and people. What’s new is thinking about both financial and social
returns at the same time.
SIDDIQUI: Sustainable investing is about making investments that
align with our values without risking our grant-making activities.
MAGAZINER: By nature, pension funds are long-term investors.
We need be concerned with the sustainability of the global economy
and the companies that drive it, so our pension system can adequately
support those young employees when they are ready to retire decades
[Board diversity and independence is a focus for the fund. The fund will
vote against a director if, upon joining, the board will be less than 30% diverse,
but (the fund) will also consider independence and expertise when reviewing
BRIGGS: We see sustainable investment as an important tool for
creating a more inclusive economy. It aligns with our very reason
for being. We [are] committing up to $1 billion in mission-related
investments. We will grow the portfolio over time.
MITCHELL: Sustainable investing sharpens our insights to factors
that shape the landscape of risks and opportunities for realizing
clients’ objectives. Deep exploration of the sustainability of our environment, society, enterprises, and institutions is a holistic approach
to diligence and long-term investing.
For example, there are four trends that will have significant
influence on the world and portfolios: climate change, growth of
global population, the expansion of innovation, and changing
environmental global policies. We study these trends to understand
how they shape risks and reward in resource efficiency, global industry
and services, human behavior, and ultimately, capital markets.
We may see a day perhaps in the not-so-distant future, where
“sustainable investing” is simply described as investing.
CIO: How does your organization measure non-financial
HAMMEL: Each institution defines [impact] differently, whether
it’s targeted geographic impact or a specific mission-related impact
theme. The Foundation measures impact through metrics such as
job growth, wages, worker benefits, and opportunities for upward
mobility, [and compares] financial performance to Cambridge Associates’ LLC US Private Equity Index. While many agencies work to
standardize non-financial metric reporting, for now it’s still more like
the Wild West.
SIDDIQUI: Because the impact investment sector is beginning to
develop standards for measuring social good, we’ll tap into our experience evaluating the successes of our previous grants to measure
the social impact of each investment. We create metrics tailored for
each investment, for example, total jobs created and number of lives
impacted. We also track the scalability of each investment, meaning
how much additional capital the investment raised. Tracking this
metric will help us magnify the impact of our investments.
BRIGGS: We’ve seen momentum across the industry to develop