Money Can’t Buy Due Diligence
August 05, 2019
By Heidi Huiskamp, Founder and CEO of Huiskamp Collins Investments, LLC
It’s the “new thing” and there are a dozen names for it: Sustainable Investing; Impact Investing; “Green” Investing; E.S.G. (Environmental, Social, and Governance) Investing; Ethical Investing…and the list goes on. They all boil down to seeking financial return while investing in companies that are attempting to do social and/or environmental good. According to the US/SIF Foundation Report on U.S. Sustainable, Responsible, and Impact Investing Trends 2018, a full 26 percent or one out of every four investment dollars at year-end 2017 was being funneled to “sustainable” investment securities. That represents a 38 percent increase from year-end 2016 numbers! And you can bet the trend is here to stay. In a CNBC article on May 13, 2019, the majority of retirement plan participants want a sustainable investment mutual fund option in their company plans. In the same article, a poll of millennials found that the majority of that age demographic would actually take a pay cut in order to work for a company which adheres to sustainable values. The idea has even taken hold in all the biggest board rooms around the country: in 2018, all Fortune 500 firms issued a “Sustainability Report” documenting their efforts to make positive environmental, social, and governance contributions.
It’s a toss-up; I don’t know which I love more: connecting and “loving on” my clients or really digging in and doing the research and analysis to find the very best new investment ideas for those same customers. What’s really great is when I can do both! I have a terrific new client. She is a smart, savvy, successful entrepreneur who has almost 20 years experience running her own business. She wants her investment dollars to both work for her and do good for the world at large. She is passionate about recycling (the backs of all papers in her office become “scratch paper” for her employees) and promoting diversity and inclusion in the workplace. She wants her investment choices to reflect those values. Her husband was of the opinion that good returns and ethical investing are mutually exclusive; that such investments couldn’t possibly yield lucrative results. I disagree. Investment companies do, too. At year-end 2018, there were 351 “sustainable” mutual funds and exchange-traded funds (ETFs). These investment products are more expensive than your average mutual fund or ETF because analysts have to put extra time and effort into additional research around sustainability issues. This didn’t affect my client and I as we had decided to invest in individual companies that are truly making a positive impact on our world.
Last Saturday night, I was in my “happy place.” My husband was at a ballgame and I was on our screened-in porch, my favorite candle and a hot cup of cherry herbal tea at my side, with our dog, Lucy, at my feet, curled up with the latest copy of Forbes magazine. I read a fascinating article about a young black woman, who at 15 years of age, was a self-taught web developer. She earned a bachelor’s degree in Computer Science from Stanford and a master’s degree in the same discipline from M.I.T. After she completed her studies, she applied for a tech job at Google and was rejected. REALLY? Instead of giving up, she decided to launch her own company and start doing consulting work to help Fortune 500 companies navigate the hiring and onboarding tasks for employees without bias. How cool is that! Additionally, since she founded her company, she has published an annual list which rates companies on a scale of 1–100 on diversity, inclusion, social goals, and corporate governance. I had to find the 2018 list! Dig, dig, dig…I was on a mission! After several dead-ends, I finally found it, and, lo and behold, one of my very favorite stocks had the top ranking on that list for 2018. That had to be one of our stocks!
It was 9pm on a Saturday evening, but I was so excited that I had to immediately reach out to my client and tell her about the amazing female entrepreneur, her company and “the list,” and my stock pick for her. Has your financial planner ever sent you great news on a Saturday night at 9pm? Because who you do business with really does matter!
I would love to partner with you on investing or financial planning! Please call me at 563-949-4705 or reach out to me at firstname.lastname@example.org. To learn more about me or read my blog, please visit my website at www.hhcinvestments.net.
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