Tag: Food & Farming

Hypatia Announces Launch of Exchange Traded Fund – Hypatia Women CEO ETF

By Hypatia Capital,

Hypatia Capital Management LLC announced the launch of a new exchange traded fund yesterday, the Hypatia Women CEO ETF (NYSE: WCEO). Hypatia Women CEO ETF (the “Fund”) seeks to provide capital appreciation. There is no guarantee that the Fund will meet its investment objective.

The fund is a series of the Two Roads Shared Trust by Ultimus. Larie Lydick, Vice President of ETF Product at Ultimus, commented on participating in the fund launch. “It was an honor to work with Patricia and the Hypatia team to help launch their new innovative ETF which invests in large women-led companies. I’m glad that the Hypatia team was able to leverage Ultimus’ deep industry knowledge and introductions to the ecosystem to quickly go to market by launching the fund in one of our series trusts. They also took advantage of our Distribution Advantage program, led by Kevin Guerette, to understand the distribution landscape for their ETF. I look forward to working with the Hypatia team and their continued success.”

Vident Investment Advisory will serve as sub-adviser to the Hypatia Women CEO ETF. “We are delighted to partner with Hypatia Capital on this first-of-its-kind strategy that seeks to provide exposure to female CEOs,” said Amrita Nandakumar, President of Vident Investment Advisory.

“We believe investors are increasingly interested in the research that highlights the performance of female leadership. We are excited to launch the Hypatia Women CEO ETF to offer investors the chance to potentially diversify their portfolio from a gender perspective, invest their values, and use their investment dollars to create impact,” said Patricia Lizarraga, founder and managing partner of Hypatia Capital.

Investors can learn more about the Hypatia Women CEO ETF by visiting www.wceoetf.com

 

About Hypatia Capital

Hypatia Capital Management LLC is part of the Hypatia Capital Group, founded in 2007, and is an asset management firm focused on female CEOs and balanced management teams.

Hypatia Capital’s CEO-level female executive network includes over 1000 business leaders. For over a decade, Hypatia Capital has hosted the Private Equity CEO Roadmap Seminar, focused on providing the knowledge and contacts for senior female executives to navigate the private equity environment.

Hypatia Capital, through Hypatia Invests focuses on educating the general public on female focused investing opportunities in all asset classes.

Please visit www.wceoetf.com for more information.

About Ultimus

Ultimus Fund Solutions is a leading provider of full-service fund administration, accounting, middle office, and investor solutions to support the launching and servicing of registered funds, private funds, and public plans. The company offers customized structures designed for the unique needs of pensions, endowments, foundations, and other large institutions. Ultimus’ deep commitment to excellence is achieved through investments in best-in-class technology, compliance programs, organization-wide cyber security efforts, and hiring seasoned professionals.

Headquartered in Cincinnati, Ohio with offices in other major cities such as Chicago, New York, Philadelphia, and Boston, Ultimus employs more than 925 seasoned accountants, attorneys, paralegals, application developers, fund administrators, compliance specialists, and many others with years of experience in the financial services industry. Servicing over 1,600 total traditional and alternative funds, Ultimus helps investment managers and fund families flourish in today’s increasingly sophisticated and dynamic investment landscape. For more information, visit www.ultimusfundsolutions.com

About Vident Investment Advisory (VIA)

Vident Investment Advisory (VIA), a subsidiary of Vident Financial formed in 2014, provides asset management and sub-advisory services to sponsors of index and active investment strategies. The firm offers a comprehensive suite of portfolio management, trading, operations, and capital markets functional expertise. VIA’s extensive knowledge and innovation for a variety of ETF sponsors has made ETF management VIA’s specialty. VIA’s capabilities extend across multiple asset classes, including U.S. and international equities, fixed income, and commodities, as well as long/short, inverse, managed futures, and crypto futures strategies. For more information, please go to www.videntinvestmentadvisory.com.

Investors should carefully consider the investment objectives, risks, and charges and expenses of the fund before investing. The prospectus contains this and other information about the fund, and it should be read carefully before investing. Investors may obtain a copy of the prospectus by calling 1-888-338-3166 or clicking the link above. The fund is distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC, which is not affiliated with Hypatia Capital Management LLC nor affiliated with Vident Investment Advisory.

Important Risk Information:

Exchange-traded funds involve risk including the possible loss of principal. Past performance does not guarantee future results.

The Adviser invests in securities only if they meet both the Fund’s investment and values-based screening requirements, and as such, the returns may be lower than if the Adviser made decisions based solely on investment considerations.

The Fund faces numerous market trading risks, including the potential lack of an active market for Fund sharers, losses from trading in secondary markets, and periods of high volatility and disruption in the creation/redemption process of the Fund. These factors may lead to the Fund’s shares trading at a premium or discount to NAV.

The Fund is a new ETF and has a limited history of operations for investors to evaluate. The Adviser has not previously managed a mutual fund or an ETF.

16256589-NLD-01092023

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

Natural capital earns investor interest

By Grant Harrison, GreenFin / GreenBiz Group

The practical upshot: There is no path to decarbonization without major investments in natural capital.

This article is an excerpt from GreenBiz Group’s 16th annual State of Green Business, which explores sustainable business trends to watch in 2023. Download the report here.

 

In economic terms, climate change is the result of a massive externality: an unpriced element in the production, consumption and transportation of goods and services. Fossil fuels are a primary ingredient in the eye-popping economic growth of the past two centuries, but the cost of burning them wasn’t originally factored into the equation.

Increasingly, that’s changing.

Institutional investors across the globe are taking stock of natural capital, which national economies and investors have historically neglected.

Investing in natural capital — the value extracted from soil, air, water, climate and all the living things and ecosystem services that make the economy possible — has long made environmental sense. Examples include advancing sustainable hydroponics, beef alternatives, biodegradable consumer products or degraded land restoration.

But investors are increasingly seeing the economic rationale, too. The World Economic Forum estimates that protecting nature and protecting biodiversity could generate $10 trillion annually in business opportunities, from farming to fashion to finance, creating nearly 400 million new jobs.

The question is how, exactly, all this happens. The year ahead could provide some answers.

A key stepping stone is the ongoing development of the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), due in fall 2023. The TNFD framework is meant to bridge the information gap that exists between financial institutions and companies — in this case, providing the information needed to understand how nature-related risks impact financial performance.

The International Finance Corporation’s (IFC) Biodiversity Finance Reference Guide, launched in 2022, which builds on the International Capital Market Association’s green bond and green loan principles, launched in 2014 and 2018 respectively, also serves as a key stepping stone.

“The World Economic Forum estimates that protecting nature and protecting biodiversity could generate $10 trillion annually in business opportunities, from farming to fashion to finance, creating nearly 400 million new jobs.”

The IFC’s guide provides investors an overview of the types of investments that support natural capital. It is one of several organizations and collaborations working globally on some aspect of valuing nature for companies, including the Capitals Coalition, the Natural Capital Investment Alliance and the United Nations Environment Programme Finance Initiative.

So where’s the money?

In 2020, the OECD estimated biodiversity finance from all sources to total between $78 billion and $91 billion per year.

And as of this writing, the largest investment strategy with a healthy ecosystems theme was the nearly half-billion-dollar-and-growing Fidelity Select Environment and Alternative Energy fund (FSLEX), although similar funds are poised to expand greatly across North America, EMEA and APAC throughout the coming year.

As major investment firm leadership at the likes of Schroder’s, Aviva and RobecoSAM have become vocal about the role biodiversity plays in their funds’ strategies and holdings, it’s safe to expect some of the billions invested with a dual mandate on climate — that is, simultaneously seeking returns and climate impact — will increasingly be informed by biodiversity mandates, too.

That the financial sector has begun to realize that nature’s economic value is wholly dependent on a healthy climate may sound eye roll-worthy to some in the climate community, but this fact says more about the financial system’s lack of consideration for the value of natural resources than it does a lack of investor ambition. Regardless, the estimated $10 trillion dollar investment opportunity is likely to become a focusing factor.

The practical upshot: There is no path to decarbonization without major investments in natural capital. If the climate crisis truly is the largest investment opportunity in a generation, investing in natural capital is destined to become core to that opportunity.

 

Article by Grant Harrison, GreenFin, GreenBiz Group

As Green Finance & ESG Analyst, Grant leads on program development for GreenFin – the premier ESG event aligning the sustainability, investment and finance communities. Grant works to direct the vigor of capital markets toward the realization of a clean and just economy, and to make GreenFin the launchpad of the ideas, insights and connections that will shift capital allocation to support sustainability.

Grant previously served as Senior Account Executive with GreenBiz, working with clients across financial services, transportation, tech and consulting. Prior to joining GreenBiz, Grant worked under the auspices of the USDA implementing reforestation projects in fire-affected regions of Northern California. Grant holds a bachelor’s degree in American Studies from UC Berkeley and a master’s degree in Environmental Governance from Oxford University. He is animated by a healthy diet of existential anxiety and an enduring faith in humans’ ability to solve problems together. Grant loves, more than most things, to surf.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

Six ESG and Climate Trends to Watch for 2023

By Meggin Thwing Eastman, MSCI

Above: Jurisdictions with active and proposed regulations or guidelines for ESG funds – Solid text boxes represent regulations in force, while dashed boxes represent proposed or planned regulations. List of jurisdictions with regulations or guidelines proposed or in force for ESG funds: U.S. (proposed); Canada; EU; U.K. (planned); Singapore; India (proposed); Hong Kong; Australia (including Section 1013DA); Malaysia; New Zealand; Philippines (proposed); Thailand (proposed); Taiwan. Data as of Oct. 12, 2022. Source: MSCI ESG Research.

 

  • A swiftly changing geopolitical and macroeconomic backdrop has shifted the ESG and climate landscape at a rapid pace, making it imperative that investors understand the challenges and opportunities that companies face.
  • Climate remains at the top of the ESG agenda, with regulators increasingly conscious of the role they need to play alongside governments in ensuring companies and countries meet their climate-related obligations.
  • Beyond climate, ESG is increasingly affecting many other areas, including impacts on everyday life. This year, we have drilled down to bring these detailed insights to you and help inspire some fresh thinking.

The last year has seen a seismic shift in the ESG and climate landscape. Regulators are upping the ante on everything from greenwashing to stricter climate target disclosures, while the war in Ukraine, disruptions in the energy market, rising interest rates and soaring inflation have all combined to produce a global cost-of-living crisis and renewed geopolitical and macro uncertainty. Add to the mix a spate of climate-induced disasters and the increased politicization of ESG investing, and it’s easy to see why investors have tended to tread cautiously as they seek to understand companies’ challenges and opportunities.

In MSCI’s ESG and Climate Trends to Watch for 2023 we discuss the key topics investors face, from climate change, the environment and the road to net-zero, through to regulatory requirements, supply chain innovations, biodiversity and new technologies, as well as issues affecting everyday life.

Here, we briefly touch on six of the 32 trends that we have identified.

 

Networks and renewables cominate capex plans of major US and Europe utilities - MSCI
Data for 26 European and U.S.-based power-generating constituents of the MSCI ACWI Index, as of Aug. 5, 2022. Definitions of capital expenditures are based on MSCI’s ESG climate-change metrics. Source: MSCI ESG Research.

1. Energy crisis, Ukraine war driving fossil fuel agenda, but don’t rule out renewables

The ongoing war in Ukraine and high-inflationary environment may limit near-term pressure to reduce global greenhouse-gas emissions as governments prioritize energy security and affordability. But for power companies, swapping coal and oil for natural gas may not be the only practical option.

In 2023, we’ll be watching which companies are keeping their eyes on longer-term decarbonization trends and expanding their deployment of renewables.

 

 

2. Market conditions could test investors’ commitment to say-on-climate voting

According to our analysis, more investors voted against corporate climate strategies in 2022 compared to 2021, especially where a company’s emissions trajectory was misaligned with global temperature targets. However, energy market turmoil and a focus on energy security may change voting behavior.1

In 2023, we’ll be watching whether opposition to corporate climate strategies will continue or whether more investors will give companies the benefit of the doubt on their climate plans in challenging market conditions.

Companies emissions trajectories and 2022 climate votes - MSCI
Analysis covers all 43 constituents of the MSCI ACWI Investable Market Index (IMI) that held management-sponsored say-on-climate votes in 2022 to date. The percentage of votes against accounts for votes in favor and votes withheld/abstained. Data as of Nov. 9, 2022. Source: MSCI ESG Research and company disclosures.

 

3. Regulators turn their gaze to ESG funds

ESG-oriented funds have long operated with limited regulatory guidance.2 But regulatory interest in fund names and funds’ classification and disclosure obligations are ramping up globally. Spearheaded by the EU’s Sustainable Finance Disclosure Regulation, which imposes requirements on more transparent reporting for ESG funds, other major market regulators are following suit.

In 2023, we’ll be watching for changes in ESG fund names and labels as unfolding disclosure regimes hold managers to stricter account.

 

4. Cutting deforestation: Market restrictions get real

Despite commitments to halt forest loss,3 2021 saw tree-cover loss of 25.3 million hectares globally, an area larger than Great Britain.4 In addition, 2022 saw global wildfires burn down millions of hectares more. COP155 addressed such natural losses, while the European Parliament recently introduced legislation requiring products sold in the EU to be deforestation-free.

In 2023, we’ll be watching which companies exposed to deforestation can improve due diligence and supply-chain monitoring as they seek to maintain access to key markets.

Paper and forest products companies lead, but deforestration policies thin - MSCI
Share of companies within selected industries of the MSCI ACWI IMI that have disclosed a deforestation policy; industries included where at least 2% of the peers have disclosed a policy. Data as of Oct. 12, 2022. Source: MSCI ESG Research.

 

5. Mining old electronics to fuel new energy tech

In recent years, China and the EU have strengthened policies and guidelines on the circular treatment of materials and waste, including electronic waste (e-waste). In September 2022, the U.S. followed suit, passing a bill on recycling electric-vehicle batteries. Efficiently extracting metals from e-waste could reduce dependency on mining and emissions.

In 2023, we’ll be watching which companies up their efforts to mine secondary metals from e-waste — both to keep regulators happy and boost access to metals critical for clean-energy technologies.

A long way off from a circular economy for metal - MSCI
Analysis includes 68 technology-hardware and household-durable constituents of the MSCI ACWI Index, as of Sept. 27, 2022. Based on the public disclosure of these companies (e.g., annual reports and 10-Ks), we analyzed the differences in the reporting of e-waste collection and recycling metrics, as well as any targets related to these collection and recycling efforts. Source: MSCI ESG Research.

 

6. Cotton’s crunch point and the future of fiber

Cotton makes over 25% of the clothes we wear, but its harmful impacts, like soil degradation and water consumption, have spurred demand for more environmentally friendly options.6 Apparel retailers have responded by working with third-party certifiers for sustainable cotton and exploring alternatives. However, catastrophic flooding in Pakistan and the withdrawal of some certifications from China have created supply issues.

In 2023, we’ll be watching to see which retailers can navigate these near-term shortages and which ones are prepared to back new, alternative fibers.

Apparel retailers relied on third-party certification for responsible cotton - MSCI
Data is based on apparel-retail constituents of the MSCI ACWI Index, as of Oct. 21, 2022. Source: Refinitiv, MSCI ESG Research.

 

Understanding the impact of ESG and climate

For investors, considering ESG and climate factors is not a new concept, but it is one that is likely to become even more important given increased regulation, demands for transparency and an ongoing quest for standards. The trends identified here, and in our wider publication, are already shaping society and hint at the risks and opportunities that companies and investors may face in the years ahead. Understanding them will be a first step in assessing the potential impact they could have on investment portfolios.

 

Article by Meggin Thwing Eastman, MSCI

Footnotes:
[1] Masters, Brooke. “Shareholders back away from green petitions in US proxy voting season.” Financial Times, July 1, 2022.
[2] ESG funds are defined as any fund that employs any ESG considerations in its security-selection process (values and screening/ranking/exclusions/integration/optimization, etc., and their combinations). In simplest terms, it is the widest possible net under which any and all funds employing any ESG considerations in security selection are captured. All fund characterizations based on data from Broadridge and MSCI ESG Research, as of July 2022.
[3] “Glasgow Leaders’ Declaration on Forests and Land Use.” UN Climate Change Conference UK 2021, Nov. 2, 2021.
[4] University of Maryland and World Resources Institute. “Global Primary Forest Loss.” Accessed Oct. 12, 2022.
[5] The 15th Conference of the Parties to the Convention on Biological Diversity in Montreal, Canada, commonly abbreviated as COP15 (Dec. 7 to 19, 2022.)
[6] In 2021, companies in the apparel-retail sub-industry with combined revenues of over USD 100 billion were sourcing cotton certified to a third-party standard. This reflects revenue from eight out of 12 constituents of the MSCI ACWI Index in the apparel-retail sub-industry that report sourcing third-party certified cotton. Apparel-retail sub-industry defined according to the Global Industry Classification Standard (GICS®). GICS is the global industry classification standard jointly developed by MSCI and S&P Global Market Intelligence.

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Upcoming Regulations in ESG Ratings: Three Implications for Business

By Ellinor Haggebrink, BSR

Key Points

  • ESG assets may hit US$53 trillion by 2025, a third of global assets under management (AUM).
  • There are increasing concerns over greenwashing, the reliability of these ratings, and how well they reflect a company’s commitment to ESG.
  • Upcoming regulations are a win-win for both rated companies and rating agencies.

The field of ESG ratings is in a phase of rapid growth—as of today, it is estimated that there are 150 different ESG data providers in the market, and these figures are expected to grow with continued consideration from investors. The estimated scale of ESG-related assets under management (AUM) is predicted to reach US$53 trillion by 2025, equivalent to a third of all global investments.

This fast-paced development is due to an increasing regulatory focus on ESG in potential investments with the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR), together with more sophisticated demand from investors for products that shift society to a greener economy and help mitigate climate change. These two drivers are only likely to increase in intensity over the coming years, leading to ESG ratings taking on a key role in the ecosystem of sustainable finance.

However, with increased influence comes increased scrutiny, and the rapid development of this industry has rendered vocal criticism. This often points to the lack of common standards, as there is no unified definition of what “ESG” should be measuring. Instead, different ESG raters provide indicators on different aspects of sustainability, and applied methodologies vary.

ESG raters often find varying conclusions, despite access to the same information, and on average, the correlation between the leading providers’ scoring of the same company can be as low as 0.54. In comparison to the regulated field of credit ratings, where correlation is close to 0.99, this stands out. Consequently, the market receives mixed signals about ESG performance, and business, in turn, gets mixed messages about what steps to take to improve their scores. Plus, there is often limited transparency around underlying methodologies due to confidentiality, which makes it difficult for companies to understand the criteria used to assess them.

All these factors have created legitimate concerns over greenwashing, questioning the reliability of these ratings and how well they reflect a company’s commitment to ESG. Consequently, voices have started to call for regulations in the industry. There is a need for more standardization, to calibrate the market so that actors are more aligned with the help of regulatory initiatives.

In 2022, Japan’s Financial Services Agency released a Code of Conduct for ESG rating and data providers. This is the first of its kind being issued by a national regulator, consisting of six principles covering transparency around methodologies and data sources, with a comply-or-explain approach. Emerging trends are starting to move in other parts of the world—for instance, the UK government has established a working group for a voluntary best practice code for ESG raters, looking to bring them within the scope of the Financial Conduct Authority. Similarly, the European Commission expects to issue regulation to monitor the reliability and transparency of ESG ratings in 2023, as part of the European Green Deal.

Regulations seem to soon be the new reality for ESG rating agencies. But what are the implications for business? Is this good news?

  • Common language: Despite being rolled out in different global jurisdictions, regulatory frameworks in the making all strive for alignment of terms used in ESG ratings to enable common understanding across the industry. A cohesive terminology adopted by policymakers and regulators creates increased consistency for issuers and a chance to streamline sustainability efforts and related public disclosure.
  • Increased transparency: There is an increased demand for an improved understanding of how ESG raters arrive at their scorings, and upcoming regulations all promote more transparency around methodologies, data gathering, and the weight of certain metrics to assess ESG performance. Better insight into the rating criteria enhances issuers’ understanding of what it takes to improve their scores, target selected areas, and come out stronger in the next assessment.
  • Less greenwashing: One of the main objectives of regulating the ESG ratings field is to crack down on greenwashing and avoid (sometimes unintentional) misleading claims on ESG performance. Improved transparency of rating objectives and methodologies makes it more difficult for issuers to inflate their sustainability credentials, especially when overseen by a regulatory body. This puts increased pressure on companies to prevent exaggeration and instead back up their sustainability claims with hard evidence.

While upcoming regulations will serve to make life easier for rated companies, it is a double-edged sword, as it simultaneously raises expectations to deliver on sustainability commitments. But at the end of the day, this is good news for everyone. ESG ratings play an important part in supporting the sustainable investing landscape and are here to stay; seeking a more harmonized and transparent system and eradicating claims for greenwashing will help create trust in this industry.

This is a win-win not only for rated companies and investors subscribing to the ratings, but also for the ESG raters themselves.

 

Article by Ellinor Haggebrink, manager, BSR

Ellinor supports BSR’s sustainability work across industries with a focus on ESG investments, advising financial institutions and their clients on how to integrate sustainability strategies into investment decisions and corporate management. Ellinor brings with her 10 years of experience from the responsible investment field, engaging companies on behalf of institutional investors to improve ESG management on a variety of topics. Prior to joining BSR, Ellinor worked at Sustainalytics, leading engagement projects on sustainable seafood and sustainable agriculture. She also previously worked at GES International ,focusing on strengthening ESG management in emerging markets investments.

Ellinor holds a Master’s in Political Science and a BA in Spanish from Lund University, Sweden. A Swedish native, she also speaks English, Danish, and Spanish.

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Biodiversity Finance Guide Offers Investors a Blueprint to Protect Nature

IFC recently issued the world’s first guidance to help investors, financiers, companies, and governments identify investments that protect and rehabilitate biodiversity and ecosystems.

The Biodiversity Finance Reference Guide is the first market framework for biodiversity finance, a fast-growing domain of green finance that aims to support activities that conserve and restore biodiversity and ecosystem services.

While the market has increasingly expressed interest in these types of investments, it has lacked criteria for eligible projects. IFC’s guide addresses this gap by providing an indicative list of investment projects, activities, and components that help protect, maintain, and enhance biodiversity and ecosystem services, as well as promote sustainable management of natural resources.

“Protecting and restoring biodiversity and ecosystems is critical to ensuring sustainable economic growth,” said Makhtar Diop, IFC’s Managing Director.

“It is also a key component of our response to climate change mitigation, resilience, and adaptation. The private sector has a central role to play in these efforts. This guide is a compass for businesses and investors seeking to align their activities with the goals of sustainable growth and a healthy planet.”

The Guide builds on IFC’s experience in setting global standards for green bonds and blue finance, and enumerates specific activities that positively contribute to biodiversity.

Among other recommendations, it advocates addressing certain infrastructure needs with nature-based rather than manmade solutions, such as constructing mangroves, wetlands, green roofs, and raingardens. This approach offers a cost-effective way of building resilience and adapting to the physical impacts of climate change and contributes toward emissions reductions to meet the goals of the Paris Agreement.

More than half of the world’s GDP is generated in industries that depend on nature and its services. Yet economic activity has resulted in dramatic disappearance of species, with some 70% of biodiversity being lost in the last 50 years. This degradation of natural foundations presents a risk to livelihoods, health, economies, and achieving climate goals.

Nature-smart investments are particularly important in emerging markets, where economies have a particular reliance on natural capital and stand to bear the brunt of economic damages from biodiversity loss.

IFC partnered with the Wildlife Conservation Society for an external expert review of the Guide. The Guide also benefited from inputs from the public and private sector, academia, international organizations, civil society representatives, and individuals during a public comment period.

The publication will continue to evolve as the market for biodiversity finance develops and matures.

 

About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

Calvert Impact Releases its 2022 Impact Report: The Need for Transformative Change

Above – Calvert Impact portfolio partner Clearinghouse CDFI is a full-service, direct lender addressing unmet needs throughout the US. Their loans help organizations like Paul Quinn College (PQC). PQC is one of 102 historically black colleges and universities (HBCUs) in the US. Originally founded in 1872 to educate former slaves and their children, today PQC proudly educates students of all races and socioeconomic classes. PQC offers paid jobs for every student, as well as reduced student tuition and fees, allowing students to graduate with less than $10,000 in student loan debt.

Annual report details impact of Calvert Impact’s investments over the past year

Calvert Impact 2022 Impact ReportCalvert Impact recently announced the publication of its 2022 Impact Report: Responding to the Need for Transformative Change. The report showcases Calvert Impact’s portfolio partners’ work in communities around the globe and the impact of its investors’ capital. It also highlights key internal trends, with particularly noteworthy increases in Calvert Impact’s climate and small business portfolios.

“This report is a celebration of our investors and portfolio partners’ remarkable work and demonstration of what’s possible,” said Calvert Impact President and CEO Jennifer Pryce. “It’s inspiring to see the breadth and depth of impact that our investors help make possible.”

In the last year, Calvert Impact’s capital served more than 144 million individuals and 4.1 million small businesses across the US and in over 100 countries. They made $268 million in loans and investments into organizations that disbursed nearly $7 billion into communities over 2021.

The report demonstrates Calvert Impact’s commitment to fighting climate change, noting that their climate-focused investments have grown over 380% over the last five years and accounted for 42% of total disbursed capital. The number of small and medium enterprises financed also increased substantially, with 414% growth from last year, reflecting Calvert Impact’s dedication to supporting small businesses around the world. The jobs created and/or retained by their portfolio partners grew by 30%.

The report also shares the organization’s focus — in both its portfolio and staff — on gender and racial equity as part of its efforts to address structural inequities and covers Calvert Impact’s recent corporate expansion.

Pryce noted that the organization is dedicated to constant iteration and improvement is “core to the character of Calvert Impact,” stating in her CEO letter, “We remain committed to showing a different world is possible.”

Additional information about the Impact Report can be found here.

 

About Calvert Impact Capital
Calvert Impact is a global nonprofit investment firm that helps investors and financial professionals invest in solutions that people and the planet need. During its 25+ year history, Calvert Impact has mobilized over $4 billion to grow local community and green finance organizations through its flagship Community Investment Note™ and structuring services. Calvert Impact uses its unique position to bring the capital markets and communities closer together. More at calvertimpact.org.

Calvert Impact Capital, Inc., a 501(c)(3) nonprofit and a subsidiary of Calvert Impact, Inc., offers the Community Investment Note®, which is subject to certain risks, is not a mutual fund, is not FDIC or SIPC insured, and should not be confused with any Calvert Research and Management-sponsored investment product. Any decision to invest in these securities through this site should only be made after reading the 
prospectus or by calling 800.248.0337.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

Just Good Investing: Our Gender Lens Investing Journey

By Jenn Pryce, Calvert Impact

Calvert Impact Portfolio Partner Greenline Ventures and Small Business Capital Fund Investee Voormi. Greenline Ventures Small Business Capital Fund I (SBCF) provide attractive loans at favorable or better-than market-rates to underserved small businesses in distressed census tracts throughout the U.S. Objectives include job creation and retention, worker training, improving employee benefits, boosting minority or women owned businesses, reducing environmental impacts and assisting low-income workers. Find more information below. Photo courtesy of Voormi.

 

Women’s History Month is a celebration of women’s contributions to history, culture and society and has been observed annually in the month of March in the United States since 1987.

Jenn Pryce Calvert Impact - GreenMoneyThe upcoming 2023 Women’s History Month theme is “Celebrating Women Who Tell Our Stories.” This theme recognizes “women, past and present, who have been active in all forms of media.” It is not often that women in finance are invited to tell their stories, here is mine, the story of Calvert Impact’s journey into gender lens investing.

Calvert Impact has invested in women since our founding nearly 30 years ago. As an investment firm dedicated to investing in solutions that people and planet need, we helped grow the microfinance and community development financial industries, both of which are important sources of capital for female entrepreneurs. Ten years ago, we began experimenting with a more formal approach to investing in women. On International Women’s Day in 2012, Calvert Impact launched our first strategic initiative focused on empowering women, the Women Investing in Women Initiative (WIN-WIN). The goal of this initiative was to move from the dialogue of ‘why’ investing in women was important to actually putting capital to work. We sourced potential deals for gender impact and inclusiveness and created specific metrics to track our progress. We built a diverse global portfolio, from affordable housing in Texas to off-grid solar solutions in Tanzania. While the successes of WIN-WIN were numerous – nearly 900 investors channeled capital into projects that benefited over 20 thousand women and their families – some of the most valuable outcomes for us were the lessons learned from this endeavor.

As we analyzed the data from this diverse, global portfolio, it became clear that to understand our impact over time, we needed to take a sector and region-focused approach. Energy was the first sector we explored deeply with a gender lens. Access to clean, reliable energy led to positive impacts in health, education, and economic status. We chose this sector both for its level of maturation, needing patient debt capital to scale, and the outsized impact that access to clean energy has on women. Women make up 50 percent of the global population, but account for almost 75 percent of those living in energy poverty. Access to clean energy can improve women’s health by reducing indoor air pollution, and it can improve their economic situation by allowing more time in the evenings for productive activities like education and managing businesses. And while women were often the primary beneficiaries of access to clean energy, that impact didn’t always show up in the data because in many countries and contexts they were not the customers on paper as men often made the final decision to purchase and signed the contract.

responsibilityAbility Access to Clean Power Fund - courtesy of Calvert Impact
Calvert Impact Portfolio Partner responsAbility Access To Clean Power Fund Investee d.Light. responsAbility’s Access to Clean Power Fund is a private debt fund that seeks to address the lack of access to clean power globally, with a strong focus on Sub-Saharan Africa and South and Southeast Asia. The Fund targets companies that provide solutions to households without access to electricity and to businesses looking for cleaner, cheaper and more reliable energy. Beyond the financing of the dynamic off-grid energy sector, the Fund will also actively address the solar potential for the commercial and industrial (C&I) sector. Find more information below. Photo courtesy of d.Light

In 2014, as a part of our second phase of WIN-WIN, we committed to investing another $20 million in organizations that work specifically in providing access to clean energy for women. Throughout this work, it became clear that gender is not a standalone issue, but one that overlaps and affects others. It is not an impact element that can or should be isolated, but an aspect of all investments in every sector, whether we acknowledge it or not.

Today Calvert Impact considers gender across all our investments and our gender lens investment strategy is both wide and deep. Wide in the sense that we collect gender-specific metrics for all our investments to understand gender dynamics across our multi-sector portfolio—and deep in each sector to understand where the need for our capital intersects with the potential to make a difference in women’s lives at scale.

Our partners include groups like Grameen America, a nonprofit microfinance organization dedicated to helping women who live in poverty build small businesses to create better lives for their families, that are explicitly dedicated to serving women. As well as groups like SunFunder, a solar finance business that directly impacts the lives of girls and women by providing energy access to households across Sub-Saharan Africa and Asia that has embedded gender into their investment process through credit appraisals and monitoring as well as internal operations.

Accion Opportunity Fund investee Lia Hirtz - World Empanadas courtesy of Calvert Impact
Calvert Impact portfolio Partner Accion Opportunity Fund Investee Lia Hirtz, owner of World Empanadas. Accion Opportunity Fund (AOF) works to create an inclusive, healthy financial system that supports the nation’s small business owners by connecting entrepreneurs to affordable capital, educational resources, coaching, and networks. Through innovative partnerships and outreach strategies, they reach entrepreneurs of color, underfunded entrepreneurs, and women, who often lack access to the financial services they need to build and grow their businesses. For over 25 years, AOF has served a client base that is nearly 90% women, people of color, or immigrants. Find more information below. Photo courtesy of World Empanadas

We use gender as a lever and a lens: a lens to see risk and opportunity more clearly and as a lever to pull for greater impact. Gender is nuanced and contextual; there is no one way to incorporate gender into a strategy and our borrowers’ diverse approaches demonstrate this. We’re proud to work with our borrowers to introduce, improve, and enhance their gender strategies.

Gender equity is not just good for women – it’s good for investment, good for business, and good for society. In short – it’s good for us all. Ultimately, gender equity is not only an important impact goal as highlighted by Sustainable Development Goal 5, but a critical tool that has the potential to make all of us better investors.

Our challenge now is to ensure that more investors use it. We’ve published two guides to gender lens investing to help investors start incorporating gender into their investment processes – Just Good Investing: Why gender matters to your portfolio and what you can do about it, and Gender Lens Investing: Legal Perspectives. And we plan on doing more. We hope that this article serves as further inspiration to other investors and as always, our door is open to any who have questions.

 

Article by Jennifer Pryce, President and CEO of Calvert Impact. For 25+ years, Calvert Impact has strived to make markets work for more people, more often, by investing in communities overlooked by traditional finance. Calvert Impact invests globally across a range of sectors including affordable housing, environmental sustainability, microfinance, renewable energy, small business, and more.

Over the past decade, Jenn has lead Calvert Impact with a focus on innovation, sustainability, and scale. The work of Calvert Impact includes direct lending and investing, arranging, syndicating, advising, and developing new investment products. Calvert Impact is committed to ensuring impact investing is accessible to all investors, large and small, having worked with over 20,000 individuals, institutions, and advisors to raise more than $4.0 billion since their founding.

Jenn began her career in the Peace Corps in Gabon, worked as an equity analyst at NeubergerBerman, on the investment banking team at Morgan Stanley’s London office, and was a Director at the Nonprofit Finance Fund. She studied engineering at Union College and holds an MBA from Columbia University. Jenn currently serves as a Forbes contributor, a lecturer at Oxford Saïd School of Business and sits on various boards, including the UNICEF Impact Investing Fund.

 

IMAGES:

(Top) from Calvert Impact Portfolio Partner Greenline Ventures and Small Business Capital Fund Investee Voormi. Greenline Ventures Small Business Capital Fund I (SBCF) provide attractive loans at favorable or better-than market-rates to underserved small businesses in distressed census tracts throughout the U.S. Objectives include job creation and retention, worker training, improving employee benefits, boosting minority or women owned businesses, reducing environmental impacts and assisting low-income workers. Voormi is a high-performance, natural fiber based active apparel brand located in Pagosa Springs, CO, a mountain town of less than 2,000 people. Their goal is to create sustainable products that are built to endure hard conditions, are durable, support the local community, and deliver its goods without the need of thousands of gallons of oil and gas to get there. They also strive to transform rural communities into small manufacturing hubs providing economic development where it is needed most. As a result of the financing from SBCF, Voormi projects they will create 3 new positions in the local community. All jobs will include benefits and do not require a 4-year degree. In addition, Voormi will provide training to low-income workers for high paying “technical seamstress” jobs.
Image from Portfolio Partner responsAbility Access To Clean Power Fund Investee D. Light. responsAbility’s Access to Clean Power Fund is a private debt fund that seeks to address the lack of access to clean power globally, with a strong focus on Sub-Saharan Africa and South and Southeast Asia. The Fund targets companies that provide solutions to households without access to electricity and to businesses looking for cleaner, cheaper and more reliable energy. Beyond the financing of the dynamic off-grid energy sector, the Fund will also actively address the solar potential for the commercial and industrial (C&I) sector. In June of 2022, responsAbility issued a $14 million loan to d.light, a leading producer of solar-powered products for low-income families in emerging markets. The loan will provide flexible capital to fund d.light’s newly established financing vehicle, Brighter Life Kenya 2 (BLK2), and allow the organization to expand its operations across Africa. BLK2 is the largest off-balance-sheet financing facility of its kind.
Image from Calvert Impact portfolio Partner Accion Opportunity Fund Investee Lia Hirtz, owner of World Empanadas. Accion Opportunity Fund (AOF) works to create an inclusive, healthy financial system that supports the nation’s small business owners by connecting entrepreneurs to affordable capital, educational resources, coaching, and networks. Through innovative partnerships and outreach strategies, they reach entrepreneurs of color, underfunded entrepreneurs, and women, who often lack access to the financial services they need to build and grow their businesses. For over 25 years, AOF has served a client base that is nearly 90% women, people of color, or immigrants. Their clients’ businesses have historically had a 96% survival rate, compared to the national small business survival rate of 50%. AOF’s work has supported or created more than 50,000 jobs and generated $1 billion in economic activity.
A first-time entrepreneur at 55 years young, Lia wanted to share an Argentinian tradition with Southern California. Her goal was to provide customers with the best empanadas in town! Even throughout COVID-19, her family-owned small business found a way to continue to share sweet and savory versions of this amazing dish. Lia was facing more than just a freezer dilemma. Her business was also tied up in aggressive merchant cash advance loans that helped finance their move into their new space and other improvements like installing a hood for the stove. She had some capital thanks to personal loans from friends and family, but World Empanadas needed help to get the freezer unit that could make their business really take off. Lia’s loan officer, Robert, offered Lia a $15,000 Accion Opportunity Fund loan, which helped World Empanadas purchase the walk-in freezer unit. “I couldn’t believe it,” Lia said. “Within a few weeks Robert called me and told me I could pick up our check. It was just like that.”

Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Good Intentions: What faiths say about how they invest – and how they can do more

First in-depth, multi-faith analysis of the extent to which faith groups align their values with their investment portfolios

There’s been a huge rise in interest in values-driven investing in recent years, including among faith groups who are increasingly aware of the importance of investing in line with their faith values – particularly when it comes to achieving their environmental and social goals.

However, there is still a big gap between their aspirations to align their investments with their faith values and actual implementation, according to a new study by FaithInvest.

Good Intentions

The world’s faiths have billions of dollars invested in global markets. Good Intentions: What faiths say about how they invest and how they can do more is the first multifaith, in-depth assessment of faith groups’ publicly available statements about their investment policies.

Good Intentions ReportFaithInvest, a UK-based international non-profit founded to empower the faiths to invest in line with their beliefs and values, developed an analytical framework to assess the extent to which faiths are integrating values into their investments.

It found that while many faith groups profess a faith component in their investments, this practice is by no means universal, and of those that do, the extent of the alignment varies widely.

The FaithInvest study looked at the investment policies and guidelines of organizations that are formally a part of, or affiliated with, a faith practice. The extensive survey was multi-faith and global in scope, and in addition to faith organizations it also included faith-oriented financial institutions, professional networks, non-profits, schools, and other faith-based institutions.

Essential Guiding Principles

“Investment policy and guidelines (IPG) statements are the essential guiding principles and prescriptions for how faith-based investment portfolios are managed,” says Mathew Jensen, author of the study and a member of FaithInvest’s Investment Solutions team.“Turns out, faith-aligned IPG statements are more a rarity among faith-based asset owners than one might expect.”

With 84% of people globally belonging to a religion, according to the Pew Research Center, and thousands of religious organizations worldwide, Jensen says: “We were surprised to find only 164 publicly available statements about faith investment policies.”

Of these, only 42 provided enough information in their investment policy statements to make a credible analysis, and just 69% of these indicated that faith values have a role in the principles and guidelines that govern their financial assets.

Even among this group, the extent to which faith values were integrated into portfolios varied widely. In fact, only two of the 42 investment policy and guidelines statements studied indicated extensive integration of faith values in their investments.

“We found that many faith organizations make at least some mention of pursuing faith-consistency in their investments, and some have done much to move toward full alignment, but many others have a long way to go.” explains Jensen.

Billions of Dollars

Why is this important? Although a full picture of global faith investments is hard to come by, faith groups manage billions of dollars of funds. Examples of faith holdings include:

According to the Zug Guidelines to Faith Consistent Investing, a landmark 2017 publication that outlined the investment priorities of dozens of faith traditions from eight of the world’s major faiths – including Buddhism, Christianity, Daoism, Hinduism, Islam, Judaism, Sikhism and Shintoism – faith organizations likely own 10% of world’s entire financial investment.

“With extensive resources and deeply held values, the faiths are vital to planning environmental and sustainable development around the world, and mapping faith values with investments is central to that end,” says Nana Francois, Director of Investment Solutions.

Analytical Framework

To conduct the study, FaithInvest developed an analytical framework to assess the extent to which faiths are integrating values into their investments. “This is the first in-depth assessment of the publicly available investment policy and guidelines statements of faith groups, and we wanted a robust tool to conduct the analysis,” Jensen said.

The analytical framework consists of a series of questions that the researchers posed to reveal the presence or absence of ‘indicators’ of faith-based alignment. For example, the first and arguably the most important question, ‘Does faith have a role in the organization’s investment policy and guidelines?’

This ‘front door’ query is followed by a battery of questions that probe several aspects of policy, including declarations of the use of strategies such as screening, engagement, and impact investing, and the presence of guidelines (specific portfolio management directives), such as explicit exclusions or reporting requirements.

Work to be Done

While it’s clear that a lot of work has been done by some faith-based asset owners to integrate faith values with their investable assets – i.e., faith-consistent investing – this study shows there is much more work to be done: from a greater number of faith organizations declaring a faith role in their investment policies, all the way to more detailed guidelines and robust reporting to ensure effective integration of faith-based guidelines.

“It’s likely that fiduciary concerns are holding back some faith-based asset owners from taking a more faith-aligned approach, but with faith-conscious investments becoming more widely available, often providing market-like returns, this may not be a valid rationale for long,” explains Jensen.

Assess Your Progress

The methodology used for this study can be applied to any faith organisation’s investment policy and guidelines statement to help them assess their own progress against their intentions. FaithInvest’s Investment Solutions team is available to assist any faith-based asset owner with an examination of its IPG statement in pursuit of more fully faith-aligned investments.

The Findings in More Detail

  • 164 publicly available statements were found and considered
  • Of these, only a quarter (42) contained sufficient detail for an assessment to be undertaken.
  • 69% indicated that faith values have a clearly stated role in the principles and guidelines that govern their financial assets (labeled the ‘Yes’ group)
  • 31% made no mention of their faith (the ‘No’ group).

The ‘Yes’ Group

  • Only two organizations had clearly documented that they had extensively integrated faith values throughout the entirety of their investments.
  • On average this group’s score was just 5.4 on our 10-point scale, indicating that better alignment is achievable for many.
  • Nearly 70% of the Yes group use negative screening and/or divestment practices
  • Just over 50% use positive screening
  • Nearly two thirds outlined engagement and advocacy activities
  • Two thirds document a specific reason or goal for incorporating faith values
  • Just over 40% document documented proxy voting policies
  • 45% stipulated that faith values are integrated (ie, applied across all assets)
  • 34% designated a separate sub-portfolio

 

Read the report in full – Download the Good Intentions study.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing

It’s Not a “Nice Thing”!

By Mark Regier, Praxis Mutual Funds and Everence Financial

Mark Regier of Praxis Mutual Funds and Everence FinancialOne of the most frequent comments I get following any presentation on the real-world impacts that are possible through one of Praxis’ five mutual funds, is how “nice” it is that we’ve decided to commit 1% of each of these funds to community investing. While I appreciate the appreciation, in my head I’m usually screaming “It’s not a ‘nice thing!’” The allocation of concessionary, catalytic capital to marginalized people and communities is — or should be — much, much more, especially for people of faith.

For too long, community investing has been seen as an act of charity, equated with largesse or evidence of excess resources in one’s economic life.  And while charity — financial gifts drawn from excess finances and given to causes and organizations that require such support to do their good work (disaster recovery, the arts, crisis food and shelter, ministry support, etc.) — can be an important aspect of one’s faith and worship life, community investing fulfills a different function. Far from just a “nice thing”, community investing is something altogether different.

But before we explore some of the deeper motivations community investing has for people of faith, particularly those in the Judeo-Christian tradition, perhaps a definition is in order. Community investing — or community development investing (CDI) as we frequently call it at Praxis — is distinguished from other good/responsible/social/faith-based/ESG investing by the primary intent of the investment being to help deliver the benefit of economic opportunity for others even at the cost of a competitive return for the investor. This intentionally concessionary capital can take many forms but it plays a critical — catalytic — role between truly charitable contributions (or grants), which are frequently limited, and the scale of impact offered through more traditional, market-rate, socially-oriented investments.

Arguably, there appears to be a clear contradiction between an “investment” and a deliberately concessionary rate of return (a conversation I and my colleagues have regularly had with SEC examiners!). It seems to defy convention and the common understanding of investing to begin with. Yet, therein lies the true power of community investing — and its importance for faith-based investors. Community investing combines the rigor, prudent management and economic sustainability of traditional investments with a deep vision and understanding for the special challenges faced by organizations seeking to bring opportunity and long-term financial viability to individuals and institutions on the margins of our society. Where charity seeks to do good work, community investing seeks to leverage an organization’s charitable and inherent community resources to expand that “good work” by multiples.

So why then is this unique — and powerful — niche of impact investing so important to Christian faith-based and other values-driven investors? And why are faith-based, values-driven investors so important to community investment-oriented organizations? As the concessionary nature of many community investments continues to confound most investment consultants and mainstream financial professionals, the support and involvement of investors with the faith- or values-orientation to see first the benefits to underserved communities is more important than ever.

If community investing is not just a “nice thing” for faith-based investors, what is it and where does it fit?

It’s a “good thing” — For starters, we have ample evidence of the incredibly important role that catalytic capital — and the investors that provide it — play in sustaining and expanding economic opportunity to those who would otherwise not have access. The success of such efforts have been previously addressed by community investment leaders such as Debra Schwartz, Tim Freundlich, and Dana Bezerra in the October 2022 issue of GreenMoney Journal. Investors today can understand the vital role their community investments have in lifting up the underserved in local and global communities.

It’s a “sustainability thing” — People of faith are routinely called through holy texts to care deeply for the people and created world around them. Passages in both the Old and New Testaments speak frequently to our responsibility to be responsible. The concept of sustainability inherent in community investing reflects not only the support and empowerment of those left on the margins, but also the desire to see all people included in productive, sustainable economic relationships that bring lasting hope for a life of wholeness and wellbeing.

It’s a “justice thing” — Themes of justice (and condemnation for those who fail to be concerned) abound throughout Judeo-Christian scripture. Some of Christ’s harshest critiques were focused on people of power and privilege who routinely ignored faith’s call to care for those around them deeply and sacrificially. Meeting society’s rites and standards were not enough if the needs of the poor, the widow, the orphan, and the outcast remained unaddressed.

It’s a “faith thing” — Fundamentally, particularly for Christians, the intentional inclusion of the marginalized in our financial decision-making is inextricably linked to the concept of stewardship. Stewardship is the prudent management of resources on behalf of the owner of those resources. This includes both the productive use of those resources as well as the general interests/instructions of the owner. For Christians, the true owner of all is God. As Christian stewards we need to be both productive and deeply aligned with God’s will and vision for wholeness (shalom) in this world. The intentionality and impact of community investing mirror these fundamental faith commitments.

It’s a “relationship thing” — Probably one of the most important, but often overlooked (or under-implemented), teachings within Christian scripture is the primacy of relationships — our relationship to God and our relationship to those around us. This concept is made clear in the Greatest Commandment, documented in Matthew 22:34-40, where Jesus, quoting the Old Testament, tells us to “Love the Lord your God with all your heart and with all your soul and with all your mind” and “Love your neighbor as yourself.” (NIV) It is our understanding of these two fundamental relationships that should undergird all our choices — financial and otherwise.

Courtesy of Praxis Mutual Funds - Getty Images
Courtesy of Praxis Mutual Funds; Getty Images

It’s a “transformational thing” — This is where community investing really shines — for me personally as a Christian and for my values- and faith-driven organization. Community investing provides both the opportunity and the challenge to bring us into direct relationship and a deeper understanding of those who have been shut out of our economic system for a wide-range of reasons. This is one reason Praxis works to support organizations like the national Christian Community Development Association and the fledgling Anabaptist Community Development Network, which serves our own faith community. Their on-the-ground work strengthens community development organizations and their impact and connects us with challenges and realities we might not fully understand.

As people of faith, community investing helps us understand our own privilege and the world’s needs in new ways. It connects us with new partners for this good work. It opens doors of response in meeting real human needs, often in lasting and sustainable ways. It expands our reach — many of us have more to “invest” (in a safe, if concessionary, manner) than we have to “give”. Perhaps most importantly community investing has the power to transform us as Believers, seeking to live out our most deeply held values, responding to a world in need with hope and opportunity.

 

Article by Mark A. Regier, Vice President of Stewardship Investing for Praxis Mutual Funds and Everence Financial, a leading provider of faith-based financial products in the United States and a ministry of Mennonite Church USA. Mark has been involved in the field of ethical and socially responsible investing at Everence for more than 25 years. He oversees the company’s work in socially responsible investing (including investment screening, ESG integration, proxy voting, corporate engagement and community investing). In 2015, Mark assumed leadership of the sales and marketing efforts for the Praxis Mutual Funds.

Mark has served as a member of the Board of Directors for the US Social Investment Forum, the Interfaith Center on Corporate Responsibility, Partners for the Common Good, the International Working Group (USSIF), and The Isaiah Fund for Disaster Recovery Investing. In 2006, Mark received the SRI Service Award, the US social investment industry’s highest honor.

With over 30 years of service to the church and a background in ethics and theological studies, Mark is often a resource to national and international media and organizations on faith-based and community investing issues.

About Praxis

Praxis Mutual Funds is a leading faith-based, socially responsible family of mutual funds designed to help people and groups integrate their finances with their values. Praxis is the mutual fund family of Everence Financial, a comprehensive faith-based financial services organization helping individuals, organizations and congregations. To learn more, visit praxismutualfunds.com and everence.com, or call 800-348-7468.

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 praxismutualfunds.com for a prospectus, which you should read carefully before you invest.

Praxis Mutual Funds are advised by Everence Capital Management and distributed through Foreside Financial Services, LLC, member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.

Mutual fund investing involves risk. Principal loss is possible.

ESG: environmental, social, governance.

The Fund’s investment strategy could cause the fund to sell or avoid securities that may subsequently perform well, and the application of ESG and/or faith-based screens may cause the fund to lag the performance of its index.

The market rate (or “going rate”) for goods or services is the usual price charged for them in a free market.

Rate of return is the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment’s initial cost.

Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Global Water Security–the single most significant impact and investment opportunity

By Thomas Schumann and Kübra Koldemir, Thomas Schumann Capital and SustainFinance

Thomas Schumann and Kubra KoldemirThat water is essential to planetary well-being is undeniable. It is indisputable that securing water for different uses provides countries with socio-economic development. However, investing in water resource development is still challenging for governments and corporations worldwide. Energy has alternatives (solar, wind, nuclear, etc.), but there is NO substitute for water.

Water demand is projected to grow by 55 percent by 2050 (including a 400% rise in manufacturing water demand). By 2050, 1 in 5 developing countries will face water shortages. Today, the challenge of water security is global and growing. The criticality of this challenge is reflected in the World Economic Forum’s 2015 Global Risks Report, in which water is ranked as the global risk with the single most significant potential impact on economies over the next ten years. Reduced freshwater availability and competition from other uses — such as energy and agriculture — could reduce water availability in cities by as much as two-thirds by 2050, compared to 2015. Together, global water use, storage, and distribution — and the lack of wastewater treatment — contribute 10% of global greenhouse gas (GHG) emissions, making it key to the net-zero transition. Reflecting the value of water in investment decisions and disclosing exposure and vulnerability to water-related risks in investment portfolios could further help align the financial sector with water security objectives.

According to Wood Mackenzie, Global GDP is projected to reach $170 trillion by 2050. A World Bank report on Climate Change and Water suggests that investing in global water security mitigates the potential loss of up to 6% or $10.2 trillion of global GDP per year.

There are two critical aspects of financing water security for the future. By far, the most considerable amount is what must be financed by governments and municipalities to support water extraction, delivery, and sanitation. The OECD estimates investment needed until 2030 to achieve SDG 6 is approximately $1.7 trillion (3 times the current spending). Moreover, this represents only a fraction of the water investment agenda: projections of global financing needs for water infrastructure range from $6.7 trillion by 2030 to $22.6 trillion by 2050, and these figures do not cover the development of water resources for irrigation or energy (they are wrapped into the clean energy investment estimates.

TheIMPACT Sept. 28, 2022 episode – Alicia Nieves talks with Thomas Schumann, founder of Thomas Schumann Capital, about reviving America’s Water System with traditional and alternative bundling. Thomas expounds on achieving the UN’s Sustainable Development Goal 6, the connection of the water crisis to the climate crisis.

 

Food and water use are inextricably linked, of course. Agriculture is rapidly draining aquifers and surface water reserves worldwide; in most countries, agricultural pollution is the leading cause of water degradation. According to a Ceres report, Feeding Ourselves Thirsty, it is noted that crop irrigation accounts for 75% of total consumptive use of water in the United States, with most of it, used to grow crops for livestock. As the single water user across the nation, irrigation for cattle feed crops is the leading cause of water depletion in a third of all western U.S. sub-watersheds.

“We must invest in companies innovating to shift the global food and water supply system away from industries that use disproportionate amounts of precious resources of land and water if we are to have enough resources to feed a growing global population of almost 10 billion by 2050,” says Elysabeth Alfano, CEO of VegTech™ Invest, Advisor to the world’s only Plant-based Innovation ETF, EATV.

From a corporate investment perspective, the numbers are smaller but still material in terms of impact on corporate earnings in the future. “There is a compelling economic case for investment in water. The benefits from strategic investment in water security could exceed hundreds of billions of dollars annually.” The recent analysis provides a partial estimate of global economic losses related to water insecurity, which are nearly $500 billion per year. Taking action on water risks is essential for climate action and makes business sense. That is the business and investment case for Global Water Security. This issue has yet to include establishing a fair price for Water that the Global Commission on Economics on Water is working on. A price for water and creating a water credit similar to the carbon credit ensures additional upside for investing in global water security.

Thomas Schumann Capital creates and sponsors public and private equity investment products for Global Water Security. TSC also supports Project Greenland, which offers large-scale freshwater, industrial- and agricultural water export from the world’s Water-richest region Greenland to the water-stressed areas such as Texas, California, Europe, and MENA.

Additionally, Thomas Schumann is a global founding signatory of Ceres’ Valuing Water Finance Initiative, which represents $9.8 trillion in assets under management that seeks to qualify/quantify Water Risk in equities. Thomas Schumann also partners with UN-Water, World Economic Forum, Council for Inclusive Capitalism, and the Global Islamic Impact Investment Forum to accelerate Global Water Security and UN SDG6 in capital markets for 7.8 billion stakeholders. Find further information here.

 

Article by Kübra Koldemir and Thomas Schumann

Thomas Schumann, a sustainability pioneer, innovator and steward at the Council for Inclusive Capitalism. He is the founder of Thomas Schumann Capital and globally recognized advocate of global water security.

Kübra Koldemir is a founding partner at SustainFinance. She has written numerous sustainability articles that have been published in various global publications. She holds an additional position as a sustainability researcher at Argüden Governance Academy. 

Koldemir started her financial career in 2006, working as an investment analyst in New York City, first at a long-only fund and later at a hedge fund with $1 billion in assets under management (AUM) that specialized in financial service companies. Focusing on international investments, she assessed the strategy and results of numerous multinational corporations across several sectors. 

Koldemir holds a BA in international relations from Mount Holyoke College and an executive MBA degree from the University of Texas at Austin.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

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