One Key To Impact Investing: Start Big
This post was originally produced for Forbes.
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Robert Rubinstein, 66, founder and chairman of the TBLI Group, has been advocating for sustainable, responsible or impact investing since the mid-1990s. One of the key lessons he’s learned: start big.
“I always focus on irresponsible investors and criminals. And I always communicated in their tribal language, so I only showed them self-interest, opportunity and money flows,” Rubinstein jokes enthusiastically, referring to the investors who didn’t already employ some form of responsible investing.
Those money flows were key. He says others in the space have made the mistake of focusing on the “moral imperative.” Money managers face targets, he notes. If they don’t meet their benchmarks they get fired. The only way to get through to them is to speak their language and to focus on financial returns.
Robert Rubinstein, TBLI
You have to package it in a way that they can move zeros,” he says, noting that money managers have to put lots of money to work and can’t be bothered with investments that are too small.
“Too much of the impact space is only about smiling children drinking milk in Tanzania as the only form of impact. That’s a form; it’s not the only form. So, our definition is broader because we want to get switched to a values-based economy, an economy based on well-being and a low to zero carbon economy. You can’t do that on small scale. You’ve got to do big time.”
He says that “most” companies already have an internal price on carbon built into their financial models. That some people in Washington decry climate change as fake doesn’t matter. “It has nearly no influence whatsoever on institutional investors.” They are looking to “decarbonize portfolios at scale.”
Some of the sectors that excite him for making impact investments at scale include public transportation infrastructure, community banks and what he likes to call “fuel-free energy” like wind and solar. These are all areas where investments can be made at scale.
Ibrahim AlHusseini, founder of The Husseini Group, who has attended TBLI events, says, “In the past, the prevailing narrative was that money must be left to grow unencumbered by the wealth holder’s values. Now we have the choice to make equal or larger returns while we solve real social or environmental problems at the same time.”
Getting to this point, however, has been a long road. Rubinstein says he feels like a “25-year overnight success.” When he started publishing his sustainability magazine in 1995 he would sometimes be invited to speak at conferences. He would leave copies of the magazine around for the asset owners and managers. “They were afraid to touch it. They thought they might get some illness or disease.”
He put the magazine aside in 1998 to launch TBLI Group, which stands for Triple Bottom Line Investing—profit, people and planet, though “not necessarily in that order,” he quips. The firm has three business lines: ecotourism, conferences and consulting. Most people get to know the firm, which he says is profitable, through its conferences, usually held twice each year in different places on the globe.
Toni E. Symonds, senior policy advisor to the California State Legislature has attended the conferences many times—typically at her own expenses, she was careful to note—says, “TBLI events are gathering places for people who want to use their time and talent to support upward mobility and create inclusive economies.”
“In the 15 years since I attended my first conference, TBLI has served to influence and inspire many aspects of my public policy work.” She boasts of drafting a bill in 2005 that would have set California’s first greenhouse gas emissions reduction targets and another in 2008 that would have the state create an investor-based climate change disclosure standard for public companies doing business in California.
As you can see, Rubinstein has influenced a shift in the financial markets over the past 20 years, but his work is not done.
“The problem is that global financial systems [have an] I win-you lose mentality. TBLI would like to change investment perspectives to a values-based system whereby everyone has the opportunity to be a winner. That’s a good problem to solve. And we are here to take on this challenge,” he says.
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