Max Mintz

How do we “ESG”?

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We talk a LOT about Environmental, Social and Governance data here, including how that data can be used to manage risk and some of the different ways that we as investors can use that data to align our clients’ investments with their values. Recently, I had a chance to sit down and talk with a pair of colleagues I’m proud to call friends and talk about our personal stories and the journey we’ve taken to understand and use this data. It was a fantastic conversation, and one that’s well worth a listen.

From the show notes: Investors and advisers are more interested than ever in putting their money to work to better the planet and the people living here. While there’s lots of talk about “making sure your money aligns with your values,” there’s very little talk about how to actually do so. Where does one find the data on environmental impact, carbon emissions, social justice, diversity, community impact, biodiversity protection (or harm) and all the other critical ESG metrics when making an investing decision? What does that data look like? How should one weigh those metrics against basic financials? In short, how does one actually go about ESG investing?

If you prefer to listen on the go, you can also get this podcast on most of the major podcasting platforms, including:

Bonus points if you reach out to me to follow up on what I asked all listeners to do!

Robert Goellner

New Thoughts = New Vocabulary!

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There is an old saying, “If you put your ear to the ground” you can hear something coming.  This still applies, except the ‘ear’ is now mostly electronic!  In our business we need to stay very alert and follow all of the news that will impact our future.  Clearly , there are changes coming that will impact all of our lives.

Using this BLOG I intend to introduce you to as many of these new forces as possible over the coming weeks. In this way, we can explore the issues and begin to digest what our future will look like and how we can make it all work.

The New Economy is a place to start.  You may have heard or seen this already in various ways. Basically it means an economy that meets our current social and environmental goals. An economy that focuses less on driving profits and more on good corporate citizenship, positive community impacts, and expanding ownership differently.

The Triple Bottom Line is the next item on the agenda. It is otherwise seen and heard as “People, Planet, and Profits.” This idea too focuses as much on social and environmental concerns as it does on profits.  Sustainability is the main thrust here.

The J.E.D.I Collaborative and the American Sustainable Business Council looks at the world from the same viewpoint as the two items above, but it also adds another set of valuable ingredients: Justice, Equity, Diversity and Inclusion to the mix.  The idea here is to “recognize the fundamental rights of all people to develop their talents, earn a living wage, and be treated with dignity in the workplace.” Our future economic life depends on all of us working together and prospering!

In studying these three ideas you can get a start in terms of how these ideas are different from previous similar ideas, and you can put them all together and imagine how the world will be different than it is now. We at Common Interests talk a lot about the Global Village in which we live.  Basically these three ideas will be part of making this Global Village a wonderful place!

As I said above, this is the first of a series of BLOGS.  Over time we will build a complete framework that relates to our collective futures.  Common Interests is becoming a “Thought Leader” in helping to develop a future that features the best use of all of our talents, hopes and dreams, and makes our world a better place.

Max Mintz

Untangling ESG Investing

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One of the missions of our firm is to encourage other financial advisors to adopt Sustainable, Responsible and Impact Investing techniques. In pursuit of this goal, I recently had the opportunity to go on the “Untangling Fintech” podcast hosted by Stathis Partners, a firm focused on delivering market intelligence to advisors and executives working at banks and credit unions. As I very rarely have the opportunity to speak with these types of advisors, I jumped at the opportunity to get the message of Sustainable Investing out to this group.

This conversation went on for a while, and it got a bit technical (it is aimed at other financial advisors after all), but we had a LOT of fun recording it, and if you’re looking for a way to get to know me and the way our firm approaches ESG data, this is an excellent way to do it. You’ll also hear from our partners at YourStake.org, who sponsored the podcast, and get to know why we’ve chosen to work with them.

You can listen to the podcast here, or where ever you get your podcasts these days.

 

Hosts:

Scott Stathis and Bob Mittel

Discussion Guests:

  • Gabe Rissman – Co-Founder, YourStake
  • Patrick Reed – Co-Founder YourStake
  • Sean Meighan – Managing Director, Advisory Services, Atria Wealth Solutions
  • Max Mintz – Financial Planner, Common Interests
  • Keith Burger – National Sales Director, formally AIG now Luma Technologies

Sponsoring Partner:

YourStake

Music Credits:

Band: A Rusty Something (Nick Simpson)

Song: SSRI

Click here to view the show page at Stathispartners.com

And click here to view the show notes, including the graphics that were discussed on the podcast. 

Max Mintz

Watch the Official Selections of the 2020 ESG Film Festival!

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These are the films from the 2020 ESG Film Festival, presented on Dec 3rd. From 508 entries, these 12 films were selected to showcase the power of ESG and Impact, and inspire audiences around the world to act. Every action we take has power.

As a member of the advisory board for this event, I helped to judge the film festival we presented at the event. We’re proud to present the films we selected below. Films denoted with Honorable Mention were not screened live due to time constraints, but were deemed on merit worthy of inclusion here.

Flowers in the River This film won both the Judges Best Film & Audience Choice awards!
Directed by: Tiffany Steeves & Andrea Chung – United States. Ankit Agarwal, founder of Phool, shares the story of the flower recycling business he created and the impact it is having on the Ganges River in India

>

Making of ‘Flowers in the River’
The filmmakers behind the documentary that won both of the awards at the 2020 ESG Film Festival share where the story idea came from, how they made the film, and a valuable life lesson learned along the way.

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Seeding the Sea
Directed by Sarah Redmond & Caroline Almy – United States.
Off the coast of Belize, seaweed farming is a more sustainable alternative than fishing. Lowell Godfrey grew up there, and now owns his own seaweed farm that he hopes will inspire other fishermen

>

The Voice Of The Voiceless
Directed by Dalton Tokarcyzk – United States.
Indie rapper Marcel “FloStorm” Jones reflects on his experiences as a protestor who was arrested during the George Floyd-inspired protests during the late spring of 2020


Gando
Directed by Teymour Ghaderi – Islamic Republic of Iran.
In the Sistan and Baluchestan provinces of Iran water is scarce. However, where there is a Gando, an Iranian crocodile, there is water. The girls who fetch it risk life and limb.

>

Dry Tears of the Aral
Directed by Danila Volkov – Russian Federation.
The shrinking of the Aral sea over the last 60 years is the ‘most staggering disaster of the twentieth century,’ (UNDP) and has turned the lake into a toxic salt plain. Mr. Kamalov fights for the lake.

>

Waste Warriors of Bangalore
Directed by Goutham Varrier – India.
The people who work tirelessly to keep Indian cities clean often lead a very difficult life, with poor income, and no social security. Indha Mahoor and the NGO Hasiru Dala want to change that

>

Embers
Directed by Lexie Chu – United States.
A look back on the devastating 2018 Southern California fires through the eyes of animal rescuers.

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Be Bold and Win the Dream
Directed by Novera Hasan Nikkon – Bangladesh.
A group of young girls in one of the most remote villages of the northern region of Bangladesh organized under the banner of a football team to stand against the gender discrimination present in their society

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Iceberg Licking Society
Directed by Nathan Ceddia – Iceland. *Honorable Mention
A never before seen look into the mysterious world of the Iceberg Licking Society as the association faces iceberg-licking’s greatest threat: global warming

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90 Minutes Without Meat
Directed by Dan Botterill – United Kingdom. *Honorable Mention
Football club Forest Green Rovers are known for being the world’s first carbon-neutral football club, as well as only serving plant-based fare during matches.

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What About My People?
Directed by Tiffany Steeves – United States. *Honorable Mention.
Lerang Selolwane, co-CEO of Lucient Engineering in Botswana, shares his personal journey and vision for his country.

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Te’la
Directed by Peter Okojie – Nigeria. *Honorable Mention

The short story of a young man that came from the northern part of Nigeria and migrated to Lagos state, one of the fastest growing cities in Africa, for a better future.

>

InvestmentNews also has these videos on their website as well, with more information about the event.

Max Mintz

What is World Tree?

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If you had the opportunity to fight climate change, inequality and poverty all at once, would you take it?

What if that opportunity also included the potential for profit?

If you think that sounds too good to be true, it’s time for you to meet World Tree and their Eco-Tree program.

World Tree

World Tree was founded by Wendy Burton in 2015 as a way to promote the benefits of the Paulownia tree, also known as the Empress Splendor tree. This particular tree boasts some very impressive stats: it’s the world’s fastest growing hardwood tree, matures in only 10 years, and can regenerate up to 7 times after harvest. The Empress tree is also non-invasive and produces some of the lightest hardwood lumber.

World Tree’s objective is to use the Empress Splendor tree to meet the growing global demand for timber in a more sustainable way. The World Tree Eco-Tree Program unites investors and farmers in making an environmental and economic impact on the world. Here’s how:

The World Tree Eco-Tree Program

World Tree grows the Empress tree with their network of farmers in North and Latin America. The farmers provide the land, labor and care of the trees, with World Tree’s guidance. The Eco-Tree Program is funded by investors, where every $3,000 invested allows World Tree to plant 1 acre of trees (about 100 trees).

After approximately 10 years, World Tree harvests these trees and sells the lumber. The profits of the sales are then split 3 ways, with 25% going to World Tree, 25% going to the investor and 50% going to the farmers.

Over 100 farmers and 1000 investors have joined the Eco-Tree Program since its inception.

Making an Impact

An investment in World Tree impacts many different corners of the world. Here are just some of the ways you can make a difference with the World Tree Eco-Tree Program.

  • Reduce your carbon footprint. The average amount of carbon emissions generated by one person in the United States is 16 tons per year. The Empress Splendor sequesters carbon at a rapid pace, helping investors to offset their carbon footprint with only one acre of trees.
  • Support farmers. World Tree provides farmers with the Empress trees, along with training and support, at no cost to the farmers. The farmers receive 50% of any profits from the harvest. After the harvest, the trees regenerate and regrow without replanting. This provides farmers with an ongoing source of income that can last for up to 70 years.
  • Support nature. The Empress provides soil with a natural fertilizer. Additionally, its flowers provide nectar to honey bees; one acre of trees will help produce 100 jars of honey per year.

Getting Involved

Schedule a time to talk using the World Tree meeting type here:



This is neither an offer to sell, nor a solicitation to buy, a security, which can be made only by the prospective investors if it is preceded or accompanied by the Offering Circular, which contains various and important risk disclosures. This material does not purport to be complete and should be read in conjunction with the Offering Circular. All potential investors must read the Offering Circular and no person may invest without acknowledging that they have received, read, and fully understand the Offering Circular. The Offering Circular can be read by clicking here. 

Max Mintz

What we’re doing internally and the importance of planning

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In the spirit of full transparency, we thought it would be worth taking a minute to discuss how Common Interests has prepared for emergencies.

  • Our first priority is the security of our clients’ accounts and our ability to provide access and up-to-date information in times of crisis. To this end, we have conducted rigorous due diligence on our partners, and have evaluated their business continuity plans. We invite you to read the business continuity plans for our key partners here:
  • Our second priority is making sure that our firm is protected so that we can continue to serve our clients. Too many people rely on us for us to get sick. Here are the steps we’re taking:
      • Our office functions almost entirely on cloud based systems. Our phones, trading system, meeting platforms, website, and client files are all hosted on separate secure cloud servers with redundant backups. We converted to these systems in the wake of Hurricane Sandy, and have been training and preparing for the next disaster since then. We have relied on these systems to continue working from the road at conferences in the past, and have full confidence in our ability to continue to serve our clients from anywhere with a stable internet connection and a power outlet.
      • We re-configured our scheduling tool to provide additional clarity and make additional options available to our clients, while restricting non-client meetings. Our firm has offered Virtual meetings for years, and we’re extremely comfortable meeting over video chat with screen-sharing. To protect both ourselves and our clients, we are encouraging everyone to meet with us virtually or over the phone.
        • Give the new configuration of our scheduling tool a spin below! We’re here to talk. Please feel free to use it to find a time to chat, even if you only have a quick question (there’s an option for that!)



 

Max Mintz

Nobody expects the Spanish Inquisition

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It’s been an especially brutal week so far in the markets, which reminds us of a classic Monty Python sketch.

Nobody Expects the Spanish Inquisition.

We can’t claim to have seen the new Coronavirus, COVID-19 coming. That’s kind of the point. Outbreaks happen suddenly and without warning. There are no ‘catalysts’ for an event like this, and as investment managers and Financial Advisors, the past few days have been difficult, to say the least. Bob and I have been on the phone with clients constantly, and expect to hear from more in the coming days. There are a few common threads to these conversations:

The Chief Weapon is Surprise… Surprise and Fear. Fear and Surprise

Like the Spanish Inquisition, the COVID-19 virus plays on our fears. As investors, we have to balance what we see and read against the goals we set and our timelines. We’ve been devouring as much information about the current outbreak as we can, attending webinars from our partners at MSCI (based on research they published a few weeks ago), reading the thoughts of managers that specialize in investing in the asian markets, and talking with clients about their goals, their timelines to meeting their goals, and whether our current strategy is still appropriate. I’m thankful that we started having these conversations at the beginning of the year, and that we’ve focused on how much risk is appropriate to take.

The truth is, nobody knows when something like this will hit, how bad it will get, or where the ‘bottom’ will be. All we can do is think through the amount of risk we’re willing to take, and stick with that strategy, having faith that this too shall pass. We invest for a reason, whether that’s saving for a house, college, retirement, travel, or any of the other reasons we save, there is always a reason. I encourage you to think beyond the short term fluctuations of the markets, and evaluate your overall strategy. Are you taking the right amount of risk for you?

We recommend some comedy to get you through the week.

And Bright Red Uniforms:

If you would like to meet with us to review your risk tolerance, here’s our scheduling tool:

 


Robert Goellner

Max will be speaking at the United Nations on December 5!

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I’m very pleased to announce that my partner Max will be speaking at the inaugural InvestmentNews ESG & Impact Forum on Dec. 5 at the United Nations.

While we specialize in Sustainable, Responsible and Impact investing for our clients, we also believe that we have a responsibility to educate and help other advisors adopt these techniques. That’s why Max has agreed to be on the advisory board for this event and give his time to speak. The panel he’s on will be moderated by Jon Hale of Morningstar (read his blog here), and will feature Colleen Denzler of Smith Capital Investors and Marguerita Cheng, the CEO of Blue Ocean Global Wealth.

Here’s what they will discuss:

As the demand for impact investment opportunities continues to grow, so does the increased responsibility on advisers to develop stronger investor education programs, increase transparency and adopt more precisely-defined metrics for measuring impact. ESG and impact investors, primarily motivated by moving the needle on specific environmental, social and governance issues, while also pursuing financial returns are increasingly flexing their purchasing power with advisers. It’s important therefore for investment advisers to understand that each client has views that are unique and diverse, requiring flexibility and customization to support each client’s goals. This panel will explore best in practice communication strategies for a more meaningful and effective client engagement experience.

As you can see, this conference is focused on Financial Advisors and other financial professionals. Click Here to register. And when you use code ESGFRIEND you can get a $50 discount. Please feel free to share this using the links below if you know anyone who would be interested in attending, and use the hashtag #INimpact so InvestmentNews knows you’re coming!

Robert Goellner

Record 515 institutional investors managing $35 trillion in assets urge governments to step up ambition to tackle climate change

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Ahead of next week’s United Nations Climate Action Summit, a record 515 institutional investors managing $35 trillion in assets urged governments worldwide to step up action to tackle climate change and achieve the Paris Agreement’s goals.

The Global Investor Statement to Governments on Climate Change, developed by the seven Founding Partners of The Investor Agenda, calls on governments to phase out thermal coal power worldwide, put a meaningful price on carbon pollution, end government subsidies for fossil fuels, and update and strengthen nationally-determined contributions to meet the emissions reduction
goal of the Paris Agreement no later than 2020.

“The global shift to clean energy is underway, but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and
the financial system to climate risks,” the investors wrote. They warned the current government commitments leave an “ambition gap” that will not prevent global average temperature from rising
beyond the 1.5 degree threshold that scientists warn could trigger catastrophic and irreversible effects of climate change.

The investors’ call to action published today comes as UN Secretary-General António Guterres is asking all leaders, from governments and the private sector, to present plans – at the UN Climate Action Summit on September 23 or at the latest by December 2020 – to cut greenhouse gas emissions 45% by 2030 and reach carbon neutrality by 2050. “I am also asking all investors to scale up green ventures, to increase lending for low-carbon solutions and to stop, in effect, financing pollution,” Secretary-General António Guterres said at a preparatory meeting for the
Summit.

Signing the Global Investor Statement to Governments on Climate Change is an action item in the Policy Advocacy focus area of the The Investor Agenda. Launched in September 2018 by seven Founding Partners — Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative — The Investor Agenda is a collaborative initiative that aims to accelerate and scale up the investor actions worldwide that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping global average temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions
that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy.

The Founding Partners also announced today the release of The Investor Agenda Annual Progress Report, which found that nearly 1,200 investors have taken action in one or more of the focus areas of The Investor Agenda. More than 750 investors have engaged with or directly influenced portfolio companies to act on climate change, more than 400 investors have stepped up their own disclosure on climate change, and more than 260 have set a climate target.

“Investors are stepping up their response to climate change and increasingly aligning their investment with the goals of the Paris Agreement,” said Rebecca Mikula-Wright, Director, Asia Investor Group on Climate Change (AIGCC). “The Investor Agenda has a pivotal role to play as a platform for supporting investors to lead ambition and catalyse sustainable investment, whilepromoting engagement across all regions and jurisdictions.”

“The Investor Agenda provides an unprecedented global forum for investors to accelerate action on climate change and drive transformation of capital markets to deliver a 1.5-degrees Celsius economy. To do that investors need to take further action themselves, but also require stronger incentives from governments” said Paul Simpson, CDP CEO.

“The global reach and potential impact of The Investor Agenda and the global collaboration of the seven organizations are quite extraordinary,” noted Mindy Lubber, Ceres CEO and President. “With the immense power and influence that investors hold in our global economy, they have a tremendous opportunity and responsibility to act at the urgent pace and scale required to keep average global temperature rise to no more than 1.5-degrees Celsius.”

“By working with our peers globally and across the regions, we can scale up ambition and action to tackle climate change and deliver on the promise of the Paris Agreement,” said Emma Herd, Chief Executive Officer, Investor Group on Climate Change (IGCC). “Collaboration is the key to success, and investors must play our part. The Investor Agenda is the platform we need to drive real investor action at this crucial point in time.”
Climate change poses an unprecedented threat to the global economy,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC). “Investors representing nearly half the world’s invested capital are sending a clear message that they need to see far greater ambition from governments in addressing the climate crisis. A considerable number of countries have already committed to delivering net zero emission economies by 2050. Investors are asking that others now follow their lead.”

“The Investor Agenda has a critical role to play in compelling investors to act and bring about lasting change around climate,” said Fiona Reynolds, CEO of Principles for Responsible Investment (PRI). “Ambition and meaningful action from governments, business and the financial sector is imperative to curb the current trajectory of global warming. These groups must act now to curb the climate emergency the world is facing by reaching the goals of the Paris Agreement to realise 1.5-degrees Celsius.”

“There is a growing urgency for investors and corporations to act on climate change goals. As of today, temperatures have risen 1-degree Celsius above pre-industrial levels,” said Eric Usher, Head of UNEP Finance Initiative. “To keep the rise to within 1.5-degrees Celsius globally, leadership from within the investor community will be key. The Investor Agenda is one critical platform in supporting investors in their individual actions.”

About The Investor Agenda
The Investor Agenda is a collaborative initiative to accelerate and scale up the investor actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. It has been developed by seven Founding Partners: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. Visit www.TheInvestorAgenda.org for more information.

Max Mintz

Climate Risk in Passive Investing

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We’ve been seeing a lot of articles recently about a “bubble” in passive (index) investing. We haven’t commented much on this trend, as we’re big fans of low cost index funds in our portfolios. However, an article came out yesterday in Forbes that makes a point connected with this debate that we agree with wholeheartedly. Jeff McMahon writes in his article “Index Funds Face Heightened Risk From Climate Change” that Index funds are uniquely exposed to the systematic risks faced by climate change, and specifically to the inevitable policy response to climate change.

The Principles For Responsible Investing (PRI) (of which we are a signatory) has been doing a lot of research on this (see here for more information, or click here to view the slides from a recent event we attended with the PRI). We have incorporated this viewpoint into our portfolios, and the way we’ve done it speaks directly to McMahon’s article from yesterday.

McMahon points to the recent testimony before Congress from Alicia Seiger, the Managing Director of Stanford’s Sustainable Finance Initiative, who argues that investors are less able to manage climate risk because they are less able to monitor it (you can read her entire testimony here). We completely agree with this for the vast majority of index funds on the market today, but in our practice we have discovered that there are a number of ESG approaches that can be used to manage this risk (see this blog post from earlier this year for more information). Further, by looking at the PRI’s research, we believe we can identify the most likely policy responses and manage these risks within our portfolios.

The most likely policy levers to secure an accelerated and just transition Source: UNPRI (https://www.unpri.org/climate-change/what-is-the-inevitable-policy-response/4787.article)

By mindfully choosing investments that incorporate Environmental, Social and Governance data in their investment process, we believe we can manage these risks. However, there are a number of different approaches emerging within the investment community, and they do not all have the same results! If you are interested in what we’re doing to manage these risks in our portfolios, or if you would like us to analyze your investments to see how exposed you are to these risks, click here to schedule an appointment!