Cliff Feigenbaum On Socially Responsible Investing & Aligning Your Money With Your Values
Cliff Feigenbaum is the Founder of GreenMoney Journal and co-author of “Investing with Your Values: Making Money and Making a Difference” (Bloomberg Press 1999 and New Society Publishers, 2000).
In 2013 Cliff was named “One of the Top 100 Thought Leaders in Trustworthy Business” by Trust Across America. In 2015 and 2017, Mr. Feigenbaum was named one of the “Leaders in Corporate Responsibility and Sustainability” by Corporate Responsibility (CR) magazine. He has also received numerous nominations for the SRI Service Award.
GreenMoney is one of the world’s leading sustainable business and impact investing media brands with its monthly eJournal and website focused on publishing innovative solutions and responsible leadership. Every issue is filled with relevant news featuring top writers from the world of sustainable business, impact investing, renewable energy, organic agriculture, and ethically-made products. GreenMoney is currently celebrating its 25th anniversary.
Cliff discusses his top tips for socially responsible investing, using your money to change the world, shareholder activism and his journey and findings from the GreenMoney Journal.
Highlights from the interview (listen to the podcast for full details)
[Tom Allen] - Could you please share a bit about your background and what led you into the world of sustainably responsible investing and publishing?
[Cliff Feigenbaum] - Well, it all started when I was working at a hospital in the northwest, in America, and found out that my 401K, my retirement plan, had mutual funds that had tobacco stocks in them. And I thought, "Well, how inappropriate for a healthcare institution to be profiting from tobacco." And that was really how Green Money Journal started. I wanted to make basic, informed financial decisions and I was having trouble finding a resource. So I literally created a publication, with no background at all in publishing, and created a little six page newsletter which took off. From day one it had a readership and a following and has now grown to 26,000 people worldwide on our e-mail list.
Tell us about some of those milestones Cliff.
Well, one thing that was really exciting and has helped us along the way was, every so often as we're out there in the world, there is something significant that happens to keep us going. The first year we were out Paul Hawken, the international author, named us in a publication that went out across the country. And so it really boosted our belief in ourselves and a couple of years later we started greenmoneyjournal.com. A couple of years after that in 1997, Bloomberg Press called us and said, "We'd like you to write a book on SRI." And so every so often we'd get this call or something would happen. A few years ago we got Philippe Cousteau to write an article for us. Just really exciting, really significant things that showed us we were on the right track and that we're helping people. Sometimes I'm at conferences and people come up to us and say, "Cliff, I changed my career after reading GreenMoney." And I moved into being a financial professional doing only socially responsible, ethical investing. So those are exciting milestones.
The GreenMoney Journal is currently celebrating it’s 25th Anniversary and a lot of content has been covered in that time. Which 3 articles have most challenged your own beliefs and how?
I think it's important that people know, in those 25 years, about the growth of SRI that we've seen and those articles along the way that were significant to us. But we've seen the market grow now to nine trillion dollars in the US. To 23 trillion dollars globally. That has some level of involvement with socially responsible investing.
I believe one in five dollars has some level of socially responsible screening, shareholder activism, that it's involved in. So it's really, really fast growing and will only be increasing in the future.
But the three articles and topics that I think that have probably challenged us or been the most interesting to us would be one that was written by a lady named Donna Katzin who herself had worked with Nelson Mandela in South Africa. And it was such a meaningful article. So real that it was like, yes! This is why GreenMoney exists. Is to be able to share this transformational article that's just ... Walking in His Footsteps, I think it was called. Continuing to Walk in His footsteps.
The next conversation was one that is still ongoing. And that is about organic agriculture and organic products. And that is, should organics only be available in organic supermarkets that have only organic products and only sustainably grown products? Or should organics be in every supermarket? Affordable. Widespread. And even a company called Honest Tea who sold to Coca-Cola to get their organic tea distributed around the world. And the only way they could get that distribution was to join with Coca-Cola. So they made a very controversial decision at the time. But they saw the distribution, again, to move organics to a global format.
And probably the future of energy articles and green building are so significant in moving ourselves forward to the future in a renewable energy and a climate change world. I'm always, always surprised and always excited to learn about new things and that's really where GreenMoney is; on the edge of bringing new information to people in every issue. Very innovative people write for us.
If you had to reduce 25 years of content into five top tips for socially responsible investing, what would they be?
Just five? I don't get 25? Going over my 25 years and thinking about, well what have been the significant points that people have really, really found useful and I think that's invest in what you're interested in. This comes from a famous investor named Peter Lynch who used to say, "I like to walk the aisles of my stocks." Which meant he liked supermarkets. He liked department stores. He liked things that he could actually go and see how the company was operating. And I like it too. That has always stuck with me so I own a company called Whole Foods Market here in the US and so I go. I was there this morning shopping and noticing things about the store. I like that. I don't like that. And sometimes I share it with the store manager and I have a conversation with the stock person or someone that might be stocking the shelves and working there.
Be long term. Sustainability is about long term investing. It's not a short term, quick profit motive. It really is long term.
And something that I really care about is community investing. Impact investing.
I recommend that people take about 10% of their portfolio and put it into their local community if they can.
If they're right here, where I live there's actually an investment fund where I invest in low income housing and it's doing very well. It's really creating some great opportunities for people here in the area.
Another tip, I think, is to ask yourself about risk. How comfortable are you with risk?
And so, I take about 10% of my investments and put it in risk capital or innovative companies that might not have made it yet. So it might be an individual company stock. It might not be a mutual fund. It might not be a retirement fund. It might be an individual stock that I roll the dice on a little bit. That's something that I like to do.
And then, of course, really understand how to align your money with your values. And align your investing with your values. What do you care about in the world? What do you not want to profit from and what do you want to profit from?
So for me, I stay away from tobacco stocks. I stay away from weapons manufacturers. I stay away from nukes, environmental polluters, companies that might use slave labour. Those are things that I don't want to profit from. But I do like renewable energy. I do like organic agriculture. I do like innovative companies. And so sustainability is about creating a sustainable future.
In 1999 you co-authored ‘Investing with Your Values: Making Money and Making a Difference’. What were your key arguments in the book and do you think they have stood the test of time?
Well, it's been a really interesting ... well, gosh, going on 18 years now since we published that book. Which is hard to believe. But the four aspects of SRI, sustainable investing and ethical investing. In a lot of sense, those terms are all the same thing. And there are really four aspects to it. So we broke the book down into screening out companies. Divesting from companies like we just talked about. That you don't want to profit from. But the flip side is that, and a really important side, is what do you want to invest in? And what do you want to profit from? The third aspect is shareholder activism. And that's one thing I like about a lot of the SRI mutual funds that I am involved with, is that they are very active with the management of companies too. Even if they're in SRI funds and they're good companies, it doesn't mean they can't improve.
So shareholder engagement. And there's even, one of the good stories this year was that even companies like Exxon Mobile, their shareholders this year had a shareholder proposal on climate change risk. 60% of their shareholders said we want the company to report on climate change risk.
Shareholder activism is a growing aspect of SRI.
We see it influencing Wall Street all the time. More and more, sustainable investing is making an impact.
And then the fourth aspect is community investing, impact investing, that we've talked about. To put some of your money closer to home and not off in the stock market. But, how can you do things and invest a little bit closer or more regional? How do you bank?
As they say, where does your money spend the night?
So one thing that we found really interesting after the book came out was that every single section that we did, all the chapters, actually expanded so much that each one, we thought, could become its own book. It was really very heartening for us to see us touch on so many topics that expanded. And our team never did get back to writing the next book because we all just found so much success in what we were doing. But we just realised, wow, each one of these chapters can be its own full book now. There's so much going on.
What advice would you give to social entrepreneurs looking to get investment to help them scale, grow and maximise their impact?
Have a great idea. That's the first thing. How do you do that? How do find out the great idea? Actually, you have to have a great idea. And what I mean by that is, not to intimidate people, that they have to come up with the world changing idea.
But what is something that you see in the world that's not working? That you're not finding satisfaction with?
It's kind of like when I started GreenMoney. I could not find an information resource that wasn't overly intimidating, like the Wall Street Journal or something. But I couldn't find the information I needed and the resources I needed in the style that I needed so I created one. And we invite people in to a conversation about the relationship with money and creating the kind of world they want to live in, using their money.
I was in San Francisco visiting somebody years and years ago. And we hailed a taxi. We called and we said, "Can we have a taxi?" It took two phone calls and over an hour to get this car to this house. And I thought, "No wonder Uber and Lyft and other companies started ... it started out of frustration and the terrible service that taxis were doing.
I am not at all surprised that those companies are successful because they filled a gap. Something that wasn't working well in society for people. And so I'm always looking for things like that. good ideas will find good financing.
Kristin Hull recently told us that the biggest challenge is the status quo and that people are busy to change their spending and investing habits. How might we best empower communities to break habits which perpetuate unsustainable futures?
One nice thing is this past week I just talked to Kristin and she's going to be writing for our November issue on some of her insights about money. So we look forward to that. But, again, I ask people to look at what they're thinking about. Again, to ask that question, "What do I want to profit from and what don't I want to profit from?"
And when you're investing, or even when you're shopping, you are supporting, you are voting for a company and what type of business they're doing. And so, really, your money is very powerful to change the world.
And so, you know, move it towards the kind of world you want to live in. Move it towards sustainable and innovative companies that are creating, that are developing the kind of world you want to live in.
That's just the way that I use my money to make an impact and really create change in the world.
To finish off, could you please recommend 3 great books that you think would inspire our listeners?
[Cliff discusses in detail the books listed below.]
The New Grand Strategy by Joel Makower, Mark Mykleby and Patrick Doherty
Integrated Investing: Impact Investing with Head, Heart, Body, and Soul by Bonnie Foley-Wong