The Annual Wealth Management Conference took place at DePaul University on Building Sustainable Value for Impact, focusing on how wealth managers can invest advantageously in solutions to climate change and its effects.
Dr. Jonathan Foley of Project Drawdown gave the keynote address, opening with a revelation that the past two generations have used more of earth’s resources than in previous human history over 6 million years, or 300,000 generations. We are at an inflection point with the size of Earth’s population (the population more than doubled in the past 50 years), growth of the global economy, global conversion of land to agriculture, and release of greenhouse gasses into the atmosphere that is pushing the planet to its limits. How civilization produces food and energy and uses water are some of society's greatest challenges but will provide business opportunities, with potential to produce a more literate, urban, mobile, and connected populace with less welfare and less violence.
While he provided stark images of the threats, including poor water use that can deplete whole great lake systems such as took place in Eurasia’s Aral Sea, he also provided key elements of hope, citing improvements in lifespan, family size, and increased literacy. We need to look beyond only CO2, otherwise we are missing part of the equation such as emissions from food, land use, industry, and other uses.
After laying out the challenges and stresses we are facing in regards to climate change, Dr. Foley reassured the audience that “We can build the future we want.” He then explained how Project Drawdown’s analysis and recommendations can guide us toward a more sustainable future. He explained that we can get to the goals of Project Drawdown (the point when GHG levels stop increasing and start to decline) with today’s technology although it will be difficult. The areas of focus are to 1) stop and reduce emissions, 2) protect, enhance, and augment nature’s sinks (the oceans and forests), 3) Improve agricultural practices and reduce food waste, 4) Create carbon friendly steel and concrete and manage refrigeration and hydrofluorocarbons, 5) advance equality, health, and education. Many of the solutions to climate change and social justice offer co-benefits.
Following Dr. Foley, Bruce Alexander presented on Exelon’s commitment to reduce its climate footprint. Exelon is the second largest energy generator in the country and scores among the highest in CDP Climate and Water surveys due to a commitment to nuclear energy and renewables.
The Investment Leadership Panels communicated that they achieve equivalent returns when investing with an ESG lens. Research shows that during downcycles, ESG investors outperform others. John Oxtoby expressed how Ariel Investments integrates ESG into investment decisions and helps companies add diverse directors to their boards; they also run the Ariel Community Academy, a Chicago public school with a financial literacy program. Kristina Van Liew of Graystone Consulting explained that businesses run with better practices (ESG principles), usually provide better returns. Liz Michaels of Aperio Group moderated Kristina and John’s insightful discussion and also provided relevant information from her work as Director of ESG/SRI. Roger Liew described how Impact Engine invests directly in companies that produce and sell products that reduce carbon. Cristina Rohr of S2G Ventures invests in food sector companies from “soil to shelf” in a collaborative approach. They all addressed how the Chicago ecosystem benefits their work. S2G finds advantages being in the Midwest from relationships with universities and agricultural/food organizations. Ian Adams of Clean Energy Trust finds that Chicago provides a size that allows them to network well. Impact Engine finds organizations are drawn to their ability to bring them to the Chicago marketplace. Moving forward Cristina finds regenerative agriculture solutions interesting, Roger is excited about the capability of sensor technology and IoT and 5G, and Ian will be looking at how changing regulatory policies will affect available technologies.
We thank the speakers and panelists for sharing their knowledge in a very stimulating afternoon session. Thank you to DePaul University for co-organizing the event and to the audience for their engagement.