A few weeks ago I had the pleasure of attending and speaking at the Confluence Philanthropy gathering in Boston. The conference was populated by well-meaning, sincere and committed people who believe they share a common purpose: promoting environmental sustainability and social justice by helping to move philanthropy in the direction of mission-aligned investing. What I am not so sure about is whether they share enough of the same values, beliefs and assumptions to actually agree on what makes something mission-aligned.
To illustrate my point, we can look at the gulf between two of the conference sessions and one stark Q&A exchange around the issue of justice. The first session I’ll highlight was a breakout panel session titled “REGENERATIVE FINANCE: RADICAL INVESTING ON THE FRONTLINES OF CLIMATE AND ECONOMIC CRISES”. The panel description included a statement that Regenerative Finance considers investments as reparations and that we need to move beyond socially responsible investment toward divestment from the oppressive structures of traditional finance as a whole. One of the panel members, Ed Whitfield of the Fund for Democratic Communities, spoke eloquently of the origins and meaning of wealth. He spoke of wealth as big piles of money that are the appropriated products of nature and human labor. And, because this wealth has been appropriated, it must be moved back into the public sphere where it can produce community benefit. He stressed that we need to replace our speculative economy that is hell-bent on growing profit for the few with a democratic financial system whose purpose is the creation of beneficial value. Each of the panelists stressed that we need to see the financial system as part of a greater whole and that it is limiting and unfair to extract financial return from communities and nature.
The second session was a plenary panel discussion titled “INVESTORS REFLECTIONS WITH THE ROCKEFELLER BROTHERS FUND”. The program description referenced the fund’s watershed announcement to divest from fossil fuels and described them as true visionaries in the field of impact investing. The panelists—all connected with the fund as board members, staff, or advisors—emphasized the fund’s unwavering insistence on receiving market-rate returns in service of its commitment to carry the family’s legacy forward in the form of an endowment and charity. The fund has hired a Wall Street advisor, Perella Weinberg Partners, to guide it on its path of impact investing, despite the advisor having no previous experience in the area of socially responsible investing or ESG evaluation. But fear not! The CEO of the fund stressed that they are “good investors”, the clear inference being that mission and values are to be in service (and subordinate to) the highest purpose—maximizing “risk-adjusted” returns.
It would be wonderful to say that having these substantially different perspectives at the same conference led to a rich dialog about what fair returns are or why the market should dictate all our financial decisions. Sadly, attempts at starting that conversation seemed to be met with deaf ears. During the Q&A period after the plenary panel discussion, Kate Poole, a leader of Regenerative Finance and moderator of the first session (above), asked the following question: "I don't understand your commitment to market rate returns. For me, climate justice is linked to racial justice and economic justice. Where do you think your market rate return is coming from? Isn't it coming from the continued extraction of wealth from poor communities, communities of color, and violent extraction of resources from our planet?" Adam Wolfensohn, member of the Board of the Rockefeller Family Fund, responded, “I don’t believe that market-rate returns are extractive.”
Period. End of story. No discussion. See Kate’s “comic” depiction of the moment here.
And yet, for those of us who purport to prioritize environmental sustainability and social justice, that is the conversation we need to have. I have been struck lately by how often I hear my colleagues and associates saying things like: “we’re all trying to accomplish the same thing”, or “we have to start somewhere”, or “good for them for taking the first step”. I have begun to view this “we’re all winners” mentality as an indicator of our reluctance to face up to the glaring, burning issues of our day—ecological limits and our extractive economy, wealth and income inequality and how we contribute to it, exploitation of the poor and marginalized in the name of economic growth, and the realities of deep social and political divides arising from disillusionment, anger and fear.
I admire Kate Poole for standing up to the establishment, albeit a part of the establishment that has been lauded and praised for its vision. I do not think that Regenerative Finance and the Rockefeller Brothers Fund would agree that we are all trying get to the same place. One wants to deconstruct and redistribute its big pile of money that’s come from extraction and exploitation, while the other wants to keep riding atop it.
These clashes are not new. In fact, they are the stuff of politics, power, and revolution. What’s different is that the rarefied world of Wall Street investing and its “good investors” is now being infiltrated and questioned by a small, vocal, and growing number of people with wealth who are eager to question and redefine investing. They are in for a rocky ride, filled with contradictions, questions, misgivings, doubts, and great accomplishments. I hope that groups like Confluence Philanthropy will rise to this challenge: What does it really mean to commit, financially and economically, to environmental sustainability and social justice? I am convinced that this is the question that needs illumination, reflection, discussion, debate, and all the rest of the messy aspects involved in questioning the conventional and entrenched assumptions about investing.