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A framework for making targeted investment decisions

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In today’s climate of environmental, human and health crises, investors are interested in targeted investments that align with trends, shareholder returns and the desires of employees. This new expectation is changing the way organizations deal with internal and external stakeholders.

To be successful as an investment professional, you need to take a holistic view of your investment strategy. Maximizing returns to shareholders is no longer the only measure of success. You, as the CEOs of your portfolios, must respond to the impact of your investments on all stakeholders. This includes the entire supply chain: all levels of employees, suppliers and vendors, customers and community members that surround your business at large. Customers and employees want their investments to improve the lives of people and the planet. As an investment professional, you must be aware and intentional of the societal, environmental, cultural and human impacts of your investments.

Over the next 25 years, more than $ 68 trillion will be transferred from baby boomers to younger generations. This generational wealth transfer propels the millennial generation goal-oriented approach into the mainstream of investment management. Where previous generations trusted advisors with a set-it-and-forget-it mentality, younger generations are more active, demanding more digital communication and value-aligned investment strategies.

It’s important to note that these new investors aren’t just your customers. They are also your employees. Attracting the best investment professionals means creating, strengthening and promoting your company’s value-based culture. It’s time to work the way most of us would naturally prefer: in a way that we can be proud of, not just for our financial performance, but for the impact we have on our children’s future. .

Align your investment considerations
No matter how far you’ve come, as a trusted fiduciary, you can develop a more values-aligned approach by looking at your investments in three dimensions: me, us, and the world. This framework is intentionally simple so that it can become a shared language for your team and your clients. Start by discussing questions like these with your customers:

Me:

  • What do you want your wallet to do for you financially? From the point of view of impacts? What about the legacy you want to create?
  • How do you want your investments to affect the people they affect, including the investor, client, employee and so on?
  • How do holding companies create value for individuals, whether they are clients, employees or investors?
  • What must be true for you to be proud of your investments that we are making?

We:

  • How are your investments serving your family? Community? Your business (if you own or run one)?
  • How can we improve our relationship to better meet your objectives and match your values?
  • What kind of community, or society, do you want to be a part of? How do you see your investments making this vision a reality?

World:

  • What impact would you be proud to talk about in terms of social and environmental outcomes (or harm reduction) in your portfolio?
  • How to understand and / or monitor the environmental and social impact of your investments (without overloading their and / or your teams)? How could we make this understanding and follow-up more satisfying for you?
  • How do you understand your own goal and how are your investments advancing it? Do you know the purpose of our business and the desired impact on the world?

Alignment with your employees
Just as your clients ask you for this more holistic approach to their portfolios, your employees (current and future) want to use the same approach in their careers. Companies that invest in their people in these three dimensions create a meaningful workplace and will win the war on talent.

Me:

  • Are our employees able to reach their individual full potential through their work here?
  • Do we understand what employees need to thrive physically, intellectually, mentally, spiritually and financially, and then invest to meet those needs?
  • What informal policies, procedures or behaviors could we change to make employees feel better and better supported?

We:

  • Are we building trusted, collaborative, inclusive and innovative teams that can navigate the rapid change in the investment industry for years to come?
  • Are we investing in the growth of our teams? How do we encourage skills building, including technical, transferable and cultural skills?

World:

  • What impact would you be proud to talk about in terms of social and environmental outcomes (or harm reduction) in your work?
  • How do you understand and / or monitor the environmental and social impact of your work (without overloading your team)? How could we make this understanding and follow-up more satisfying for you?
  • How do you understand your own goal and how does your work here advance it? Do you know the purpose of our business and the desired impact on the world?

5 steps to motivated change
The work of determined leadership is a continuous process in which perfection is the enemy of good. The important thing is to start somewhere. With our changing economic, demographic and political environment, you need to adapt to trends and changes to stay on top.

These five points and actions can move you and your business towards alignment, avoid complacency, and move your organization forward.

  1. Consciousness. You are now aware of the need to align investments and management with the goal. As you change your approach to investing, you will discover more than you already knew and continue to be aware of these intricacies.
  2. Belief. You, your customers and your employees must believe that it is possible and desirable to align your investments with their impact on the world. No matter how many stats or case studies I share to prove this point, you have to believe before you continue. Are you, your clients and colleagues?
  3. Clarity. Be clear about the values ​​your business shares and what interests your customers. It’s important to understand what matters, what doesn’t, and what impact you are realistically looking for in this part of your life. This clarity is what gives the confidence to take action, while also inspiring others to follow in your footsteps.
  4. To dive. Start somewhere by doing something that is what you clearly understand.
  5. Evolve and expand. Measure what you do with practical and specific quantitative and qualitative measures. Keep learning and understanding where you can improve. You can start small with achievable goals, but take risks to achieve greatness.

You risk everything if you do nothing. Because the world is changing so fast, you won’t retain your customers or your performance if you don’t step up to ensure that your investments and operations are aligned with their social and environmental impact.
No matter where you are today, I invite you to use the Me-We-World framework to examine where you could go further. By aligning your investment approach and employee experience with the legacy you, your clients and your team want to leave, you will have more impact and grow your business, while building that powerful legacy.