ESG

 

“If you want to understand the entrepreneur, study the juvenile delinquent. The delinquent is saying with his actions, "This sucks. I'm going to do my own thing."  Patagonia Founder, Yvon Chouinard, Let My People Go Surfing:  The Education of a Reluctant Businessman   

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As conservationists, we need to be attuned to the fact that we have to explore a wide range of strategies to protect the planet’s natural systems. I look around and see that we are losing ground on many fronts. Forests are vanishing. Coral reefs are disappearing. Water resources are stretched to the limit. We are losing plant and animal species at an alarming rate.”

Mark Tereck, President & CEO, The Nature Conservancy

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"When in the end, the day came on which I was going away, I learned the strange learning that things can happen which we ourselves cannot possibly imagine, either beforehand, or at the time when they are taking place, or afterwards, when we look back on them."

Karen Blixen (Isak Dinesen), Out of Africa

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Privos Capital:  Our View of ESG

As a multi-family office, we believe that global family offices and the financial industry have a critical role in allocating investment capital to address the most pressing social and environmental challenges as defined by the UN Sustainable Development Goals ("SDGs).   One of our firm's core missions and beliefs is to do everything in our power as a global multi-family office to allocate capital to the 17 SDGs and bring other LPs with us on our sustainable journey as true impact investors.  We believe in the vision of Ban Ki-moon, the former United Nations Secretary-General from 2007 to 2016, who said that "We don't have plan B because there is no planet B."

As asset owners, we believe that sustainable investing provides our family office partners with the knowledge and expertise to generate better returns.  We integrate Environmental, Social and Governance (ESG) factors in our investment process at the firm.   As a multi-family office, we invest our enormous power of capital, power, and world-wide influence to effect positive change in our global communities and for our family office partners, owners and stakeholders.  ESG factors are fully integrated into our core business and guide how we work with our LP partners, how we manage our operations and how we conduct philanthropy.   We incorporate ESG data into our investment process.  Our main goal of sustainable investments philosophy is financial returns for our family office partners that meet sustainability/ESG criteria. We allocate to sustainable investments and products across all asset classes, including equities, fixed income, real estate, alternative investments, index solutions and thematic investments. In real estate, we considers sustainability essential in developing and managing investments at our multi-family office.

We are one of the leading multi-family offices active in impact, sustainable investments (SI), ESG, SRI, the 17 SDGs, and philanthropy.  Our approach to ESG goes beyond traditional negative screens.  Our people have an unique world-class approach to sustainability for our family office LP partners that helps us identify investment opportunities world-wide.  Our focus on sustainable competitive advantages and the impact of disruptive change has always incorporated governance .  We believe that the Sustainable Development Goals (SDGs), which went into effect January 2016, present a new opportunity to the global family office financial community to have a new conversation around sustainable investments and global growth.  Thus, as a firm, we will not allocate, invest, or work on a transaction that does not embrace and promote ESG factors.   We believe it is our mission as a multi-family office and allocator of capital to help increase the flow of private capital to reach SDG-related, ESG, SRI and Impact related investments around the world.  We will only work and partner with those family offices, asset management, wealth management, investment banks, and fund managers who share share our vision to build sustainable investment solutions to meet these vital goals that can truly save our planet. 

For those of you new to ESG, on September 25, 2015, the 194 countries of the UN General Assembly adopted the 2030 Development Agenda titled Transforming our world: the 2030 Agenda for Sustainable Development. Following the adoption, UN agencies under the umbrella of the United Nations Development Group decided to support an independent campaign to help communicate the agreed Sustainable Development Goals to a wider constituency.  Known as Project Everyone, the independent campaign introduced the term Global Goals and was supported by corporate institutions and other International Organizations. 

As a multi-family office, Privos Capital is taking the lead to help accelerate SDG Investing for global family office LPs on the themes of Sustainable Development Goals (SDGs).  Family offices must state their commitment to contributing to the 2030 Agenda for Sustainable Development and to be "a catalytic driver for positive change."   Family offices must provide liquidity and leadership to support the 17 SDGs which represent the "largest societal challenges of our time in our work and investments."  Naturally, the more capital that is allocated to the 17 SDGs, the lower the overall cost of capital for those innovating in the sustainability around the world, which is one of the core missions of our multi-family office.

According to MSCI, ESG Investing is a term that is often used synonymously with sustainable investing, socially responsible investing, mission-related investing, or screening.  ESG factors refers to industry specific key issues such as climate change, human capital and labor management, corporate governance, gender diversity, privacy and data security, among others. A mining company and a financial company, for example, may face different key ESG risks and opportunities.  ESG is growing in significance amongst both institutional and retail investors. The practice of ESG investing began in the 1960s as socially responsible investing, with investors excluding stocks or entire industries from their portfolios ("negative screens") based on business activities such as tobacco production or involvement in the South African apartheid regime.  Today, ethical considerations and alignment with values remain common motivations of many ESG investors but the field is rapidly growing and evolving, however, as many investors look to incorporate ESG factors into the investment process alongside traditional financial analysis. 

"ESG investing is the consideration of environmental, social and governance factors alongside financial factors in the investment decision–making process," according to Remy Briand, Managing Director of MSCI ESG Research.  Privos believes that as a global society, we are in the middle of a $30 trillion intergenerational wealth transfer from baby boomers to their children. And those kids - not really millennials only, but people from 25 to 40 years old - simply think about their investment decisions differently.

Privos Capital embraces the principles of UNPRI.   As a multi-family office, our people participate in every leading global ESG, SRI and SDG investor conference in the financial industry including US SIF, SOCAP, Phoenix Capital, and others.  We encourage all family offices both to start attending ESG and impact Investing events and to increase allocations to the 17 SDGs.  For instance, our CEO was in attendance recently at the Peace Palace in the Netherlands for Phoenix Capital's Impact Summit Europe, and regularly attends US SIF, SOCAP, PRI and other ESG events.  Speakers at Impact Summit Europe included the world leaders in impact investing, the true "Lions of Sustainability," as we like to call them, including Al Gore (Generation), and representatives from APG, FMO, PKA, MN, PGGM, OECD, ASN, GIIN, EIF, Natixis, DNB, Storebrand, Tridos, Unilever, Zurich, World Economic Forum, and others.  

As a multi-family office, we believe it is our moral imperative to increase the capital flows into impact, sustainability, ESG and the 17 SDGs.  If Blackrock and Calvert can both have a seat at the table, despite having different views of Impact, your family office will be welcome as well.  Remember family offices are the last bastion of private capital that is desperately needed in the sustainable investing.

We urge your family office to attend the upcoming PRI In Person Conference taking place from September 12-14 in San Francisco, California.  Here is a link to register for the event:  https://www.unpri.org/events/pri-in-person

The 17 SDGs are listed below:

Goal 1:  No Poverty

Goal 2:  Zero Hunger

Goal 3:  Good Health and Well-being

Goal 4:  Quality Education

Goal 5:  Gender Equality

Goal 6:  Clean Water and Sanitation

Goal 7:  Affordable and Clean Energy

Goal 8:  Decent Work and Economic Growth

Goal 9:  Industry, Innovation and Infrastructure

Goal 10:  Reduced Inequalities

Goal 11:  Sustainable Cities and Communities

Goal 12:  Responsible Consumption and Production

Goal 13:  Climate Action

Goal 14:  Life Below Water

Goal 15:  Life on Land

Goal 16:  Peace, Justice and Strong Institutions

Goal 17:  Partnership for the Goals

Privos Philanthropy

As a multi-family office, we are also passionate activists and thought leaders in global family office philanthropy.   Through our philanthropic giving, we partner with family offices active in philanthropy who execute on the vision of making the world a better place for all our children and their future.  Our people embrace activism and employ private industry experience to effectuate global change for our the philanthropic initiatives of our multi-family partners.

We work to finance or secure financing for our own global philanthropic initiatives and those of our multi- family office LP partners by building international go-fast, creative collaboration between business, NGOs, DFIs, government, and the private sector investors to address the urgent social, economic, health, and educational development needs of the global community.  

Family offices around the world practice vast philanthropic giving and activism to tackle a myriad of vast global issues including but not limited to job creation, clean energy, LPG, deforestation, global warming, soil erosion, environmental problems, Ebola, health care, cancer, family values, small scale farming, reforestation, education, breast cancer, Alzheimer’s, biomedical research, molecular oncology research, agricultural production, health clinics, art, music, culture, fighting genocide, public health vaccination, climate change, road safety, antismoking, agricultural development, clean water, anti-poverty, social justice, mental illness, bipolar disorders, psychiatric research, ocean health, healing brain injuries, prison recidivism, empower women, women’s equality, child abuse, and domestic violence against women.

Our philanthropic work embraces the 17 SDG, SRI, sustainability, ESG, and Impact Investing best practices.  We help the marginalized and those thought to be unemployable by creating jobs and building new economies.   If your family office is interested in philanthropy, or increasing your philanthropic involvement by partnering with other family offices, we want to hear from you.

As a starting point reference to help you increase your philanthropy, we encourage you to study the following list of foundations, non-profit funds, associations, NGOs, universities, and DFIs to understand the current eco-system of philanthropy as we see it today and to inspire your family office to become more involved.  

The Clinton Foundation

The Gates Foundation

The Susan Thompson Buffett Foundation

The Warren Buffett Family (Giving Pledge)

The Nature Conservancy

The Salvation Army

International Medical Corps

Handicap International

Unicef

Paypal (relief efforts for Nepal)

Mercy Corps

Catholic Relief Services

Habitat for Humanity International

Global Giving

American Jewish Joint Distribution Committee

Smallholder Farmers Alliance (SFA)

J/P HRS (Sean Penn)

Doctors Without Borders

The Nature Conservancy (TNR)

World Wildlife Foundation

Save The Children

LRNG

Show Me Campaign

Oxfam

World Vision

United National World Food Program

Samaritan’s Purse

NWP (National Writing Project)

The MacArthur Foundation

Tony Awards Excellence in Theater

November

Enough Project

The Vaccine Alliance (Gates Foundation)

United Negro College Fund

Theodore Stanley Family Foundation

Broad Institute (MIT and Harvard)

Illumination Fund (Tisch Family)

Costume Institute at the Met

Young Woman’s Harlem Leadership Network

The Aspen Institute

People for the American Way

Center for American Progress

Adaptive Eyewear

Girls Who Code

Embrace Innovations

Raw for the Oceans

UNICEF Innovation Labs

CrowdRise (Edward Norton & Shauna Robertson)

David Geffen (Lincoln Center)

Edutopia (George Lucas)

University of Chicago Lab

World Wildlife Fund (Leonardo DiCaprio)

The Natural Resources Defense Council,

International Fund for Animal Welfare

HeForShe Movement (Emma Watson)

Faces of Kibera

Uweza Foundation (Rooney Mara)

Oxfam

96 Elephants (Katie Lee)

Breast Cancer Research Foundation (Evelyn Lauder / Kinga Lampert)

Young Eisner Scholars (Eric Eisner)

Robin Hood Foundation (Barry Sternlicht)

Juvenile Diabetes Research Foundation

Naked Heart Foundation (Natalia Vodianova)

London Fashion Week

ProjectArt (Adarsh Alphons)

Enstitute (Shaila IttyCherian & Kane Sarhan)

FITE (Financial Independence Through Entrepreneurship (Jane Worland)

Echoing Green Fellows

World AIDS Day (Tim Cook / Apple Computer)

Pencils of Promise (Adam Braun)

Red Cross

Avon Foundation

Salma Hayek Foundation

Kering Foundation (Francios-Henri Pinault / CEO Kering, owners of

Fashion brands Gucci Saint Laurent, and Bottega Veneta)

Prep For Prep (Diahann Billings Burford)

SVCF(Silicon Valley Community Foundation) (Jan Koum)

1/1/1 Program (Marc & Lynne Benioff / Salesforce.com)

SVCF - (Priscilla Chan & Mark Zuckerberg)

San Francisco General Hospital (Priscilla Chan & Mark Zuckerberg)

LACMA (Nicole Avant)

SVCF –(Nicholas & Jill Woodman / GoPro)

Sean Parker(Napster / Facebook)– Stanford University

Rome Trevi Fountain Restoration Project (Fendi Family)

Rome Colesseum Restoration Project (Diego Della Valle / Tod’s)

Rome Spanish Steps Restoration Project (Bulgari)

Venice Rialto Bridge Restoration Project (Renzo Rosso / Diesel)

Solemo Umbrian Village Restoration (Brunello Cucinelli)

Chime for Change (Salma Hayek, Frieda Giannini, & Beyonce Knowle)

UNICEF

Pro Mujer

Equality Now

Four Generations Project Kenya (Kuki Gallmann & Sveva Gallmann)

Care

Save the Children

Lutheran World Relief

Jewish Federations of North America

SOS: Children Villages International

MAP International

International Relief Teams

Feeding America

United Way

Task Force for Global Health

American National Red Cross

Food for the Poor

Goodwill Industries

YMCA

American Cancer Society

St Jude’s Children’s Research Hospital

 

Sources:

New York Times

Forbes

T&C 50 

Wiki (which we love)