Graham Sinclair is Principal at SinCo and we are excited to have him as the moderator for our 11/9 event, “Getting Real About Impact Investing: Stories from the Field.” We had a chance to catch up with him beforehand to get a sneak preview of some of the things he may touch on while moderating the session.
The 11/9 event will feature TED-style talks on impact investing! Boston-area experts, including Nancy, will be sharing compelling stories about failures as well as successes in the space, speaking frankly about the challenges as well as the rewards.
What inspired you to pursue a career with positive social or environmental impact, and how did you get to your current position?
Long term investment is my chosen field. Every investment decision has an environmental and social impact – positive or negative. The investment industry is a great business to work in. If done right, it’s rewarding. One day investment may be seen as a (noble) profession. The institutional investment value chain has an important role to play in helping people save for retirement, for major life events, for that rainy day. It’s a good thing. What does it matter to work as an investment professional in the wealth management business if it eats the planet and hollows our society? In my TEDx “Investing As If The Future Matters” I tried to share the big idea: all careers have impacts including environmental and social impacts. In 2014, the global value of professionally managed assets grew to US$74 trillion. In financial services as we allocate capital, so we indirectly and directly have real impacts.
This decade, I have an even stronger imperative: it’s in the blue eyes and the blunt questions of my pre-schooler. Like any kid he’s figuring out the world. When he’s twenty-something he may ask: what did you know, when did you know it, and what did you do with that information? I’ll have authentic answers about how I played the game, and tried to improve the game. On this day in 1918, British war poet Wilfred Owen was killed in World War I, at the age of 25. His stark poetry helped reframe the false notions of war, in a way that Restrepo has in this generation. I am reminded of how purposeful we must be about what we give our lives for. That we need to fight, as many have fought before us. For fair wages. For safe work. For a healthy environment. For next-gen investment.
My professional experience and education has covered two decades in the global institutional investment field (since 2004 focused on sustainability) with degrees in business and law, complemented with professional studies in investment and sustainability. My first decade I was running pension funds in Southern Africa and representing global asset managers like SEI Investments. My second decade has been focused on sustainable investment, firstly managing research products at KLD (now MSCI ESG) and lately running my sustainable investment advisory boutique Sustainable Investment Consulting LLC (sincosinco.com, @SinCoESG) on client engagements ranging from Wall St, to the UN Environment Programme in Geneva, to private equity in Africa. In my third decade. I started the practice when I identified an unmet need with an addressable market that my unique blend of global investment management and ESG research skills could meet. Investors need an architect to map the systems for their clients, and for the investor. From our first client (AIG Global Investment Group with $1 trillion in assets under management in 2007), SinCo has delivered specialist advice to portfolio managers, policy makers, international organizations, C-suite and investment committees.
Along the way I have sought opportunities outside the commercial realm for making an ecosystem impact, like co-founding Net Impact Boston in 2005 to promote Net Impact’s mission in the Hub or AfricaSIF.org in 2010 to expand sustainable investment practice in Africa.
What is a trend in impact investing that you think will impact your career in the years to come?
I make the case for long term sustainable investment to institutional investment organizations and their stakeholders. My investment industry is shifting the means of asset allocation, investment analysis and the narrative around the services offered: crowdfunding, impact investing, blockchain and resilience have new currency within the ESG (environmental, social and corporate governance) theme. Placing the impact investing niche within the fluid and ever-changing world of global investment practice will be a challenge for years. The trend to normalize and absorb all of what impact investing can mean is a generational shift. It’s about intention, design, beliefs, practices, metrics, technologies and investment ecosystems. Adding diversity, diversity not just of “type” but of origin, experience and worldview, is a significant trend that impact investing can continue to grow through and may have decades-long impact. A lot of investment is about the plumbing, about moving a dollar from one place to another at a point in time. Much of the impact investing ecosystem is still being mapped out and people are stepping into the opportunity. The wisdom to parse the hope from the reality will remain a valuable skill in the years to come. Investment strategies and execution of investment management mandates are shifting at different paces around the world, and adapting to different local sustainability issues within the sustainability meta-theme. For example, family offices and investment firms are seeking my counsel on the practice of impact investing, parsing the hype from the reality. The talking heads are leading the dollars invested; there’s nowhere near the $1 trillion J.P.Morgan forecast in 2010, nor will there be. That’s partly where the idea for the NetImpactBoston.org “Getting Real About Impact Investing” came from.
What’s the most interesting/ most fun/ most challenging aspect of your job?
My role is a blend of strategic management consulting for institutional investment firms, and as a subject matter expert on emerging themes in sustainable investment like impact investing or green bonds. Investing in future technologies, systems and entrepreneurs is risky but potentially fulfilling, never dull. I have a well-developed BS filter, so that’s always being triggered. And BS bingo is a fun way to spend the telcon when talking heads bang on about their “runways”.
What’s challenging is making hard things simple, and saying no to opportunities. Sustainable investment is an intellectually challenging and operationally complex investment technology. My challenge lies in balancing the design, research and production of projects. My work includes designing and implementing large-scale, multi-stakeholder, multi-country strategic projects. Diversity adds value but in the execution may be tough, as my work for the Istanbul Stock Exchange or WWF may attest. On a good day, my work is a small piece of making new history in the investment management industry. My diplomatic exposure at the UN Environment Programme Finance Initiative in Geneva heightened my sensitivity to the right tone and delivery for multi-stakeholder audiences.
I believe the investment case for sustainability can be made, and must be made urgently. While there are some innovators – my work tracks trillions of dollars today investing in sustainability – the strategies, technologies, and metrics differ. The low-carbon economy is irreversible and inevitable but getting there will be challenging. My independence allows me to speak truth to power, or at least, to inertia. I can translate the dialogue between academics and practitioners because I work at the intersection of practice and academia, for example my work with the State Street Center for Applied Research. As long as I enjoy it, I will continue to speak and teach, as I did at Duke Fuqua B-school in the Fall. Apart from the intellectual challenges of sustainable investment, being an independent management consultant is challenging. As management guru and friend Charles Handy predicted in “The Elephant and The Flea” for knowledge workers, mine is the portfolio career. The most fun is being able to express myself in the work every day. I work globally and the experience is invigorating. On a good day I may even tackle some giants. In all of this, Net Impact matters.
Can you give us a sneak peek of a challenge or failure you’ve experienced in the impact investing space that you may speak about on November 9th?
My pivot to longer term asset classes continues. The opportunity for ESG management systems in private equity and infrastructure fund is still growing. In the US or in Africa, everywhere in the world, cities and states need to be (re)laying water and sewage pipes, (re)building bridges and railroads. Investors have a powerful, positive role to play investing toward a more resilient infrastructure for a changing world. These are trillion dollar bets made once-in-a-generation, which is why the KeystoneXL pipeline or Arctic drilling is so divisive. Some of the investment bets need to be bold, as my countryman Elon Musk has demonstrated. Some may be simple, the way a new city bike share program changes the way citizens commute. The sustainability challenge is urgent, as every passing day improved data demonstrates the work our generation must get done. Or start to get done.
The biggest barrier I face is cultural, within an institution. In management consulting the old saw is “culture eats strategy for breakfast”. Until a heap of bots make up an Internet of Things that organize for the investment process, it always relies on humans. So impact investing starts at the fundamental level of beliefs and philosophies, as expressed, experienced and executed by investment practitioners for their clients. It is why the mega-pension fund CalPERS with US$297 began their march to sustainable investment relevance with investment beliefs. The culture has many ways of manifesting. The shape-shifting scope. The passive aggressive company wo/man. The many ways reality is warped by clients (as hilariously depicted in The Expert!). My challenge working for a client, faced with internal political dynamics and after tripping over gaps in investment systems and reporting, was in being undermined by the organization’s functional unit with the most to lose from a revised strategy that tracked investment outcomes against intentions. In debriefing from the part-failure of the engagement, I unpacked many lessons about how to play the people before, during and after the project on future assignments. The culture last much longer than new investment techniques, widgets or strategies. Especially with something as nuanced, and blended quantitative and qualitatively, as impact investing.
If you hadn’t ended up working in the impact investing field, where do you think you would have ended up instead?
Recently, I have enjoyed joining the conversations at Boston College Center for Corporate Citizenship and TriplePundit. I can navigate the barriers to making the business case for sustainability to audiences on multiple platforms: @esgarchitect has 2,831 followers while my TEDx “Investing As If The Future Matters” was ranked by the CFA Institute as “Sustainable Investing – Five Videos To Watch” in September 2014. To stay mentally sharp I’ll keep learning from history of innovation and the history of business, like how the longitude prize continues to incentivize discovery or the founder of venture capital Georges Doriot. Today, I posted on underwater photographer David Doubilet’s NatGeo “Cool It” NatGeo cover post about the dream of being a National Geographic photo-journalist. So I’d say a Bloomberg TV interview show anchor (younger Charlie Rose?!) who does investment + business + environment photo-journalism assignments, then presents them with a fraction of the wit of John Oliver’s brilliant investigative journalism on Last Week Tonight!