This post was written by Robert Zulkoski, Chairman, Vermont Works Management Company, LLC; Member, Board of Advisors, SEMBA at the University of Vermont; Member of the Board of Directors, BTV Ignite; and Chairman, Greenlots
The integration of environment, social and governance factors (ES&G) into corporate and investment decision making has been gathering momentum over the last decade. Several well-researched reports highlight one of the key drivers underpinning this shift: sustainability and financial performance are linked.
A multitude of constituencies – governments, public companies, impact investment intermediaries, opinion leaders and investors – have contributed to the development of the global social impact investment market. A movement is afoot that represents a significant opportunity for businesses and markets to drive improved social value. By allocating assets towards products, services, and companies that generate positive social impact, the movement toward “impact investing” has the potential to create real value for both investors and for society.
In 2016, impact investing had one of its most successful years since the industry’s inception. The sector has morphed from the early stages of ES&G, and negative screens (no tobacco, no weapons production, etc.), to a broader definition focused on positive screens (corporate and social responsibility, sustainability, transparency, living wage jobs, etc.). These positive attributes are generally intuitively appealing to a wider range of potential investors, and so the movement to do well while doing good has expanded rapidly.
Per the findings of the World Economic Forum’s (WEF) Inclusive and Development Report 2017, policymakers and corporate officers have been urged to reconsider their priorities and put significant improvements to people’s living standards at the heart of their economic policies. The latest WEF report stressed that the way economic growth is measured must be re-imagined. Rather than simply addressing levels of gross domestic product, policymakers must reconnect with increasingly frustrated citizens and consider a wider breadth of economic and socio-economic outcomes.
Around the world, especially in the United States amongst millennials, there is an increased focus on the general well-being of individuals and societies. This entails evaluating the negative and positive features of life, and, a renewed quest for life satisfaction. Areas of increased focus include everything from the environment and other societal goals, to one’s physical health, family, education, employment, wealth, and religious beliefs. A natural extension of these trends is investors imbedding these values and desired outcomes in the investments they make.
The key principals of Vermont Works emerged from discussions among local leaders about the importance of supporting Vermont businesses that have a positive impact on Vermont communities. We recognize that in addition to providing quality jobs and economic development, many Vermont companies contribute market solutions to social and environmental challenges. Simultaneously, civic-minded investors expressed interest in earning competitive returns while producing positive community impact. The intersection of these objectives and philosophies inspired the creation of our investment management company.
Vermont Works believes Vermont is an ideal location for this type of impact investing for several reasons. The benefits for a company to start, grow, and/or stay in the state are numerous. Residents are surrounded by natural beauty, and pursue an outdoor life style 12 months of the year. The state’s food systems are complete and focused on farm to table, taste, and nourishment. Vermont is home to several outstanding colleges and universities, each fostering their version of youth and innovation. Overall, Vermonters enjoy a wonderful lifestyle, analogous to cities like: Austin, Texas; Boulder, Colorado; or Portland, Oregon, to name just a few, which are growing rapidly.
The metaphor of dwarfs standing on the shoulders of giants expresses the meaning of “discovering truth by building on previous discoveries”. We at Vermont Works feel we are standing on the shoulders of many great initiatives sponsored by many local stakeholders – governments, public/private partnerships, universities and colleges, public companies, investment and lending intermediaries, incubators, accelerators, and maker-space platforms, – who have contributed to the development of a vibrant innovation eco-system within the State of Vermont. We are pleased to collaborate with, and compliment the efforts of the outstanding visionaries at the Vermont Center of Emerging Technologies, Fresh Tracks Capital, VSECU, Milk Money and elsewhere.
We are especially gratified to have joined the Board of Advisors of The University of Vermont’s Grossman School of Business’ Sustainable Entrepreneurship MBA Program (“SEMBA”). SEMBA is an accelerated one year MBA program for entrepreneurs who learn how to create profitable, sustainable, businesses in a world undergoing transformational change from leaders representing a master class of sustainable, entrepreneurial enterprises, including Ben & Jerry’s, Burton Snowboards, Cabot, Keurig Green Mountain, and Seventh Generation.
By participating in SEMBA we are extending our commitment to supporting innovation and sustainability backwards through the business creation chain from our investment in existing early and growth-stage companies, a new business accelerator in conjunction with BTV Ignite, to the enlighten entrepreneur – people not content to do things the way they’ve always been done – the disrupters, innovators and visionary entrepreneurs. Leaders who think differently and seek a better way to do business, and who are ready to embark on a business education that will prepare them to live differently, lead differently, and profit differently.
Please take time to review the University of Vermont’s SEMBA website below and discover more about this transformational program.
I am proud be part of the solution, are you? If not, get involved – investigate, participate, and invest yourself for maximum impact and return.