Who dominates the impact investing space?

No one! Why?

That is a fact, although in a time of fake facts it doesn’t matter.

Why is there not a single bank, wealth manager, or major financial institution the leader in the “race for values investors”. We keep hearing how ESG and Impact is booming and trillions are pouring into the space. If that was true, then why is it that not a single bank is perceived as the leader, the champion, THE IMPACT BANK for UHNW(Ultra High Net Worth) or HNW (High Net Worth) Investors.

One only needs to engage with the Private Banks, Wealth Managers, or Mega Banks to understand the issue here. These institutions are spending nothing on ESG and Impact Investing capacity building. Spending is going to the following:

  • ICT
  • Cybersecurity
  • Compliance
  • Capital Buffers
  • Traditional marketing
  • Bonuses

With this lack of commitment financially, psychologically and emotionally, ESG and Impact are just new products to add to the list of offerings to clients. It is not an important strategy!

It seems that the financial institutions are schizophrenic. All of them don’t want to be seen as a Sustainable, Impact or Values Bank, because they are afraid that clients or staff might leave . However, they also don’t want to be seen as a Bank not embracing ESG, Impact and Values Investing. Make up your mind. You can’t be partially pregnant. To paraphrase Danny Ocean asking Linus Caldwell in Ocean’s 11. “Your either in our out.”

I have met with many Private Banks and Wealth Managers. Nearly all seem to be really out of touch with clients wishes, particularly nextgen clients. The lack of commitment to see the opportunity for clients and the bank is beyond belief. Most of the time it is lip service and most of the time the banks just want to learn some tricks to convince their clients that they understand enough. However, when we (TBLI Group) speak to clients, they are keen, looking and open to a Values Investing strategy. When we ask “do you want a financial return with a social and environmental added values”, they all say, “absolutely. Can you do that?” If you want to you can. No one ever said to me “No I want all my money to make life miserable for everyone and I am working at that 24 hours a day.”

I have heard for years that the problem is the client. They are not interested. I don’t believe that anymore. Sure there are some clients that don’t believe or are not convinced. That is an educational exercise. Do the work to convince. When TBLI started, nearly 25 years ago, educating asset owners and managers, there was no PRI, CDP, EVPA, AVPN, Eurosif. No infrastructure at all. However, TBLI was still able to make inroads, and help build that infrastructure, because we were committed.

Recently, I was at FT seminar on ESG and Japan. The entire day was taken up with complaints by asset managers complaining that ESG date is not good enough. Over and over and over. They kept repeating “ESG is not Good Enough”. I have heard this for 25 years. The moderator asked are there any questions from the audience. I raised my hand and said that “I have heard for 25 years this complaint that ESG Data is not good enough. Why don’t you ever say that the financial data is not good enough? We have gone through a financial meltdown, Maddoff, Worldcom, Parmelat, Enron, etc. The financial sector has lost trillions of dollars and there has never been a single company that went bankrupt on questionable esg data.” I was told that my comment was not a question and we moved on.

Perhaps no one will take a leadership role to own the Values Investing space. That’s fine, but the market or clients are there. Particularly when we dispel the myth that there are no deals. There is no shortage of deals. There is a lack of infrastructure to find illiquid opportunities, at scale. They exist but they are not to be found in traditional places. Different neighbourhood. Doesn’t mean they don’t exists.

TBLI has spent 25 years educating asset owners and managers about ESG and Impact Investing. Convincing has never been a challenge, particularly when you speak to wealth holders. Banks need to allocate the resources needed to dominate the space and grow the industry. They need to approach this as they would if it was an M&A. Until that time, the only big story will be the press releases coming out about how such and such a bank is committed to Values Investing .

To paraphrase Yoda “Do or do not, there is no try”.

A pig and a chicken were walking down the road. As they passed a church, they notice that a potluck charity breakfast was under way. Caught up in the spirit, the pig suggested to the chicken that they each make a contribution.

“Great Idea!” the chicken cried. “Let’s offer them ham and eggs!”

“Not so fast.” said the pig. “For you, that’s just a contribution, but for me, it’s a total commitment.”

The Weasel Coffee, Time & Innovation

When did a coffee simply made stop becoming a morning beverage or a drink to enjoy with friends? It seems that the choice of coffee has proliferated, with Caffè Americano,  Caffè Latte, Cappuccino, Macchiato, Double skim soy latte, and the thousands of other flavors. Then we have the continuous search like Holy Grail search for the ultimate coffee beans,

  • Tanzania Peaberry Coffee
  • Hawaii Kona Coffee
  • Nicaraguan Coffee
  • Sumatra Mandheling Coffee
  • Sulawesi Toraja Coffee
  • Mocha Java Coffee
  • Ethiopian Harrar Coffee
  • Ethiopian Yirgacheffe Coffee
  • Guatemalan Antigua Coffee
  • Kenya AA Coffee

Let’s not forget Kopi Luwak made famous by Jack Nicholson in the movie The Bucket List. Kope Luwak is a coffee bean consumed by a palm civet (toddy cat) who eats the beans and then runs them through its bowels only to excrete them,  to create the unique blend.

I am sure there is someone out there who is developing a coffee bean that is grown shaded in the upper Andes or Himalyas, or on top of a warehouse in Williamsburg, Brooklyn. These beans are blessed every day by a Monk, Priest, Shaman, Rabbi, and beautiful music is played to make them grow in perfect harmony. After that, special hand held lasers analyse all the beans to check that they are ripe for picking. Following that a robot harvests specific ripe beans, which are fed to Panda Bears who swallow the beans and then re-appear with their daily digestion. These beans are then cleaned and dried for 7 days in special drying room that maintain the right temperature through solar heating. They are then roasted in a clean room where everyone is wearing surgical clothes and masks so no contaminants come in contact with the beans, during the roasting process. Finally, after the roasting, the beans are ground by hand in a granite mortar and pestle, by Asian women over 45, to achieve the perfect pressure. Finally, a chemical analysis of the ground coffee is made,  and then the coffee is brewed with the special Belgium Kings Court Coffee Syphon, to bring out the special flavour. Cost 100 US Dollars a cup, but the cup is not paper or plastic. True innovation.

If you ask any of the regulars at the Apollo Cafe from the movie Frankie and Johnny or any authentic person who has figured what life should be and the importance of humour, taking the time and empathy, they will all say. “Tastes like coffee” describing this unique blend mentioned above,  “but it is missing a soul. Frankie give me another cup of the house brew in a normal cup.”

I don’t share this constant obsession with trying to find “perfection or innovation only for innovation sake or just dying rich as a goal”. The authentic company you share, the time you take and being in the moment is what matters. This brings out the true flavours of conversation and company. Constant innovation and change just to be different, does not. Take the time today to call someone and just share a funny story or joke. Endlessly rewarding. 

Enjoy Frankie and Johnny