Impact investment management firms seeking to align more portfolios toward sustainability and racial equality are participating in a summit for diverse leaders in climate and agriculture.
The Croatan Institute, a nonprofit research and advocacy organization that focuses on how to use finance "to build social equity and ecological resilience," will host the conference bringing together farmers, climate activists, academics, officials and investment experts next month in Durham, North Carolina. The sponsors include the Sierra Club Foundation, The Schmidt Family Foundation's 11th Hour Project and Boston-based Trillium Asset Management, which has $4.8 billion in assets under management across its funds and wealth management business. Panels at the event will discuss "the role of BIPOC farmers in the future," the "catalytic" place for private capital in "climate-smart agriculture" and "climate justice investors," according to the agenda.
"People are more and more aware that their choices have impacts. Here we like to say that every action you take and every investment you make has impact," said Alex Jovanovic, an investment manager and head of Trillium's private client division. "Financial planners in particular need to be aware of this, because their clients are more and more aware of these issues and are going to be asking the question of how they can do this in their portfolio."
Regulatory scrutiny from the Securities and Exchange Commission and political backlash from conservative Republicans have led some firms to shut down certain funds tied to ESG data. The shareholder advocacy groups and impact investment managers that have been implementing forms of ESG criteria for decades have shown no sign of abandoning the work, with some citing further progress in public company proxy fights this year despite the headwinds.
With the urgency to fight climate change increasing and certain groups facing "distinct challenges tied to the history and legacy of the United States," there's a "really significant role for impact investors" to play in the conversation, according to Sharlene Brown, a senior fellow at Croatan Institute who is the director of its program on racial equity, economics, finance and sustainability. Brown and collaborators have launched financial coaching sessions for Black, Hispanic, Asian American and other minority farmers and created a comprehensive guide to racial equity investing.
"There's a conversation to be had about the appropriate type of capital that needs to be brought to bear on these types of investments," Brown said in an interview. "There's a lot of innovation that can come out in the next five to 10, 15 years as we meet people where they are in the ecosystem."
With $115 billion in clean energy infrastructure investments since President Joe Biden took office through the Inflation Reduction Act and other methods, the discussion about accessing capital takes on even greater relevance, Brown noted.
Speakers from the U.S. Department of Agriculture's Farm Service Agency and the North Carolina Natural Resources Conservation Services will appear at the conference alongside those of Sierra Club, impact wealth and investment management firm Veris Wealth Partners, sustainable food service Sankofa Farms and the nonprofit Black Family Land Trust. Renee Morgan, the social justice director of San Francisco-based Adasina Social Capital, the impact investment management firm led by CEO Rachel Robasciotti, was one of 16 members of the agenda committee for the conference.
Trillium sees the event as "one of those continuing conversations" stemming from Croatan's 2021 report on racial equity investing, "Capital at a Crossroads," Jovanovic said. Many potential innovators "don't have access to the friends and family round of capital" because "the access and opportunity for capital is so uneven" across the country, he said. Organizers aim to find new ideas at the intersection of investing with climate change, food and racial equality.
"We could view those in silos, or we could say, 'Actually, there's a lot of intersectionality with these issues,'" Jovanic said. "We don't want to go down the same road that we've gone down multiple times where we don't widen our lens to make sure that we're bringing everyone with us. … This event is really thinking about, 'How do we bring these communities of color into the conversation?'"
Trillium and a half dozen other firms received letters in August from U.S. House Judiciary Committee Chairman Jim Jordan of Ohio and other Republicans notifying CEOs (in Trillium's case, Matthew Patsky) that their firms are "potentially violating U.S. antitrust law by entering into agreements to 'decarbonize' its assets under management and reduce emissions to net zero — with potentially harmful effects on Americans' freedom and economic well-being."
Trillium is "cooperating to the extent that we can with the information that they've asked for," Jovanovic said. The backlash "has emboldened us to double down on the work that we're doing," he said, noting that the firm has been engaged in similar efforts since founder Joan Bavaria started the firm more than 40 years ago.
"ESG is data, and it would be shocking to me that somebody could argue that less data leads to making better decisions," Jovanovic said.
