Category: October 2016 – Aligning for Impact: ESG, SRI & CSR

The Wall Street Journal looks at Patagonia’s Balancing Act: Chasing Mass-Market Appeal While Doing No Harm

Apparel company revamps supply lines, cuts production to maintain its ethical standards

by Erica E. Phillips, The Wall Street Journal


Patagonia Inc. built an $800 million outdoor apparel empire selling heavy-duty jackets, backpacks and long underwear at premium prices, winning a loyal customer base with vows to “build the best product” and “cause no unnecessary harm.”

But as Patagonia’s growth has taken off, the company is finding those two promises coming into conflict.

In 2010, German animal-rights group Four Paws said it found evidence that farms supplying down feathers to Patagonia were force-feeding geese to fatten their livers for foie gras. In 2012, Patagonia discovered brokers were charging migrant workers thousands of dollars for job placement at the company’s factories in Taiwan—a practice human-rights groups say is a form of slavery. And last summer, People for the Ethical Treatment of Animals posted a video online depicting grisly abuse of sheep at South American ranches that sold wool to Patagonia.

Each revelation has caught the company—which promotes itself as the one writing the rules, not breaking them—off guard. In response, Patagonia has set new standards. In Taiwan, it worked with suppliers to repay workers, and in other cases it cut ties with suppliers and rebuilt supply chains from scratch, even as it pursued global expansion and launched new product lines.

Patagonia’s profit has tripled since 2008, and the company maintains a reputation for transparency and socially responsible behavior with its customers, brand experts say. But the company is learning a tough lesson: upholding a strict code of ethics while chasing mass-market appeal is a tricky balancing act.

Companies often run into “a huge disconnect—where [marketing teams] are ready to tell the story before operations and supply-chain teams are ready and able to confirm it,” said Alexis Bateman, a researcher at Massachusetts Institute of Technology’s Center for Transportation and Logistics. “It’s possible they know where the farm is, even who the farmer is, but not what’s happening 365 days a year.”

Patagonia was founded in 1973 by Yvon Chouinard, a surfing, mountain-climbing environmentalist who has written books on socially and environmentally responsible business practices and advised other retailers on ways to improve transparency in sourcing.

“When you’re trying to clean up your supply chain, you can’t believe how deep you have to go,” Mr. Chouinard said.

Under Chief Executive Rose Marcario, who worked previously in corporate finance and private equity, Patagonia has added retail partners across five continents, invested in e-commerce and launched new product lines.

Cara Chacon, Patagonia’s director of social and environmental responsibility, said it felt like her team was “still eyes deep” in fixing the down-feather supply chain last August, when executives learned that PETA was planning a campaign against the company’s wool supplier. Within 24 hours, they learned, PETA would be posting a video to its website showing rough treatment and mutilation of sheep during shearing.

“Wool was on our radar,” Ms. Chacon said. “We knew that it probably wasn’t perfect, but we had no idea that was going on.”


Read the complete article from The Wall Street Journal at

First Time Green Bonds Among New Praxis Investments for Sustainable Coffee, Costa Rica and India

New impact bonds include firsts for sustainable coffee, Costa Rica and India

With new positive impact bond purchases, Praxis Mutual Funds® ( continues its commitment to investing in climate and community.

The positive impact bonds added to the Praxis Impact Bond Fund* ( portfolio will support projects to develop sustainable and renewable energy infrastructure, as well as fund innovative, sustainable corporate initiatives.

“We’re happy to announce the latest positive impact bonds added to the portfolio, which show the unique snapshot of green projects developed by governments, corporations and more,” said Chad Horning, CFA, President of Praxis Mutual Funds and Everence® Chief Investment Officer. “These bonds are an investment in a clean and sustainable future for our world – and a welcome addition to our impact bond holdings.”

Some interesting examples of positive impact bonds purchased in the second quarter 2016:

Axis Bank Green Bond – This Indian bank is the first company in India to issue a certified green bond. The bond will finance climate solutions around the world.

Banco Nacional Costa Rica Green Bond – This Central American nation’s first green bond will finance wind, solar, small hydro and wastewater projects across the country, based on Costa Rican environmental protection standards.

Starbucks Corporate Sustainability Bond – The first of its kind in the U.S., this bond’s proceeds will help Starbucks enhance its sustainability programs in its coffee supply chain management, including fair pay for workers and protection for the environment.

European Investment Bank Green Bond – A leading issuer of green bonds, the EIB is known for its detailed financial and impact reporting. The bank funds projects around the world that work toward energy efficiency and expand renewable energy.

Spruce ABS Trust Green Bonds – Funds from this bond will finance loans for residential solar and home efficiency improvements, helping bring the benefits of low-carbon energy to the average consumer.

Other positive impact bond purchases included bonds from the State of Massachusetts, Westar Energy in Kansas and Toyota Motor Corp.

“When selecting positive impact bonds for the portfolio, we look for those with clear plans to make a significant difference and also add to a well-diversified portfolio,” said Benjamin Bailey, CFA, Praxis Mutual Funds Senior Fixed Income Investment Manager. “We benefit from ever-improving positive impact bond options, as that market continues to expand.”

Positive impact investments now make up almost 23 percent of the Praxis Impact Bond Fund. The Fund’s high social impact investments also include a 1 percent commitment to community development investments that benefit underprivileged communities nationally and around the world. Learn more about how the Praxis Impact Bond Fund is investing to impact climate and community download the Praxis Impact Bond Fund Impact sheet (PDF) on-


About Praxis Mutual Funds and Everence

Praxis Mutual Funds, advised by Everence Capital Management, is a leading faith-based, socially responsible family of mutual funds designed to help people and groups integrate their finances with values. To learn more, visit

Everence helps individuals, organizations and congregations integrate finances with faith through a national team of advisors and representatives. Everence offers banking, insurance and financials services with community benefits and stewardship education. To learn more, visit or call (800) 348-7468.

* Formerly named Praxis Intermediate Income Bond.

As of June 30, 2016, the Praxis Impact Bond Fund has invested 0.34 percent of its assets in the State of Massachusetts, 0.17 percent of its assets in Spruce ABS Trust, 0.28 percent of its assets in Westar Energy, 0.11 percent of its assets in the Axis Bank, 0.23 percent of its assets in Starbucks, 0.68 percent of its assets in Toyota Auto Receivables, 0.17 percent of its assets in Banco Nacional Costa Rica, and 0.47 percent of its assets in European Investment Bank. Fund holdings are subject to change. To obtain holdings as of the most previous quarter, visit

Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates.

You should consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. The fund’s prospectus and summary prospectus contain this and other information. Call (800) 977-2947 or visit for a prospectus, which you should read carefully before you invest. Praxis Mutual Funds are advised by Everence Capital Management and distributed through BHIL Distributors LLC., member FINRA/SIPC. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.

KKR Launches Eco-Innovation Award and Announces New Green Solutions Platform Participants and Results

In the spirit of innovation and value creation, KKR, a leading global investment firm, announced in August 2016 the launch of the Eco-Innovation Award for KKR portfolio companies as part of the Firm’s Green Solutions Platform (GSP) [], a global effort to identify, support, and highlight environmental initiatives at KKR portfolio companies across three areas: eco-efficiency, eco-innovation, and/or eco-solutions. The Eco-Innovation Award is intended to reward current projects or initiatives within KKR portfolio companies that are innovative, environmentally beneficial solutions that create business value.

“Our goal with the Green Solutions Platform and now the Eco-Innovation Award is to encourage and support our companies’ eco-innovation work as we do their eco-efficiency projects,” said Elizabeth Seeger, Director at KKR and a leader of the GSP program. “We hope that by launching the Eco-Innovation Award, we are not only recognizing the achievements of our portfolio companies, but also inspiring them to identify new and enhanced ways of creating sustainable value.”

As part of the August 2016 announcement, KKR also released program results for 28 participating companies in the Green Solutions Platform, 10 of which are entirely new participants. Since the first GSP results announcement in December 2015, the number of reporting portfolio companies in the program has grown, now including 18 focused on eco-efficiency, 5 focused on eco-innovation, and 7 focused on eco-solutions. Of these participants, two report on both eco-efficiency and eco-innovation efforts. These 30 case studies highlight projects across four asset classes, including private equity, special situations, real estate, and infrastructure, as well as span a range of geographies and focus areas.

Private equity portfolio companies communicating results include Capsugel, CITIC Envirotech Ltd., First Data, Gardner Denver Nash, Gardner Denver Thomas, GoDaddy, Goodpack, HCA, Mitchell International, Panasonic Healthcare, Pets at Home, PortAventura, Qingdao Haier, Resource Environmental Solutions, Santanol, Sundrop Farms, Sungard Availability Services, Tarkett, Toys “R” Us, and US Foods. Coriance, European Locomotive Leasing, South Staffordshire Plc, and X-ELIO of KKR’s infrastructure portfolio; KKR’s retail, multi-family, and hospitality real estate portfolios; and Ursa, a special situations portfolio company, are also communicating results.  

Todd Cooper, Managing Director at KKR Capstone, added: “KKR Capstone’s goal is to help our companies create long-term value, which includes our efforts through the Green Solutions Platform. We are proud of the collaboration between KKR, KKR Capstone, and our external partners that built this program over the past eight years, and are looking forward to further growth and innovation.”

The announcement of the first Eco-Innovation Award winner is expected in fall 2016. The winning portfolio company will receive a financial prize to enhance the company’s broader environmental initiatives, as well as relevant and customized project enhancement support from KKR and KKR Capstone. All KKR portfolio companies globally were eligible to apply for the award and projects will be evaluated by business value, environmental sustainability impact, and eco-innovation approach. KKR will select the winner based on its own review, KKR and KKR Capstone employee feedback, and input from a panel of expert judges representing corporate and nonprofit expertise.

For more on KKR’s Green Solutions Platform (GSP) and participating portfolio companies, visit

To read KKR’s annual Environmental, Social, and Governance (ESG) and Citizenship Report, visit


About KKR

KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world?class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE:KKR), please visit KKR’s website at and on Twitter @KKR_Co.

About KKR Capstone

KKR Capstone is an operational team of highly experienced industry executives and functional specialists. The team works exclusively for KKR and its portfolio companies on the ground in partnership with management teams to create sustainable improvements. With offices in the Americas, Asia and Europe, KKR Capstone has the capacity, capability, and scale to support complex, global businesses. KKR Capstone is not a subsidiary or affiliate of KKR.

About the Green Solutions Platform

The Green Solutions Platform (GSP) is KKR’s global effort to identify, support, and highlight environmental initiatives at KKR portfolio companies across three areas: eco-efficiency, eco-innovation, and/or eco-solutions. The program applies KKR’s approach of assessing, measuring, optimizing, and highlighting performance to support participating portfolio companies’ efforts to manage their environmental impacts while also seeking to improve their businesses. The GSP – launched in December 2015 – follows eight years of results and impact from KKR’s pioneering environmental initiative, the Green Portfolio Program (GPP). The GSP now includes nearly 30 reporting companies. For additional information about the program and individual company results, please visit-

Timothy Smith and Rev. William Somplatsky-Jarman Winners of Interfaith Center on Corporate Responsibility 2016 Legacy Award

Pioneers of the Faith-Based Shareholder Advocacy Movement Honored

The Governing Board of the Interfaith Center on Corporate Responsibility (ICCR) is pleased to announce that the winners of the ICCR 2016 Legacy Award ( are Timothy Smith of Walden Asset Management and Rev. William Somplatsky-Jarman of the Presbyterian Church U.S.A. ICCR’s Legacy Award is given to an individual or organization in recognition of leadership and dedication to the vision and mission of ICCR. Both Smith and Somplatsky-Jarman have made outstanding contributions to ICCR and the greater field of responsible investing.

Tim Smith was ICCR’s second Executive Director and served in the role for 24 years during ICCR’s most formative period from 1976 – 2000. He “left” ICCR staff to become an employee of ICCR member Walden Asset Management where he is currently the Director of ESG Shareholder Engagement, co-chair of Walden’s ESG Research & Engagement Committee and a member of the Corporate Governance Committee. Tim plays a valuable role in virtually every ICCR program area but has been an especially effective leader of investor engagements on climate change and on governance topics including lobbying and political spending, executive compensation and separate Chair/CEO, as well as board diversity. The recipient of numerous industry awards, a leader of multiple SRI and corporate engagement initiatives and a valued mentor and colleague, Tim has had a profound impact on the field of responsible investing and is one of the most active members of the ICCR coalition, where he continues to innovate new and more impactful strategies in corporate engagement.

Said ICCR member Sr. Nora Nash of the Sisters of St. Francis of Philadelphia, “ICCR members will always be indebted to Tim for the clarity that he has given to our mission. He continues to provide collaborative leadership in corporate engagements and has empowered numerous investors to challenge corporations on public policy, lobbying, and climate change-related disclosures. Today, Tim still mentors, inspires, leads, engages, and encourages individuals, investors, and corporations to be more committed to systemic change and sustainability. As ICCR members, we are all grateful to Tim for his valued leadership.”

As staff of its Mission Responsibility Through Investment (MRTI) team in the mid-80s, Bill Somplatsky-Jarman helped the Presbyterian Church U.S.A. develop a strategy to pressure banks doing business in South Africa to disinvest and call for the repayment of loans by the government. This launched his career in responsible investment and corporate engagement on behalf of the Church, where he advocated on a number of social and environmental issues including pushing banks on predatory lending; peacemaking; racial, social and economic justice; human rights, anti-sweatshop and labor issues; environmental responsibility including climate change, and securing women’s rights. This year, after 32 years of commitment and impact, Bill retired from his role with the Church. We remain hopeful that we will still find ways to keep him involved with the ICCR family.

Said Board Member Pat Zerega of the Evangelical Lutheran Church in America, “Bill has been involved in this work from the early days, fighting for justice in apartheid South Africa as well as the coal fields of Appalachia. His commitment to our most vulnerable brothers and sisters impacted by discriminatory and predatory practices in the banking arena made him a leader in this work. In addition Bill has been to all but one UN Climate Summit representing the faith community to call for care of God’s creation. His shareholder advocacy efforts on behalf of the Presbyterian Church U.S.A. have had a profound influence on corporate practices and we are grateful for the many contributions he has made to the ICCR coalition.”

Said ICCR Board Chair Rev. Séamus Finn, “The years of commitment to the mission of ICCR and to its members on the part of both Tim and Bill has been a source of inspiration for many and I know I speak for the ICCR community when I say we are truly grateful to them for generously sharing their wisdom, their work and their passion. We look forward to celebrating and honoring both Tim and Bill along with members and friends at ICCR’s annual event in New York City on September 29th 2016.”


About the Interfaith Center on Corporate Responsibility (ICCR)

Celebrating its 45th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to financial and health care services for communities in need. For more information visit-

Gender Lens Investing Assets Under Management Grow Fivefold in Past 2 Years: Invested in Solutions that Impact Women and Girls

More Than $560 Million Now Invested In Solutions That Impact Women and Girls


Gender Lens Investing (GLI) assets under management in public market equities and debt have grown fivefold since 2014 to $561 million, according to new analysis release in September 2016 by Veris Wealth Partners and Women Effect.

The accelerated growth is the result of an increased number of GLI solutions now being offered by money managers, along with demand from individual and institutional investors to place capital in public market securities that directly benefit women and girls.

The analysis found that as of June 30, 2016, there were 15 GLI equity and debt solutions, up from nine as of Sept. 30, 2014. Two of the newest opportunities target non-U.S. investors, including those in Canada and select European and Asian countries.

More than half of the growth in assets under management has been in the Gender Diversity Index ETF (SHE) sponsored by State Street Global Advisors. The ETF was launched in March 2016 and was seeded with $250 million from the California State Teachers Retirement System (CalSTRS).

To view the list of opportunities, please visit Women Effect, an online curated community that brings together GLI stakeholders.

“Gender Lens Investing is growing steadily, but we need sponsors to create more public market investment opportunities,” said Patricia Farrar Rivas CEO of Veris Wealth Partners. “With more investment vehicles, Gender Lens Investing will grow more, and that will be good for women and girls in the U.S. and abroad.”

The joint analysis was a follow-up to Veris’ original survey of GLI solutions conducted in 2013 [1] and then again in 2015 [2]. The most recent analysis found that two-thirds of available products provide both gender criteria and screen for other broader ESG factors, or give clients the option to apply their own.

“Investors are directing more capital to Gender Lens Investing because there are a growing number of terrific opportunities to fund initiatives that positively impact women and girls,” said Suzanne Biegel Founder of Women Effect.


About Veris Wealth Partners

Veris Wealth Partners, LLC is a partner-owned, independent wealth management firm that specializes in impact and sustainable investing. Veris believes that superior investment performance and positive impact are complementary parts of a holistic investment strategy. Veris is based in San Francisco with offices in New York City, Portsmouth, and Boulder. For information, call 415.815.0580.

About Women Effect

Women Effect is the home for people moving capital with a gender lens. We’re a global community of individual and institutional investors, philanthropists and their advisers, who come together to share knowledge, opportunities and best practice around gender lens investing. We are a connecting point and a curated community, collaborating with a diverse set of partners leading thought and strategy around gender lens investing. There is an invitation-only private online community, currently in beta mode, where tools and resources are available to members. For information, visit

Article Notes:[1]


Croatan Institute Releases Clean 15 Investment Portfolio: A Total Portfolio Approach to Fossil Fuel-Free Climate Solutions

A Total Portfolio Approach to Fossil Fuel-Free Climate Solutions


In mid-September, from the main stage of the 2016 Social Capital Markets conference (SOCAP), Croatan Institute President and Senior Fellow Joshua Humphreys announced the release of an educational fossil-free investment portfolio, the Divest-Invest Clean 15. The portfolio includes 15 investment strategies, across five major asset classes, offering institutional investors opportunities to invest in strategies that pursue solutions to climate change and other environmental challenges, ranging from renewable energy to organic agriculture to green buildings and sustainable infrastructure.

The Clean 15 Portfolio is available for download at-

“The fossil-fuel divestment movement has reached a critical moment,” said Dr. Humphreys. “Hundreds of investors with trillions of dollars in assets have pledged to divest from fossil fuels. Now they are increasingly asking how to invest in solutions to climate change. The Divest-Invest Clean 15 provides a valuable educational resource for this growing field.”

The portfolio was developed by a consortium of groups, including strategists and researchers from SOCAP, Good Capital, Martin Investment Management, Impact Assets, and Croatan Institute, and underwritten with the support of Farmland LP, Breckinridge Capital Advisors, Trillium Asset Management, Community Capital Management, Essex Investment Management Company, Fifth Season Ventures, Jonathan Rose Companies, and RBC Global Asset Management.

The 15 managers highlighted in the portfolio include Breckinridge Capital Advisors, Community Capital Management, Craft3, Essex, Farmland LP, Green Alpha Advisors, Iroquois Valley Farms, Jonathan Rose Companies, The Lyme Timber Company, North Sky Capital, Reinvestment Fund, Renewal Funds, Shelton Capital Management, SJF Ventures, and Trillium Asset Management. The composition of the portfolio was discussed on a dedicated panel at the conference, held at Fort Mason’s Southside Theater: “The Divest-Invest ‘Clean Fifteen’: A Total Portfolio Approach to Fossil-Free Investing.”

Presenting on the panel were Ellen Friedman, Executive Director of Compton Foundation; Michael Lear, Vice President of Athena Capital Advisor; and George W. Rooney, Jr., Chief Investment Officer of Collaboration Capital. Dr. Humphreys moderated the discussion.

Introduction from the Clean 15 Booklet

As part of the rapidly expanding fossil-fuel divestment movement, a wide range of investors, from philanthropic foundations and faith-based institutions to family offices and high-net-worth individuals, has pledged to divest from fossil fuels and invest in solutions to climate change. At the 2015 Paris Climate Conference, the Divest-Invest initiative announced that more than 500 institutions with over $3.4 trillion in combined assets had made commitments to divest from the world’s largest publicly traded coal, oil, and gas companies.

At the same time, growing numbers of impact investors are seeking opportunities to mobilize a fuller array of their portfolios in pursuit of beneficial social and environmental impact, alongside financial returns. The 2015 SOCAP conference in San Francisco included a dedicated Divest-Invest thematic track where impact investing practitioners and thought leaders came together to explore high-impact, fossil-free investment opportunities emerging across asset classes. Building upon those conversations at SOCAP15, a consortium of organizations has developed a total portfolio approach to fossil-free investing with impact. This paper provides the results of that initial effort. Dubbed the “Clean 15,” this Divest-Invest portfolio includes 15 examples of investment strategies across five major asset classes commonly found in diversified institutional investor portfolios: public equity, fixed income, private equity and venture capital, private debt, and real assets.

In developing the portfolio, the consortium sought out fossil-free investment strategies pursuing solutions to climate change and other environmental challenges, in themes ranging from renewable energy to sustainable infrastructure, from organic agriculture to clean technology. In order to respond to the needs of mission-driven institutional investors, the Clean 15 portfolio focuses on active managers with demonstrable track records of generating high social and environmental performance and competitive financial returns. The portfolio has an explicit domestic bias, with a strong preference for strategies integrating social impact, in addition to environmental performance. These various constraints, developed by the consortium, limited the potential universe of investment opportunities, but also sharpened the focus of the research and portfolio construction process. Over time as the field of fossil-free impact investing continues to mature, we anticipate expanding the criteria for inclusion in order to broaden the universe of opportunities and develop more diversified divest-invest portfolios beyond this initial Clean 15.


The Clean 15 Portfolio is available for download at-

For more information on Croatan Institute’s work on climate solutions, please visit the Fossil-Free Pathways program page at- or contact Dr. Humphreys at

Pax Ellevate Global Women’s Index Fund Crosses $100 Million in Assets and outperforms MSCI World Index

Fund has outperformed MSCI World Index for the two-year period ending June 30, 2016

Pax Ellevate Management LLC, investment adviser to the Pax Ellevate Global Women’s Index Fund (PXWEX) (“the Fund”), announced in early September 2016 that the Fund has gathered over $100 million in assets under management. The Fund — a broadly diversified global mutual fund that invests in the highest-rated companies in the world for advancing women’s leadership — crossed this asset mark as it achieved another recent milestone, outperforming the MSCI World Index* for the two-year period ending June 30, 2016.[1]

“An overwhelming body of research suggests that companies with gender diverse leadership teams simply outperform their less diverse peers,” said Joe Keefe, President and CEO of Pax Ellevate. “The Fund is gaining traction as investors seek out strategies that offer long-term value and make a positive impact. This Fund offers investors the opportunity to invest in companies that are leaders in promoting gender diversity, to benefit from their vision and success, and help close the gender gap in the process.”

“We believe that it is simply smart business to invest in women and that this investment case will continue to be borne out over time by the performance of this Fund,” said Sallie Krawcheck, Chair of Pax Ellevate.

The Fund seeks investment returns that closely correspond to or exceed the price and yield performance, before fees and expenses, of the Pax Global Women’s Leadership Index (“the Global Women’s Leadership Index”).+ The Global Women’s Leadership Index, the first index of its kind, consists of equity securities of companies around the world that demonstrate a commitment to advancing women through gender diversity on their board, in executive management and through other policies and programs, as rated by Pax World Gender Analytics.

For more information about the Fund, visit and sign up for the Why Investing in Women Matters newsletter


About Pax Ellevate Management LLC

Pax Ellevate Management LLC, investment adviser to the Pax Ellevate Global Women’s Index Fund, was founded on the belief that gender equality is critical to business success. The Pax Ellevate Global Women’s Index Fund is the first mutual fund that invests in the highest-rated companies in the world when it comes to advancing women’s leadership. Pax Ellevate is the result of a partnership between Pax World Management and Ellevate Asset Management, whose principal is Sallie Krawcheck, one of the most powerful advocates for women in the financial services industry.

About Pax World Management LLC

Pax World Management LLC, investment adviser to Pax World Funds and creator of the Pax Global Women’s Leadership Index, is a pioneer in the field of sustainable investing. Pax World integrates environmental, social and governance (ESG) research into its investment process to better manage risk and deliver competitive long-term investment performance. Across all of its funds, Pax World withholds support from all-male corporate board slates, and working with other institutional investors, actively engages with companies to embrace gender diversity on their boards and advance women in the workplace. For over 45 years, Pax World has made it possible for investors to align their investments with their values and have a positive social and environmental impact. Today, its platform of sustainable investing solutions includes a family of mutual funds, as well as separately managed accounts.

On 6/4/2014, the Pax World Global Women’s Equality Fund merged into the Pax Ellevate Global Women’s Index Fund (the Fund), pursuant to an Agreement and Plan of Reorganization dated March 4, 2014 (the “Reorganization”). Because the Fund had no investment operations prior to the closing of the Reorganization, Pax World Global Women’s Equality Fund (the “Predecessor Fund”) is treated as the survivor of the Reorganization for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Fund for periods prior to 6/4/2014 is that of the Predecessor Fund.

[1] The annualized returns for the Pax Ellevate Global Women’s Index Fund – Individual Investor class as of 06/30/2016 were, 1 year: 0.48%, 2 year: 0.65%, 5 year: 5.92%, 10 year: 3.23%. The annualized returns for the Pax Ellevate Global Women’s Index Fund – Institutional class as of 06/30/2016 were, 1 year: 0.69%, 2 year: 0.87%, 5: year 6.17%, 10 year: 3.50%. The returns for the MSCI World Index as of 06/30/2016 were, 1 year: -2.78%, 2 year: -0.70%, 5 year: 6.63%, 10 year: 4.43%. The returns for the Pax Global Women’s Leadership Index as of 6/30/2016 were, 1 year: 1.30% and 2 year: 1.42%. Performance data quoted represent past performance, which does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For most recent month-end performance information, visit visit the fund’s performance page. A fund’s performance for short time periods may not be indicative of future performance.

* The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the following 23 developed market country indexes: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. One cannot invest directly in an index. Returns are shown net which includes dividend reinvestments after deduction of foreign withholding tax.

+ A custom index calculated by MSCI.

RISKS: Equity investments are subject to market fluctuations, the Fund’s share price can fall because of weakness in the broad market, a particular industry, or specific holdings. The Fund does not take defensive positions in declining markets. The Fund’s performance would likely be adversely affected by a decline in the Index. Investments in emerging markets and non-U.S. securities are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation, intervention and political developments. There is no guarantee that the objective will be met and diversification does not eliminate risk.

A Framework for Global Impact

by John Hodges, managing director, Infrastructure and Finance, BSR


JohnH+BSR logoAs Managing Director for Infrastructure and Finance at BSR (Business for Social Responsibility), one of the world’s leading nonprofit business networks and consultants dedicated to sustainability with over 250 member companies, I interact with the heads of corporate sustainability for Fortune 500 companies on a daily basis. What is fundamental to these conversations, as well as to my regular conversations with the responsible investing community, is the increasing desire for companies to better understand the broader environmental and social impacts they are having, both positive and negative.

What I mean by “broader” are those impacts that are outside a company’s own walls. Measuring and describing real world impacts is not easy – developmental and non-profit organizations still struggle with how to do it most effectively. Having spent most of my career as a development economist at the World Bank and at other sustainability-focused organizations, I know firsthand that analyzing sustainability impacts can be a mixture of art and science.

The process for evaluating impacts, however, is relatively the same whether from the perspective of a developmental organization, a non-profit, or a for-profit company. The basic approach is to understand the progression from inputs to outputs, to outcomes, and ultimately to impacts.

Companies spend a lot of time in their sustainability reports discussing inputs and outputs, and in some cases outcomes (e.g. my company’s recent shift to only purchasing certified sustainable wood which means more sustainably managed forests which means reduced deforestation). The place where companies are struggling most is to analyze how these outcomes can lead to real world impacts at scale (e.g. reduced deforestation creates a cleaner watershed and less waterborne disease).

The Global Reporting Initiative (GRI), the standard that the majority of the world’s companies follow in their sustainability reports [1], has four main principles for disclosing sustainability information: completeness, materiality, stakeholder inclusiveness, and sustainability context. The last one of these, sustainability context, is my personal favorite. I find understanding a company’s sustainability context to be fundamental to understanding its corporate sustainability impacts.

The concept of sustainability context is simply that companies should present sustainability efforts in the context of wider economic, environmental, and social conditions and trends at the local, regional, or global level [2]. It gives all stakeholders the scale and understanding of the sustainability challenge at hand and the efforts needed to make a real world difference.

The World Bank and other developmental organizations focus on sustainability context. For example, before making any investment, the World Bank evaluates the broader sustainability challenges of its client countries and then articulates how the investment will create positive or mitigate negative sustainability impacts within that context. In my opinion, for-profit companies can do a better job of similarly analyzing the big-picture sustainability context when making business decisions.

A key concern is that without a sustainability context stakeholders are simply left wondering if a company’s sustainability impacts are actually a big deal or not. For example, Coca-Cola Corporation uses approximately 300 billion liters of water a year to make their products. The company has sustainability goals, which they are meeting, to replenish water resources and reduce water waste directly related to their operations.

That seems like a big deal, especially as 300 billion is a large number, Coca-Cola products are found everywhere in the world (I can personally vouch for North Korea), and global water scarcity is an increasing challenge. Stakeholders, including responsible investors, would be interested in what large-scale effect Coca-Cola’s efforts will have on regional or even global water supply resources and sustainability. Furthermore, they would be interested in any efforts being made to collaborate with others beyond Coca-Cola’s own water footprint for even greater impact and scale.

I have found that most companies do want to answer these big picture global impact questions, but they have not had a universal framework to help them do so, until now. The development community first made an attempt at a universal “sustainability context” framework with the Millennium Development Goals (MDGs), established in 2000 by the United Nations and other developmental organizations. The private sector was mainly left out of this first MDG process, however.

The second iteration of global development goals, the 2015 Sustainable Development Goals (SDGs), was more inclusive of companies’ views and their roles in achieving global impacts. It explicitly calls for private sector companies to take leadership roles and for public-private partnerships.

As a result, many companies are beginning to align sustainability efforts and even frame them within the relevant SDGs, which in turn has provided a natural habitat for the companies to describe sustainability context. BSR has spent a good portion of the last year promoting the SDGs as an effective sustainability context framework for our member companies. Some of our findings are available in joint research we conducted with the Global Compact earlier this year, A First Look at How Companies Are Responding to the SDGs [3].

Surveys show that many companies are already making public statements in support of the SDGs and aligning goals around the SDGs. Regarding Coca-Cola, the company now discusses its water sustainability efforts in the great context of the SDGs, specifically using SDG Goal 6 (Clean Water and Sanitation) and its sub-targets [4]. Other examples include Kering, which has aligned its natural capital accounting methodology to SDG Goal 15 (Life on Land) and Novartis, which has launched “Novartis Access“ in alignment with SDG Goal 3 (Good Health and Well-Being).

I find that investors in particular have an important role to play in evaluating companies’ long-term potential vis-à-vis sustainability context. After all, the sustainability context of a company can also provide insight into the potential market for sustainability-focused products and services. The SDGs are a very good indication of how the world will develop over the next 15 years and provide insights into the market opportunities, which will come with that development.

Looking back, the success of Whole Foods Markets was not due to the market for high-quality natural and organic foods at the time the company was founded. Rather, the company experienced significant growth by positioning itself as part of the solution to the context of poor nutritional trends, depleting seafood stocks, and unjust labor practices in agriculture. Investors that understood Whole Foods’ sustainability context well would have recognized the obvious growth potential.

I am seeing an increasing understanding of investors that having a positive global sustainability impact is essential for a company’s overall business success. The United Nations Principles for Responsible Investment also recently announced that it will work with its 1,500 signatories, which represent approximately $60 trillion in assets, to build the investment case for the SDGs.

Building on some of the first-mover cases listed above, there is an opportunity for many more companies to frame their corporate sustainability goals and impacts within the larger sustainability context. With the launch of the SDGs last year, there are emerging resources available to help companies do so. The United Nations Global Compact’s SDG Industry Mix provides guidance on which SDGs are most relevant to specific industries and examples of company efforts. BSR has also developed our own SDG Navigator to help our member companies as well.

Recently my BSR colleagues and I have been increasingly advising heads of corporate sustainability to take a look at the SDGs when they have questions about the sustainability context of their company. The SDGs provide the best universal framework I have seen in my career to begin asking the really important questions about corporate purpose.


Article by John Hodges, Managing Director, Infrastructure and Finance, BSR

With more than 20 years of sustainable development experience, John leads BSR’s global infrastructure and financial services ( practices, advising companies on corporate sustainability strategy, responsible investing and project development, and environmental, social, and governance (ESG) risk management.

Before BSR (, John was the founder and president of SunOne Solutions, a leading carbon project developer in North and South America. John worked as a staff member in the World Bank’s sustainable development group, where he managed global energy and transport infrastructure projects and the vice president for sustainable development’s front office, and served as the infrastructure advisor in the Thailand and Kosovo country offices. He has also held positions in the airline transport industry, with a private infrastructure project developer in Chile, and with an impact investing fund in the Balkans.

John holds an M.P.A. from Harvard University, an International M.B.A. from the University of South Carolina, and a B.S. in International Trade and Finance from Louisiana State University.

Article Notes:

[1] 201511.pdf




Thoughts on Meaning and Mission: ESG, CSR and SRI

by Amy Domini, founder of Domini Social Investments and of The Sustainability Group


Amy+Domini logoOne of the most stubborn problems facing practitioners of responsible investing is the name game. Despite the fact that the practices of any one firm are almost universally accepted practices at all firms, we ourselves choose to confuse the public with a myriad of names. Business schools ‘teach’ nuances implied by the use of differing titles; our own sales literature emphasizes one language while attempting to position this as an advance over other phrases.

While the use of differing vocabulary may signal to the cognoscenti a subtle difference in target market, these subtleties are lost to the mainstream. As an example, Bloomberg Brief, available to Bloomberg subscribers, which virtually the entire mainstream is, offers a weekly Sustainable Finance Brief. This vocabulary, “Sustainable Finance” is one that they are comfortable with. The September 1, 2016 brief opens with a quote from Mathieu Elshout, director of real estate investments at the second-largest Dutch pension fund. “Our pension is worth more in the future in a liveable [sic] world than in a non-sustainable world.

The stalwart of conventional investment standards, the CFA Institute, demonstrates that it does not differentiate. Our web search for articles on Corporate Social Responsibility (CSR) as it affects investment decision making finds 61 results, many of which contain headlines for Environmental, Social and Governance (ESG) articles or Socially Responsible Investing (SRI) articles, or even Impact Investing, indicating that they consider all to be a single concept. So why are there so many different titles for the approach? Has there been a progression? And should we support the splintering of names?

The current rather uninformed textbook story is that first came “socially responsible investing,” which was a simple divestment approach. Next came ESG investing, which looked for companies with stronger environmental or social stories, but was not actually making any difference in the world. Finally we have evolved to Impact Investing, which actually uses business to make the world a better place. I have absolutely no idea where this weird story line got its start. Those of us who were practitioners thirty years ago have had impact as our purpose throughout the period. We argued that only if investors allowed it, could companies be mindful of the double bottom line. Ergo, we must build an investor base that not only allowed focus on the complete scope of corporate activity but also insists upon it.

During my years with KLD Research & Analytics, we saw our mission as two-fold. Our job was to remove the barriers at the top and to build the demand at the grassroots. We therefore created an index of companies created with social and environmental standards. Though we did not use the ESG phrase, our inclusion of the investor as a stakeholder led us to consider all the issues that have more recently been mysteriously elevated to being deserving of a separate callout, Governance. (My personal preference is to stuff the investor back into the category of people and to stick with people and the planet as our core concerns.) That index did better than the S&P 500. In its new form, the MSCI/KLD 400, it still does better. The track record of the index did in fact move mountains; it undercut the performance-will-be-hurt argument. It made the approach legitimate and called into question the wisdom of Wall Street, too. How is it possible that removing companies from your universe can enhance your return? Is it possible that avoiding problem companies is a good way to make money?

In 1990, what was then called the Domini 400 Social Index was created to be a fixed number of companies (400), of which 250 (give or take) would also be members of the S&P 500. This explicit selection of the “better half” was a tactic to help define the better half. One hundred members of the index were non-S&P 500 companies chosen to increase exposure to industries that the responsible investor might invest in, but which were not amongst the better half of the S&P. For example, responsible investors might willingly own automobile companies, but the S&P automobile companies made weapons, so we sought other ways to gain exposure to that sector. The remaining 50 companies were chosen because they were arguably exemplars of corporate social responsibility. The construction of the index was largely completed during 1989. I can therefore say with certainty that everything ESG is now meant to convey was core to the SRI methodology. CSR, however, is not an investor strategy, but rather the outcome of what investors do. Wikipedia explains, “CSR strategies encourage the company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.” But should such strategies exist?

Economist Milton Friedman famously claimed, “a corporation’s responsibility is to make as much money for the stockholders as possible.” This is clearly an over-reach. Stockholders are ultimately human beings. Human beings have many needs and desires. We do not want the pursuit of profits for the person we are when we own a stock to damage the person we are when we breath the air. As investors, we push companies to deliver profits while also assuring that the air stays clean. Responsible corporations must not make money by damaging human life. Investors occupy a powerful position to assure this outcome; investors own the company. I contend that the impact of co-opting all corporations into responsible behavior is an impact of monumental scale, unimaginable without the socially responsible investor.

I return to the name game. What the responsible investment industry calls itself has become too much of a distraction. For all intents and purposes, Triple P (people, the planet, and profits) investing is ethical investing is ESG investing is Sustainable investing is SRI, etc. There are practitioners who ask clients to fill out a self-assessment on issue areas and attempt to tailor a portfolio to emphasize the individual disposition. I do not. My value proposition is this, “Do you believe that finance, that investments, have an important, even essential, role to play if corporations are to operate without destroying ecologies and crushing people?” If your answer to that question is yes, then you should invest with me.


Article by Amy L. Domini, CFA

Ms. Domini is widely recognized as the leading voice for socially responsible investing. Her passion for the field has led her to create three businesses and to write several books. She has been awarded acknowledgements of these efforts, including: Time magazine named her to the Time 100 list of the world’s most influential people in 2005. That year she also received a citation from President Bill Clinton for her work with the United Nations Foundation. In 2008, Ms. Domini was named to Directorship magazine’s Directorship 100, the magazine’s listing of the most influential people on corporate governance. In 2014, she was awarded the Founders Award by New Yorkers Against Gun Violence for her advertising campaign (which ran in The Nation), urging investors to divest guns from their portfolios.

She is the founder of Domini Social Investments (, a mutual fund company with $1.6 billion in assets under management. Ms. Domini is also founder of The Sustainability Group, which manages private client assets in Boston, MA. She has served on a number of boards, including the National Association of Community Development Loan Funds (now Opportunities Finance Network), an organization whose members work to create funds for grassroots economic development loans, and the Interfaith Center on Corporate Responsibility, the major coordinator of involved shareholders who file proxy resolutions.

She is a member of the Boston Security Analysts Society. Ms. Domini holds a B.A. in international and comparative studies from Boston University, and holds the Chartered Financial Analyst designation. In 2006, she was awarded an honorary Doctor of Business Administration degree from Northeastern University College of Law. Yale University’s Berkeley Divinity School presented Ms. Domini with an honorary doctorate in 2007.

Ms. Domini is the author of Socially Responsible Investing: Making a Difference and Making Money (Dearborn Trade, 2001) and The Challenges of Wealth (Dow Jones Irwin, 1988), and a coauthor of Investing for Good (Harper Collins, 1993), The Social Investment Almanac (Henry Holt, 1992), and Ethical Investing (Addison-Wesley, 1984). She contributes regularly to Optimist Magazine and the GreenMoney Journal. She lives in Cambridge, MA with her husband, Mike Thornton.

Transformation at the Crossroads: South Africa’s Lessons for Impact Investing

by Donna Katzin, executive director, Shared Interest


DonnaK+logoTwenty-two years ago, when apartheid fell, South Africa pointed the way from disinvesting to reinvesting in one of the landmark nonviolent social transformations of our time. A number of international investors decided then to put their money to work in building a more equitable South Africa. Today South Africa is the largest impact investment market on the African continent, with US $24 billion disbursed for impact investments by development financial institutions (DFIs), and US $4.9 billion by organizations other than DFIs.

Shared Interest, a non-profit investment fund established for this purpose in 1994, rode the wave of capital seeking to make a transformational impact in the new nation. We use our investors’ funds to partially guarantee loans to low-income black entrepreneurs and farmers by South and Southern African lenders who would otherwise consider them “unbankable.” Our impact has been significant, benefiting 2.3 million South Africans without losing a penny of our impact investors’ capital. In the process, we have found that as South Africa struggles with its unique history and challenges, it provides a wealth of lessons for impact investors world-wide about what works, what doesn’t, and what is possible. Here are a few.

Top image: Zanele Mkokeli, supervisor at the grape and citrus-growing worker cooperative, Rietkloof Farm

No Quick Fix

First, South Africa itself teaches the importance of long-term strategies, and the impossibility of a quick fix for severely distorted economies. The African National Congress was 82 years old by the time Nelson Mandela was elected President, and that was only the beginning of the country’s “long walk” to economic democracy – a process still in its infancy. Many of us have worked hard to help South Africa overcome its pariah status and become more like the rest of the world. Now it is. Ironically, this means that it is dogged not only by its own history, but also by the challenges of global markets and the rising inequality that all too often accompany the concentration of capital. The removal of deeply entrenched distortions that have historically barred black-owned businesses from the marketplace will require many years more. For impact investors, this means patient capital.

Multi-Pronged Approaches

It also means that economic transformation requires numerous complementary strategies, as did South Africa’s victory over apartheid. During the “struggle years” these included the initiatives of the country’s own liberation movements, civil society and domestic defiance campaign, as well as international boycotts, divestment, sanctions, shareholder resolutions and protests carried out around the world. Today, as then, profound change requires what we often describe as a new “ecosystem.” Reshaping what is still one of the world’s most unequal countries in terms of both income and wealth requires a variety of strategies and tools [1]. The goal is not simply launching X businesses or creating Y jobs, but reshaping an economy that will address the needs of all its people.

Shared Interest, for example, has found it essential to use a variety of strategies to ensure the success of its client enterprises and small farms, and move commercial lenders to serve them. While we use our impact investors’ funds to partially guarantee loans from local banks to black borrowers (typically) without collateral or credit histories, we ensure that the new entrepreneurs and farmers also receive technical assistance in launching, managing and scaling their businesses. Through our partners on the ground – notably the Thembani International Guarantee Fund – we provide support for commercial lenders in working with new clients – and creating products for markets they have historically sidelined.

Nkosi M.M. Mkwedini – chief of the Lambasi community, showing corn that has been harvested as part of the project.

Creative Collaborations

But the new “ecosystem” requires numerous other actors in the private and public sectors to create significant changes and opportunities – and fertile soil for impact investing. They are particularly necessary to jumpstart black-owned small and growing businesses and farms in South Africa, whose colonial structure was built on extractive industries and agribusiness – much of it on land forcibly taken from black South Africans. Moreover, blacks were legally barred from doing business in “white” areas – the most populous – under apartheid. Twenty years after Nelson Mandela was elected President, the Global Entrepreneurship Monitor (GEM) pegged South Africa’s entrepreneurial activity at 25 percent that of other Sub-Saharan African nations.

And so, to support the development of small and growing (and potentially investable) black-owned businesses, numerous enterprise incubators and accelerators have sprung up around the country. They include the University of Pretoria’s Gordon Institute of Business Science (GIBS), which prepares promising emerging enterprises to succeed and scale; and LifeCo, which assists and invests in social and environmental businesses. There is also a bumper crop of business development service (BDS) providers that support small enterprises, farms and cooperatives across the country.

Public Carrots and Sticks

Father and son, participating in the Omnia project.

The government is another key player. During the early days of majority rule, in the mid 1990’s, many expected the spirit of the new South Africa to move the private sector to play its part in transformation. But much more has been needed. It is still early days for government to establish a regulatory framework for impact investing, and organizations like the Aspen Network of Development Entrepreneurs (ANDE) are working to encourage such policies. Nonetheless, in agriculture, the state has implemented a number of strategies for change, such as its purchase of land from willing whites and giving it to black farmers – often in cooperatives. The authorities quickly discovered, however, that without technical support, many new farmers failed, and some ended up selling their land back to whites, defeating the purpose of the program. Moreover, without working capital, even the best-trained farmers cannot succeed. Shared Interest’s guarantees for working capital loans, together with technical support, have helped a number of cooperatives achieve excellent results.

Another government initiative has been the creation of codes of conduct for companies in different sectors to broaden the distribution of ownership and jobs, and to assist emerging black-owned enterprises. South Africa drew on its own history of corporate conduct codes encouraged by anti-apartheid advocates, and eventually by the companies themselves, through mechanisms like the Sullivan Principles. While motives behind the measures sparked debate, the codes did establish precedents.

Since 1994, the country has developed a complex system of sector charters and a system known as Broad-Based Black Economic Empowerment (B-BBEE). These codes use “scorecards” to evaluate measures that enhance benefits and opportunities for black shareholders, workers and suppliers. Government considers companies’ ratings when assigning contracts, using a preferential procurement strategy. The criteria now further apply to those companies which, in turn, sell to government suppliers. Companies are currently spending significant funds on this “carrot” for good behavior, according to Grant Thornton’s 2016 international business report. And the government is sharpening the provision’s “teeth” by establishing a B-BBEE Verification Regulator.

One of the engineers for the Westlands Civils CC – a black owned company working on road and civil works.

The measure is promising for the development of private sector collaborations that enhance companies’ strategies to purchase from and assist their small and growing suppliers and clients. Shared Interest’s client, One Vision, for example, benefits from its contract with one of the country’s largest retailers, Woolworth’s, which purchases all the vegetable chips One Vision produces. The contract, Shared Interest’s loan guarantee and Thembani’s technical support have helped the start-up company launch and create 63 jobs, making it one of the only employers in a rural community decimated by an earlier plant shut-down. Shared Interest is also working with the Omnia chemical company to bolster emerging farmers and their associations through a combination of guarantees, Omnia’s agricultural extension services, and additional mentoring. Thembani has helped structure a financial product that mitigates the risk of investors and the farmers themselves, who are developing their own self-insurance fund.

Addressing Problems at their Grassroots

Zanele Mkokeli, supervisor at the Rietkloof Farm, with her son.

In August, UN Women’s Executive Director (and South Africa’s former Deputy President) Phumzile Mlambo-Ngcuka provided a simple but profound insight: “If it doesn’t work for grassroots women, it probably doesn’t work.” Like effective development initiatives, impact investing will not help transform the ecosystem if it simply benefits large enterprises that do not better the lives and enhance the economic power of people at the bottom of the economic ladder – particularly women.

Numerous studies have found that investing in the creation of enterprises and opportunities for women provides the maximum benefit for low-income communities. The Small Enterprise Foundation, a typical high-functioning microfinance institution, has grown, with a combination of grant and guaranteed loans to benefit more than 140,000 black women and their families in deep rural areas of South Africa. A traditional rural community, Lambasi, is also achieving significant impact outcomes by using guaranteed loans and technical support to plant 1,000 hectares of maize and beans – benefiting a community of 8,000 members, in which the majority of the farmers are women.

A grape and citrus-growing worker cooperative on Rietkloof Farm, which has received the enterprise from the government, is using a guaranteed loan, as well as technical support from Thembani and a local BDS provider to expand the farm and make it profitable. Coop member Zanele Mkokeli described the significance of moving from day laborer to supervisor to cooperative member. Considering her economic security and options, she noted, “Now, for the first time, I can think about the future. I am one of the owners of this farm.”

Impactful International Partnerships for a New Time

Finally, as a virtual laboratory of international collaboration strategies for change, South Africa has important lessons to teach impact investors placing funds in other countries. Withdrawing investments to pressure a pariah state has been replaced by proactive investing. But the principle of using international capital to bolster the country’s own initiatives to improve its people’s lives remains the same. Those partnerships and investments that strengthen local stakeholders’ developmental initiatives create the greatest long-term impact. Shared Interest has opted for a model to move the country’s own commercial lenders to extend credit to emerging entrepreneurs and farmers. And it is working. Many other impact investors also ensure that their exits leave productive assets in the hands of people who have been excluded and exploited in the past. In the end, such catalytic and collaborative strategies produce the most profound and enduring impact. While approaches vary from community to community and country to country, South Africa’s powerful transformation mandate and international role are likely to provide an important mirror for impact investors for years to come.


Article by Donna Katzin, the founding executive director of Shared Interest (, a social investment fund that mobilizes the financial and human resources of South Africa’s lowest income communities of color. Since 1994, Shared Interest has helped to create more than 180,000 new small and micro-enterprises, 1.9 million jobs, and 120,000 affordable homes – benefiting 2.3 million economically marginalized South Africans – the majority of them women. The organization is now extending its work to other Southern African countries, including Swaziland, Mozambique and Zambia. Previously, she served as Director of South Africa and International Justice Programs for the Interfaith Center on Corporate Responsibility. She has been honored by the South-African-American Organization, received the North Star Fund’s Frederick Douglass Award, the South African Embassy’s Inaugural Friends of South Africa Siyabonga Award, the inaugural Ubuntu Award from Face2face Africa, and the SRI Service Award in 2015 at The SRI Conference on Sustainable, Responsible, Impact Investing.

In an unpaid capacity, she has also coordinated Tipitapa Partners, a people-to-people project that began 29 years ago with a sister city relationship between the Upper West Side of New York and Tipitapa, Nicaragua. Throughout this time the partnership has empowered local Nicaraguan women and their communities to uphold their children’s rights to food and education, and supported their efforts to sustain early childhood nutrition and education centers.

A board member of the Thembani International Guarantee Fund in South Africa, and the Center for Community Change in the U.S., Ms. Katzin holds a master’s degree in Community Organization and Planning, and a doctorate in Human Services Education and Development. She has written extensively about South Africa, community development and impact investing, and is also the author of With These Hands, a volume of poetry inspired by the birth of South Africa’s democracy.

Article Note:

[1] Anna Orthofer, “Wealth Inequality – Striking New Insights from Tax Data,” July 2016,

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