Investing Responsibly and the Power of Sustainable Strategy with Bruce Herbert

In this episode, Steve talks with Bruce Herbert, Founder and CEO of Newground Social Investment in Seattle, Washington. Newground focuses on helping clients make a socially responsible impact with money. Whenever money moves, it has an impact. Investing responsibly and thinking long-term has changed company policy for the better and outperformed financially for investors.  Early in his career at Merrill Lynch, Bruce felt the commission-based system inherently created a conflict of interest with clients. That uncomfortable feeling prompted his desire to rework the financial model and focus on impact first.  Now an industry leader in responsible investing, Bruce uses shareholder voices to change company policy rather than simply selling shares and walking away from the morally questionable. Bruce and Steve discuss the pillars of responsible investing, what every client looks for, the importance of leaning on experts, and why the most sustainable approach is often the most profitable. “One of the things that I recognized was an almost complete convergence between what’s most profitable and also the most sustainable. If you have a longer-term time horizon – and I don’t mean a century, I mean even just three, five, or 10 years – then what’s the most profitable thing is also the most sustainable, the most equitable thing, the most just and fair thing to be doing. ” ~ Bruce Herbert Main Takeaways  Exclusionary screenings are just as important as inclusionary screenings. Don’t just exclude tobacco companies from your portfolio if you’re a healthcare professional, actively seek out companies that are making an impact. Use your rights as a shareholder to actively engage with company management about addressing issues and improving policy and practice.  Those who are more thoughtful and conservative with their portfolios outperform those swinging for the fences at every turn. For better results, focus less on immediate performance and more on planning and portfolio management.  Clients are looking for authenticity and conviction. If you’re interested in responsible investing, you have to go all-in. Switching out of the commission-based model gives you the time and the freedom to invest responsibly and ultimately build long-term client loyalty.  Experts are essential. It’s impossible to know everything, so surround yourself with people who know (nearly) everything about one specialty. Links and Important Mentions Newground Bruce Herbert on LinkedIn Parametric Calvert Merrill Lynch Parnassus Investments The Forum for Sustainable and Responsible Investment US SIF Trends Report 2020 Impax Asset Management Getting McDonald’s to the Table - NPR-KUOW Feature on Newground World Wildlife Fund MSCI ESG Leaders Index Subscribe and Stay in Touch Apple Podcasts Spotify Steve on LinkedIn Follow Buckingham Strategic Partners  on Twitter