full article aboutresponsible investing by Sonia Kowal at Exponent Philanthropy.