William Doll is the founding partner of The Syneidesis Group, a community of investors who seek a deeper understanding of the trends (including sustainable) affecting our world. Interestingly, some of his previous work included collaborating with Emmy Award winning vérité filmmaker Slawomir Grunberg. William met his wife of 17 years, Ekaterina, while an exchange student in St. Petersburg, and has been blessed with 2 young boys.
William, as founder of The Syneidesis Group, could you explain in simple terms what Impact Investing is?
My definition of Impact Investing is any investment that produces both a financial return and does good in the world. I love the motto: ‘Do good while doing well’. The idea here is that the Capital Markets should be a vehicle for both making money and solving the major challenges facing humanity. This is also why some people call Impact Investing Solutions Based Investing. There are plenty of examples, such as: Fair Trade Coffee (which pays producers an above-market “fair trade” price provided they meet specific labor, environmental, and production standards) and Renewables (solar, wind, plus biomass and recycling waste into energy).
What inspired you to get involved in this field?
Apollo 9 astronaut Russell Schweickart once said:
When you go around the Earth in an hour and a half, you begin to recognize that your identity is with that whole thing.
For those who haven’t been to space, I imagine that having kids instills a similar kind of epiphany. You realize that you are not the center of the universe and the rest of your life becomes devoted to caring for someone else. Today, as a father of two little boys, I can’t imagine living a life not devoted to finding solutions that address the major challenges facing humanity.
It can seem overwhelming when you start really diving into the challenges (income inequality, population growth, urbanization, sanitation, waste, etc), but there are plenty of challenges facing humanity that people are solving today: The truth is that we can not only solve these but find a way to make them profitable as well. Philanthropy will always have a place in the world, however the largest opportunities can both solve a major challenge and produce a financial return.
It has been said that this may be a period in which there will be the ‘greatest transfer of wealth in history’. Could you explain what is special about this generation, and the potential it has for positive change?
There are actually two transfers of wealth occurring. One from the Greatest Generation {those who survived the Great Depression and fought in WW2} to the Baby Boomers (~$12 Trillion) and a second transfer from the Baby Boomers to Gen X & Gen Y (~$30 Trillion) within the next 20-30 years.
There is no doubt that the Impact investing movement is being driven in large part by Generation X and Y. I was just at the Nexus Youth Summit in DC and it is an awesome sight to behold the influence, drive, and passion of the “under 40” crowd. What makes this group special: the shear amount of capital this group has and will inherit is unprecedented, and the fact that these investors simply expect more from their capital. It is no longer satisfactory for an investment to simply generate a financial return, these generations also expect social and environmental returns (triple bottom line).
Can you explain the shift you are seeing due to forward-thinking companies, who recognize the changing investor landscape?
More and more companies are realizing the economic benefit to corporate sustainability, which is the brother of impact investing. Companies that are implementing a true corporate sustainability program – Environmental, Social, and Governance (ESG) – strategy may have a long term advantage over those that do not (such as increase in market share, greater energy efficiency, and higher profits).
The knock on effect is that their supplier companies are adopting these policies also including transparency and strong governance. There is less corruption, fewer places to hide underpaid employees – which results in fairer pay – and a generally happier society. The businesses that get this model right will satisfy the demands of both traditional and impact shareholders. Beyond that, the long term benefits of this trend point to global economic growth, a strong middle class, and more innovation.
How can people, from accredited investors to everyday citizens, get involved in investing their resources not only for return but also for social good?
The channels for retail investors to get involved in the impact space are not yet well established. In 2006, The internet giant eBay acquired a small startup called MicroPlace, and really opened the door on the emerging market of small-scale lending. The idea was to enable the average investor to lend small amounts ($50 to $100) to enterprises in the developing world at a 1 to 4 percent return. In January 2014 eBay closed the operation citing a lack of wide-scale adoption. However, this bold step on eBay’s part has set a precedent for what undoubtedly will come. There will be ways for average investors to make moderate returns while doing good.
Until then, the next best idea is to choose an investment management company dedicated to Impact Investing. Cornerstone Capital Inc. is a pioneer in this field under the leadership of Wall Street veteran Erika Karp. Her mission is to create the world’s first genetically sustainable globally integrated financial services company. In short, if you want your investments to do good in the world, investing into socially minded funds is the best option. If the minimum investment threshold is too high, you can invest in individual companies on the stock market that are part of the solution.
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