Notes from the Five Fund Forum

By Daniel Riley, Chair, Socially Responsible Investment Committee

“Look for better then average returns”

This was the advice given by other members of the Green Mountain SRI Committee when I asked what I should look for at the Five Fund Forum, a sustainable investment conference recently held in Boston, New York, and San Francisco by Watershed Capital Group. This advice, while it might seem rather obvious and unhelpful to someone on the outside looking in, reflects a simple truth about what we have to aim for as representatives of a small endowment; we need to grow value as well as green our investment practices.

So what was the goal of attending the Five Fund Forum as opposed to staying with research and phone calls to responsible investment firms? Well, since the 15% of our endowment dedicated to SRI efforts is concentrated in Portfolio 21, conferences like the Five Fund Forum serve not only as an interesting way to learn about the emerging industry of responsible investing, but also an excellent way to build a network of possible future connections for continued investment. Even if our school had a different SRI strategy, one involving proxy voting and shareholder advocacy, I would suggest attending these conferences, if only to see how the financial sector views the idea of sustainable investing.

“What we all do is investment; we all still want to make money”

Sustainable investing is still investing, and as my main purpose for attending this conference was to learn how those in the industry viewed their work it was interesting to see that this quote was how the conference began. It’s a reality check, a statement that in the end, any financial strategy has to in the end be profitable in order to appeal to the broader audience. As a student looking into responsible investing I can’t really admonish those who see it as “just making money” because that’s the way these professionals have worked for decades. This was no ordinary class or lecture, but in a way much more valuable as I was able to listen and take notes on how real fund managers lay out what their funds do, the language used, and the asset strategies described.

From the standpoint of both a student and the chair of our SRI committee one area I was particularly interested in was banking, as community investment is a core part of the Green Mountain mission and a personal interest of mine. Since a local bank can serve as a real driver behind the shape of a community the language that comes out of a bank has to be more then direct asset investment or capital strategy, there has to be a desire to serve the interests of the community through support of businesses and projects that lead not only to profit, but to greater social welfare. Even in the small selection of funds presented at the conference there were to unique approaches to this issue, with one fund seeking to invest in companies that help underbanked communities to address social issues and another seeking to establish a bank with core values tied to the three “e”s;  environment, economy, and equity. In a regular class it’s not often true that you are able to question a banking professional with decades of experience how the issues of social responsibility “fit into your business model”, but if your willing to seek out these people it is refreshing to see how eager they are to share how they came to do what they do and where they think the industry is going.

“It was great getting to talk to you at the conference.”

One of the contacts made at this conference was someone who, it turns out, had grown up in my home town, and was happy to see a student becoming involved in responsible investing. I raised the point to him that in fact this was a national movement, and ours was just one of many SRI committees out there. “That may be, but you’re the only one here,” was essentially the reply, and he has a point. The premise behind responsible investing is that money is the great motivator, where shareholders are able to influence the behavior of companies in positive or negative ways through the availability of their funds. This process cannot work, though, if the voice of the shareholder isn’t heard.

So, if you’re interested in responsible investment, whether as part of an official SRI committee or as a possible future committee for your school, I would recommend going to conferences like the Five Fund Forum or the upcoming SRI in the Rockies conference in New Orleans. Students are the voice of this movement; we are the ones who will push it forward and it is up to us to sustain the momentum with the help of organizations like REC. Good Luck, and see you at the next conference.

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