{"id":1444,"date":"2018-03-21T12:58:34","date_gmt":"2018-03-21T16:58:34","guid":{"rendered":"http:\/\/blog.uvm.edu\/si-mba\/?p=1444"},"modified":"2018-03-21T12:58:34","modified_gmt":"2018-03-21T16:58:34","slug":"wellington-management-talks-about-investing-in-a-better-future","status":"publish","type":"post","link":"https:\/\/blog.uvm.edu\/si-mba\/2018\/03\/21\/wellington-management-talks-about-investing-in-a-better-future\/","title":{"rendered":"Wellington Management Talks About Investing in a Better Future"},"content":{"rendered":"

This post was written by Shari Siegel ’18<\/em><\/p>\n

According to the Global Impact Investing Network (the \u201cGIIN\u201d), the financial markets will have to provide several trillion dollars annually<\/em> if the U.N. Sustainable Development Goals (\u201cSDGs\u201d) are to be met by 2030.[1]<\/a>\u00a0 Thus far, impact investing has been mainly the realm of a small group of institutional and wealthy individual investors, but that situation is now poised for change.\u00a0 The GIIN\u2019s new framework is calling for impact investing to be \u201cmade more accessible by developing new products suited to the needs and preferences of the full spectrum of investors (from retail to institutional) and to accommodate the capital needs of various types of investees.\u201d[2]<\/a><\/p>\n

\"\"<\/p>\n

The Sustainable Innovation MBA Class of 2018 started Module 4 of its program with a visit from Meredith Joly, Christopher Kaufman, and Quyen Tran from Wellington Management arranged by Professor Charles Schnitzlein.\u00a0 The Wellington trio came to discuss how the privately held Boston-based investment manager is making impact investing a viable option for a larger pool of investors.<\/p>\n

First, A Little Vocabulary.\u00a0 \u201c<\/em>Impact investing\u201d differs from \u201cESG investing.\u201d\u00a0 ESG investing is a strategy in which investments, usually equity in publicly traded companies, are chosen because the issuers have environmental, social or governance practices that align with the investor\u2019s values; the companies in question may or may not offer products or services that are intended to address social or environmental problems.\u00a0 (For example, an ice cream manufacturer that is well known for its advocacy of better environmental practices and equality issues may be an ESG investment, but wouldn\u2019t be an impact investment.)\u00a0 Impact investing is a strategy in which the investor chooses investments with a view to addressing specific social and environmental issues.\u00a0 The core businesses of the companies that the impact investor invests in are specifically aimed at solving one or more social or environmental problem.\u00a0 (For example, a healthcare technology company that enables people in remote locations to have \u201cvirtual\u201d doctor visits so that they can obtain otherwise unavailable or cost-prohibitive care could be an impact investment.)\u00a0 The social and environmental issues impact investing usually attempts to address are subsets of the SDGs, including addressing adequate housing, access to education, healthcare, climate, water resources, etc.<\/p>\n

Traditionally, impact investing has largely been done through large private investments in private companies.\u00a0 Such investments would normally be limited to institutional investors or Very or Ultra High Net Worth individual investors (i.e., investors with more than $5 million to invest).\u00a0 The Wellington team came to talk about how impact investing can be done through selecting publicly traded stocks, bonds and mutual funds, which are much more liquid and have much smaller minimum investment requirements than private equity, thus making such strategies more widely accessible.<\/p>\n

The SDGs establish a common language for NGOs (non-governmental organizations), foundations, governments and private investors as they each work in their own ways to solve the world\u2019s most pressing problems.\u00a0 Supported by its large, centralized research team, Wellington has identified hundreds of publicly traded securities that provide capital for companies and projects whose core businesses and missions address SDGs in one of three impact themes: life essentials (housing, clean water\/sanitation, sustainable agriculture\/nutrition, and health), human empowerment (education and job training, digital divide and financial inclusion) and environment (alternative energy, resource efficiency and resource stewardship).\u00a0 As the manager of its own equity and bond funds and subadvisor for third party funds, Wellington monitors and measures not only the financial performance of the securities in its portfolios but also the social and environmental impact the companies and projects are having to ensure that investor goals are being achieved.\u00a0 This is an example of one more way business is being used as a force for good.<\/p>\n

[1]<\/a> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Global Impact Investing Network, Roadmap for the Future of Impact Investing: Reshaping Financial Markets (March 2018) at 9.<\/em><\/p>\n

[2]<\/a> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Id. at 49.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This post was written by Shari Siegel ’18 According to the Global Impact Investing Network (the \u201cGIIN\u201d), the financial markets will have to provide several trillion dollars annually if the U.N. Sustainable Development Goals (\u201cSDGs\u201d) are to be met by 2030.[1]\u00a0 Thus far, impact investing has been mainly the realm of a small group of … <\/p>\n

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