Category: Social Mission

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Reflections on Winning The Total Impact Portfolio Challenge

This post was written by Alyssa Stankiewicz ’19, and co-written by Andrew Mallory ’19

EDITOR’S NOTE: A team of five students from The Sustainable Innovation MBA program recently took first place in the Wharton-sponsored Total Impact Portfolio Challenge, beating a field of finalists from Yale, Columbia, Fordham, and Boston University. Read more here.

When I came to this program in August 2018, I had never even heard the term “impact investing.” I planned to focus my learnings on innovations in social justice and sustainable agriculture. I dreamed of founding a self-sustaining weaving center that provided support and reflection to folks through art therapy. While this is still an eventual dream of mine (stay tuned!), I realized that what really motivated me about this dream was the opportunity to help people.

The mission of The Sustainable Innovation MBA program is using business as a force for good in the world, also described as “doing well by doing good.”  Through the mentorship and encouragement I received from Dr. Chuck Schnitzlein, I began to realize that not only does the world of Finance provide this same opportunity, but I possess a natural knack for the work involved. He presented us with two extracurricular opportunities to test and demonstrate our skills and studies. The first project revolved around developing an impact strategy for the UVM Endowment (for more on that, see this article), and the second was a Wharton-sponsored impact investing competition called the Total Impact Portfolio Challenge.

The competition was stacked, to say the least. 26 teams from 19 business schools including Yale, Columbia, Booth (Chicago), and Wharton (Penn) entered the competition, and with this being just the 5th cohort of our Sustainable Innovation MBA program, our team was ecstatic to find out in March that we’d been selected as Finalists. We had spent months taking extra classes with Dr. Schnitzlein in Portfolio Management and Evaluation, researching the companies who achieved “best in class” accolades, and developing our investment philosophy and strategy in our copious free time (“copious” might be an exaggeration). When they announced we won at the live competition in Philadelphia on May 1, we were completely over the moon.

We like to think that we had a competitive advantage because each of our professors integrates sustainability holistically into every single course. We learned about Entrepreneurial Business Design, Systems Thinking, and Cost Models from a sustainability perspective, so we were more fully prepared to incorporate sustainability into every piece of our portfolio.

The Total Impact Portfolio Challenge provided us with two fictitious investor profiles from which to choose, and our team selected a Family Office who wanted to achieve multi-generational wealth and sustainable impact in line with five themes, which we matched to the UN Sustainable Development Goals (SDGs). Our team took a unique and bold approach: we successfully invested the entire portfolio in companies and funds that are going beyond minimizing the bad; instead, each of our investments contributes to developing solutions for the greater good. We highlighted the innovations of Mary Powell at Green Mountain Power and the Reinvestment Fund’s success in the City Mission Project. We developed methods for measuring impact and adapted our findings to the unique characteristics of the various asset classes. Peter Seltzer even coined the SI-MBA Score, which goes beyond traditional ESG scoring systems to incorporate materiality. This is because, as we learned in our Strategic Corporate Social Responsibility course (and which was affirmed in this study written by Khan, Serafeim, & Yoon), companies that focus on the sustainability issues that are most material to their business actually see improved financial performance over the long term.

Where do we go from here?

I personally want to find ways to help accredited and non-accredited investors deploy their finances in ways that are more meaningful to them. I have a passion for efforts to democratize investment opportunities, and I’m working on an idea that incorporates my Linguistics background with my Finance interests to create a more effective system for financial literacy education. I look forward to exploring opportunities in place-based investing and community funding models as avenues to strengthen the resilience of local economies. Find me on LinkedIn!

Photo credit: Chris Kendig

Emily came to The Sustainable Innovation MBA program passionate about opening up venture capital investment to women and other underrepresented founders. Through projects studying everything from community capital initiatives to equity crowdfunding policy to this challenge on integrating materiality into ESG scores, she sees increasing opportunities to promote a more sustainable form of capitalism for investors and entrepreneurs. After the program, she is seeking a career in impact investing and hopes her involvement can promote responsible investment opportunities in the industry.

For Andrew, this challenge was a perfect blend of his two professional passions: finance and sustainability. Coming from a traditional finance background, he sees how important it is for impact investing and ESG integration to continue to evolve and grow, and he is encouraged by how many financial institutions are now incorporating ESG into their strategies. After graduation, Andrew is interested in pursuing public and private equity research, specifically analyzing companies who are embedding sustainability initiatives into their core operations to see how impact alpha can mitigate risk and provide long-term growth.

 Peter came to the program as a CPA with ten years of experience. Throughout his career, he has gravitated towards opportunities to support social causes, including serving on the boards of two non-profits and working for three years at The Food Trust, a Philadelphia based non-profit. While here, he discovered a passion for the Sustainable Accounting Standards Board (SASB) and began a certificate program in the fundamentals of sustainable accounting. The group utilized his research in developing the SI-MBA Score, which was a differentiating factor in our presentation. After graduation, he is pursuing opportunities where he can incorporate his SASB knowledge to help investors generate greater impact with their investments.

Maura, coming from the client services and business development side of the investment industry, saw the demand for responsible investment solutions from young investors and European clients. She hopes to use the skills developed during her SI-MBA experience and her involvement in the Total Impact Portfolio Challenge to re-enter the field and meet the needs and wants of the industry demand. Planting roots in Vermont, she looks forward to growing the responsible investing industry presence in the state.

We had great support from all of our classmates, but special acknowledgement (in no particular order) goes out to Andrew Oliveri, Alyssa Schuetz, Ryan Forman, Elissa Eggers, Caitlyn Kenney, Esteban Echeverría Fernández, Alexa Steiner, Emily Foster, Jeffrey Lue, Matt Iacobucci, and Keil Corey. In the spirit of The Sustainable Innovation MBA, this was truly a collaborative effort, and I believe that’s what ultimately gave us the competitive advantage. I’m personally looking forward to seeing where we go from here, and I wish good luck to next year’s cohort!

For other publications on this challenge and our approach, please see the initial post in the SI-MBA Review, as well as articles in CNBC, UVM, Poets & Quants, Forbes, and the Wharton Social Impact Initiative.

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Breaking News: Sustainable Innovation MBA Team Wins Wharton’s Total Impact Portfolio Challenge

A team of Sustainable Innovation MBA students has emerged from an elite group of finalists as the winners of the Total Impact Portfolio Challenge, sponsored by the Wharton School of Business at the University of Pennsylvania. The team was comprised of Class of 2019 students Alyssa Stankiewicz, Pete Seltzer, Emily Klein, Maura Kalil, and Andrew Mallory. Their faculty advisor and coach was Prof. Chuck Schnitzlein.

More: Read CNBC’s coverage of the Challenge, featuring our team

The Total Impact Portfolio Challenge involved creating and analyzing a portfolio that met risk, return and ESG (Environmental, Social, and Governance) impact investing objectives. The team presented their work in Philadelphia on May 1 and 2.

The other finalists in the competition included Yale, Columbia, Fordham, and Boston University. Our group was named one of the “Final Five” back in late-March from an strong field of 25 teams that included entrants from the University of Chicago, Cornell, Georgetown, NYU, Wharton, MIT, and Northwestern.

This is a significant accomplishment, and an important milestone in the history of The Sustainable Innovation MBA program.

Beginning third from left, Emily Klein, Alyssa Stankewicz, Andrew Mallory, Maura Kalil, and Peter Setzer.
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The Mission, and The Team

This post was written by Cameron McMahon ’19.Cameron served 4 years active duty in the US Marine Corps infantry, deploying twice.

There is a lot of discussion about mission-driven businesses and millennials being attracted to working for them.  Along with this come conversations about how to build up your people and create teams that are greater than the sum of their parts. This has been causing me to reflect on my time in the U.S. Marine Corps infantry and how we built and managed teams.  Shared hardship tended to be the element which rapidly allowed the willingness to form for us to perform well together.  As I am working on starting my farm business and considering best practices for finding and hiring people to help build the business, I am trying to think deeply about the type of culture I want to create. 

In the USMC the mission was always provided to us and there was a clear rank structure and roles within that which existed for eliminating uniqueness. There were jobs to be performed and the expectation was that you performed your role and anything else simply wasn’t an option. Extremely high rates of burnout are the norm for junior ranks with this treatment.  However, we accomplished the mission and pushed our limits far beyond what we had previously thought possible. We as a human community are facing grave threats in the next several decades that will decide whether or not we are able to continue living on this planet. It is difficult to find the language in a civilian setting to pull the best lessons from the USMC. How to translate the brutal methods and speech for rapidly binding teams together who are willing to work through pain, exhaustion, and fear to run through calf- deep mud filled with mines toward the multiple machine guns firing at you and your friends to a business setting?

I don’t pretend to have any firm answers to these questions. In the process of trying to figure it out though, some things have been clarifying. Motivation is encouraged when people are able to feel a sense of ownership over the process as well as the results.  Having a sense that you are part of something larger than yourself and working toward a common goal that serves humanity in useful ways helps to make the day to day tasks required for job performance gain deeper meaning and purpose. Hope works better than fear for motivating people to perform at a consistently high level over time. 

Facing the myriad challenges from threats such as climate change cannot be done effectively if people don’t feel as if a better future is possible and their actions matter in creating it. Just as there is no place for cowardice on the battlefield and those who are unable to push through their natural hesitation to endanger themselves are removed from roles where they will get others killed; it is necessary to identify those in an organization who are not bought into the mission and cull them from the team. To create a culture of willing high performance there should be rewards for the victories and the failures in order to encourage everyone to stretch themselves and not fear failure. Great ideas won’t come out if people are afraid of the consequences of failing.  An organization, culture or person who is unwilling to change is more of a problem than a solution.  As Darwin said, “The species best able to adapt is the most likely to survive.” and as we say in the Corps, “Improvise, adapt and overcome.”

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Impact Investing for a Greener UVM

This post was written by Peter Seltzer ’19, Andrew Oliveri ’19, Maura Kalil ’19, and Matt Iacobucci ’19

At the beginning of the academic year, Finance professor Dr. Chuck Schnitzlein introduced an opportunity for us all to spearhead the first Sustainable Innovation MBA impact investing project. The goal of the project was to show the University of Vermont Treasurer’s office how to build a short-duration fixed income impact portfolio that meets its fiduciary and financial constraints.

Given these parameters, our challenge was to build a portfolio comprised of socially and environmentally responsible fixed-income investments that would contribute to making a positive global impact in the areas of our choosing. A group of thirteen Sustainable Innovation MBA students* have been working collaboratively to come up with investment criteria to build out this potential portfolio of bonds for consideration. Through working closely with Chuck, the Sustainable and Responsible Investing Advisory Council (SRIAC), and the UVM Treasurer’s Office, we are now positioned to make our recommendations to the investment manager to implement this strategy.

*Andrew Mallory, Andrew Oliveri, Alyssa Schuetz, Alyssa Stankiewicz, Esteban Echeverria-Fernandez, Emily Klein, Keil Corey, Maura Kalil, Matt Iacobucci, Noelle Nyirenda, Peter Seltzer, Ryan Forman, Tor Dworshak (in no particular order — EDITOR)

Coming into The Sustainable Innovation MBA program, many of us were novices to the emerging field of impact investing. To build our knowledge and immerse ourselves in this new subject, we began organizing and attending weekly learning sessions. Our resources have included articles and research tools, but most significantly, the book The Impact Investor by Jed Emerson, a prominent leader in this field. These resources provided the foundation for our impact investing toolkit that has aided us in determining our impact objectives and screening criteria for the project. Next, we had to learn the tools that investors use to search for and make judgments on assets in real-time.

We trained ourselves to use the Bloomberg terminal, a powerful tool for investors in providing access to real-time financial data. Each member of the impact investing team completed the built-in Bloomberg Market Concepts digital learning tutorial, with particular attention focused on fixed income securities to build out our general investing toolkit. While identifying whether each bond under consideration held the financial metrics needed to fulfill the fiduciary obligations required of the portfolio for the University, we also used the ESG terminal function to help objectively measure the non-financial impact that each bond holds. The ESG function provides non-financial Environmental, Social, and Governance metrics for companies and bonds, which proved to be an invaluable tool for our research process.

While the whole impact investing team was expected to have a solid understanding the “impact” side of the equation, a subgroup of the team has been taking additional advanced finance classes with Chuck on fixed income investing and portfolio management to master the “investing” side. There, this subgroup has been learning key concepts to help the whole team take the next steps towards building a portfolio that is financially sound and well up to the University’s investing standards. This diversification within our team allows for an overall focus on portfolio impact, while the more specialized subgroup could also incorporate the principles of a financially successful portfolio that was consistent with the investment policy statement and integrated impacted criteria.

During our early coursework in The Sustainable Innovation MBA, we learned how many companies have been aligning their business models and sustainability initiatives with the United Nations’ Sustainable Development Goals (SDG). Thus, we wanted to incorporate the concept of impact learned through the program’s curriculum to maximize our portfolio’s impact. As a group, we brainstormed SDGs that were not only important to us but those in which we saw the most potential for global impact. From that list, we selected three SDGs that we determined were best aligned with UVM’s mission and brand image: Clean Water & Sanitation, Affordable & Clean Energy, and Gender Equality.

The first SDG we focused on was ensuring the availability and sustainable management of water and sanitation for all. We looked to find issuers who not only decreased their water usage relative to competitors but also considered the ‘usage relative to revenue’, which was found to be a helpful feature of the Bloomberg terminal. Similarly, it was important for us to find issuers who not only were mitigating negative impacts but rather having a positive impact with regard to clean water stewardship efforts. With a number of UVM students intimately connected to Lake Champlain and its surrounding ecosystems, we realize clean water to be a paramount goal of our investment council.

The second SDG we focused on was ensuring access to affordable, reliable, sustainable and modern energy for all. We determined that impact within this goal can be derived from companies producing sources of clean, affordable and renewable energy, as well as companies sourcing their energy from renewable providers. Companies that our investment council considers for investing need to be making investments in clean technology and energy efficiency, or investments in affordable energy storage technology. In addition, a company meets our criteria if they have a large green power purchase agreement, or is in a contract to source a majority of their energy from a clean, renewable energy source.

The third and final SDG we focused on was achieving gender equality and empowering all women and girls. This SDG was particularly important to our group as many of our group members are part of The Sustainable Innovation MBA Women For Change group on campus. The team developed the following three objective criteria that the corporations offering the bonds should meet for portfolio consideration: female representation in senior management (at least 33%), proven efforts to create equal opportunity for female employee advancement, and women in leadership (CEO, Founder, Chair of the Board).

The thirteen of us have learned much through the process of working on this project, and we are grateful for Chuck, SRIAC, and the UVM Treasurer’s Office for the opportunity. This was a completely voluntarily effort outside of the regular class schedule and curriculum of our academic program. We are fortunate to acknowledge that the dedication of time and effort towards this project has rewarded the members of our team with a new degree of fluency in the field of impact investing and perhaps even more rewarding, a feeling of accomplishment for having the potential to make an impact in alignment with the SDGs and UVM.

We look forward to taking the next steps with this project and seeing how the recommendations of our team might be utilized by the University and beyond. As we have with this project, we are excited to continue finding new ways to incorporate our learning from each and every subject we are exposed to here in The Sustainable Innovation MBA program, building out our sustainable innovation toolkit even further as we progress into the new year.

Onward!

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Gender Diversity in MBA Programs: Ahead of the Curve

This post was written by Julie Keck ’19

As part of the 2018-2019 cohort of University of Vermont’s Sustainable Innovation MBA program, I’m proud to sit in a classroom that has an abundance of women. Since its inception, the program has been ahead of the curve in this area. In Years 1- 3, the program busted through the revered 50-50 gender barrier in MBA programs. As the program has grown, the percentage of women in the program has decreased: last year’s graduating class had 47% female attendance, and as I mentioned before, my cohort has 41%.

Percent of Women in The Sustainable Innovation MBA Cohorts

2015 –  55%

2016 – 56%

2017 – 52%

2018 –  47%

2019 – 41%

Important Note: I do not have information on what gender identities alumni and my current co-hort self-report: my numbers are based on my visual identification of candidates based on their pictures on The Sustainable Innovation MBA website. My apologies to anyone I have misidentified.

Although the overall percentage of female candidates has decreased, The Sustainable Innovation MBA program is still over the national average for MBA programs. As reported in Financial Times earlier this year, the Graduate Management Admission Council found in 2016 that only 37% of applications to full-time two-year MBA programs were submitted by women globally. The number is better in the US (42%) than in Europe (36%) and Asia (32%.) The primary barrier to accepting MBA school offers reported by women globally was financial concerns; for men, the primary barrier reported was that they were waiting for other offers. (Financial Times, 2018).

If you take a look at who’s actually attending MBA programs currently, things are looking up, and The Sustainable Innovation MBA is definitely ahead of the curve. As of 2018, no MBA programs report achieving gender parity, but all of the top 10 schools they surveyed had at least 40% female attendance, with only four schools in the top 25 ranked schools dropping below 30% (Poets & Quants, 2018)

While the presence of women in an MBA program is a good start, whether or not they’re being given all of the tools they need to succeed after graduation is another thing. Research shows (The Wall Street Journal, 2018) that women in the workplace are judged more harshly for their mistakes than men, and they often have to choose between being liked and being respected, and business culture shifts in response to the #MeToo movement (Bloomberg, 2018) may make it even more difficult for business women to get the mentors and opportunities afforded to their male counterparts.

In order to adequately serve female students, forward-thinking MBA programs should include not only instruction and mentorship for female students to help them when they encounter bias and misogyny in the workplace, but make a concentrated effort to move away from male-majority teaching staffs and leadership. Also helpful: having open and honest in-class conversations about what it’s like to be a woman in the workplace; this isn’t only beneficial for women: it’s also useful for the men in the program looking to become great leaders to all they work with.

In order to better support each other and supplement ongoing conversations about gender and leadership, the women in the current Sustainable Innovation MBA cohort have banded together to share experience and resources during extracurricular meetings. They’ve also found support from female alumni, female Advisory Board Members, and female members of the program’s leadership. While we have had several female professors in the first semester, none are currently on the schedule for the second. Seeing reflections of yourself in the mentors you are exposed to is important in the development of ourselves as people and professionals – hopefully as the program grows, so will the numbers of its non-male professors and leaders.

One final note: gender diversity is far from the the only metric of diversity, and I would hope that all forward-thinking, sustainably-minded program are looking for ways to make their programs more accessible to and welcoming of students of color, queer students, non-binary, trans and other gender nonconforming students, students with differing abilities, and other effective minorities, especially since embracing diversity boosts performance (Forbes, 2018.) Here’s to the future cohorts of The Sustainable Innovation MBA that more accurately reflect the world that we live in and seek to lead.

Photo by Brooke Cagle on Unsplash

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How Business Can Support Refugees

This post was written by Ryan Forman ’19

All around the world, refugees are being demonized for various political reasons. There is overwhelming academic and professional research into how much value refugees are to society. Therefore, civil society cannot help them adjust to their new country alone, but business plays a role in supporting them as well. There are multiple ways in which business can help the current refugee situation, but this article is going to focus on two key methods.

The first way that business can help refugees is by investing in refugee-owned/founded businesses. Research shows that refugees are more likely to hire fellow refugees. Because of this investment, businesses can support more than just one refugee; they can help many others get hired as well. One example of an impact investment organization that specializes in investing in refugee-founded businesses is the Refugee Investment Network (RIN). The RIN works to help move private capital to investment in financing of companies that benefit both refugees and their host communities.

An additional way that business can help refugees is by advocating for them in the workforce. Advocating for refugees could be businesses partnering with both governmental and non-governmental organizations that will help individuals get the skills that they need to be more competitive in their local job market. Ernst & Young (EY) in Germany have gone above and beyond in how to support refugees. EY Germany states, “Through EY Cares, the team got funding for a language-learning app, developed by an employee of EY Germany. The team has also supported Kiron, a social start-up providing higher education to refugees, and it has launched a pilot internship program for 10 refugees across EY Germany.” There aren’t many examples of this in the United States, but there is a similar situation here in Burlington at Rhino Foods. Advocating for refugees could be looking at leveraging their past skills to hire them for similar roles in a business that they did in their former country. According to Rhino Foods, “The cultural diversity at Rhino exposes us to each other’s favorite foods, traditions, and life experiences.” Currently, refugees make up 37% of Rhino Food’s workforce.

In our Entrepreneurship class, my group has proposed creating an incubator that would help address both of these methods to help refugees. We think that an incubator, that supports both investment in refugee-owned businesses and partnerships to help refugees get the skills they need to become competitive in their local markets, is a needed organization. I would certainly like to see more organizations place such an emphasis on, as RIN has described, “the greatest social challenge of our time.” Refugees are a boon to the local economy, and it is time for business to empower them.

Photo by Perry Grone on Unsplash

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Shake it Up

This post was written by Elissa Eggers ’19

“In a gentle way, you can shake the world.”

I first encountered this quote by Gandhi on Pinterest last fall, when I was beginning the grad school application process. I found it to be a comforting reminder that although my aspirations were large (telling people you want to save the planet can result in a lot of blank stares), I could find a way to make an impact on my own terms. While, I’ve never been a particularly loud or forceful person, I’ve never lacked conviction. Ultimately, I knew that because I would probably never be the person leading a protest or going door-to-door, I needed to find the avenue that best allowed me to use my interests and abilities to bring about change. This is what drew me to The Sustainable Innovation MBA. I knew it would hone my current skill-sets, provide me with the tools needed to make an impact, and expose me to avenues for change I didn’t yet know existed. In this regard, the program has most certainly not disappointed.

All of our choices have an impact. The key is figuring out in what ways, whether big or small, you can make an impact that is authentic to you.

In the mere 3 months (could it really have only be 3 months?) I’ve been in the program, I’ve met an incredible collection of human beings and been exposed to a plethora of new ideas and viewpoints. The real trick though, I’m learning, is remembering to look up and maintain perspective while trying to take in all this new information coming at you. This program is, without question, fast moving and its relentless pace can cause you to become stuck in the weeds as you focus on checking off the ever-growing collection of deliverables on your to-do list. I’ll admit, this has been me for the past few weeks. I’ve fallen down the rabbit-hole of cost models, business plans, and organizational behavior. However, my drive home from Burlington for the holidays mixed with the magic of Pinterest in periodically resurrecting old, previously viewed pins, provided me with some much-needed perspective.

My background is in retail management and I came into this program to learn more about how the product life cycle (specifically related to clothing) can become more circular as well as how to shift consumer behavior. With Black Friday and the holiday shopping season soundly upon us, I can’t think of better time to reground in why I started along this journey in the first place. What we buy matters, and how we use it can matter even more. All of our choices have an impact. The key is figuring out in what ways, whether big or small, you can make an impact that is authentic to you.

So, my question for you this holiday season and beyond, is how will you shake the world?

Photo by Fancycrave on Unsplash

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The Role of Business in Combatting Homelessness

This post was written by Chris Hynes ’19

Homelessness is a topic that is rarely talked about as a major issue in the realm of business, but in the light of sustainable innovators, there is a major opportunity to make a difference in improving the homeless issue that is rising in America.

With the increasing gap in the distribution of economic wealth in the United State along with the increased cost of living, the poverty line is growing, which is putting the former lower middle-class families in extreme risk of becoming impoverished and economically unstable. If intervention is not taken soon, then there is a huge likelihood that the homeless population in America will increase.

Business has a unique opportunity to aid families and individuals that are suffering from homelessness and empower them in so many ways to move out of their current situation and into a more stable environment. In order to do this, businesses need to take a more social approach and become more socially conscious.

There needs to be more than simply non-profits helping marginalized individuals and families. Non-profits combat homelessness as much as they can, but finding employment opportunities for individuals whose barriers to entry into the workforce are much more skewed than the “normal person” who is applying for a job, is not only difficult, but in most areas, almost impossible. This is due to the fact that a lot of businesses are focused on economic success (which is needed), but lack a genuine social mission.

People generally think that public policy can fix this, but in reality, most government aid is focused on getting people suffering from homelessness off the streets and into housing as fast as possible. Think about it for a second — once a person leaves a homeless shelter and is gifted an apartment, bills begin to pile up. Without a job that is constant enough to provide economic stability, the individual has an extreme risk of falling right back out onto the street. This, in short, is an example of how cruel the poverty cycle is in America.

Now, if there were businesses that were focused on social well-being and provided an empowering job opportunity, then this cycle could be closer to being broken. Having a core competency around inclusive hiring will engage new stakeholders, as well as boost the overall impact that a business can have on a community.  I challenge everyone who is reading this to think more critically about the true impact that their business could be having on a social impact level.