What Is Powering the ESG Investing Surge?

Environmental, social and governance (ESG) investing, once a sideline practice, has gone decisively mainstream, and this is creating real opportunities for investors. These opportunities meet the interests of a wide spectrum of clients, from fiduciaries aligning their portfolios with the realities of a rapidly changing world to clients who are increasingly looking to have their investments express their values.
Better data, refined tools and improved methods have expanded the possibilities across all of those interests. As a result, ESG investing is no longer a carve-out within a portfolio — it is the portfolio for some investors. What was once the province of a small number of family offices and foundations has drawn sharply increased participation among pension funds, insurance companies, nonprofits and faith-based investors.
At Goldman Sachs, the growth of ESG investing has been significant in recent years. We have seen a virtuous cycle in which demand has driven product and service innovation, creating new models for success and driving further demand. As a result, our assets under supervision in dedicated ESG strategies have grown significantly, to $6.5 billion by the end of 2016.
Fundamental to this growth is an increased understanding that a disciplined approach to ESG investing can drive competitive risk-adjusted returns — just as with any other investment. Risk/return profiles of ESG portfolios now mirror the markets and span asset classes, fueling the evolution of impact investment strategies that meet conventional risk/return hurdles, but also include social and environmental impacts that are both intentional and measurable.

World Resources Institute

How does a research-driven, global institute focused on sustainability manage its portfolio for the long term? One way is by leveraging its own research on trends to more effectively steward their endowment while also using this work to create a model for other institutional investors. Here, the World Resources Institute’s President and CEO Andrew Steer and Head of Sustainable Investing Elizabeth Lewis discuss WRI’s objectives and investing approach with Goldman Sachs’ John Goldstein.
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Municipal Bonds: An Overlooked Impact Investment?

As interest grows in achieving positive impacts while generating market-rate returns, investors may forget about the opportunity in their own backyards: municipal bonds. Often focused on financing redevelopment, infrastructure and key community needs for education, health, housing and sustainability, municipal bonds can drive ESG impact in addition to providing clear tax advantages. Senior portfolio manager Ben Barber and research analyst Michael Kashani of Goldman Sachs Asset Management explain. Read the discussion.
This article is paid for by Goldman Sachs.
Social thumbnail by Tzido Sun/Shutterstock.

Republicans and Democrats Love This Anti-Poverty Policy

Historically, Democrats and Republicans have seldom seen eye-to-eye on any tax issue — except the Earned Income Tax Credit (EITC), a refundable tax credit at both the state and federal levels given to the working poor. Conservatives support it because it’s connected to earned income; liberals believe the government should provide financial support to needy families.
Today, an estimated 28 million low and moderate-income families could benefit from the EITC (eligibility is determined by annual household income, the number of hours worked and number of children), which is now widely regarded as the most successful way to get families above the poverty line, according to policy analysts.
As bickering across the aisle creates an impasse in our nation’s capital, lawmakers in California recently approved a bipartisan solution (introduced by a Republican, passed by a Democratic dominated legislature) that could provide a model for federal lawmakers debating tax reform and how best to help struggling Americans.

THE RIGHT BACKS AWAY

Introduced in 1975, Congress passed the federal EITC at a time many other welfare programs were being criticized for their wild inefficiencies (most were eventually scrapped). Its aim: To get people back to work and off of public assistance by returning a portion of their income tax payment.
Throughout its existence, the credit has been expanded by every president, with Ronald Reagan (who called it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress”) backing one of the biggest increases.
In 2016, The American Action Forum, a conservative-leaning economic policy group, recognized the benefit of expanding the credit. And a 2014 House Budget Committee Report, headed by Republicans, said the credit was “an effective tool for encouraging and rewarding work among lower-income individuals, particularly single mothers.”
Despite this, Republican support has dwindled in recent years as far right members of the GOP advocate for significant cuts to government spending.
In 2014, Sen. Marco Rubio of Florida said he would agree to an expansion of the EITC, but only if it wouldn’t result in increased spending. (Experts said that growth of the program would inevitably mean more money would be returned to workers, costing the federal government an estimated $91 billion, based upon 2015 tax code.)
Conservatives have also argued that there’s no need to expand the EITC since an increase in the minimum wage would provide the same monetary benefits to workers.
And there is concern about fraud. The Internal Revenue Service estimates close to $13 billion in credits, or 21 to 26 percent of filings, were given out that likely shouldn’t have been.

PLAYING CATCH UP

California has been a progressive leader in sustainability practices and social programs, but until recently, its EITC efforts lagged behind states like Maryland, Minnesota and Rhode Island, all which expanded their credit programs in 2014. (Rhode Island legislators backed further expansion last year.)
“California has the nation’s highest poverty rate, counting the cost of living, and families still need to make several times the federal poverty level income to afford basic necessities,” states an opinion piece in the Orange County Register, adding that families would need a minimum wage of $31 per hour to survive in the state.
By these standards, an expansion was necessary.
In June, the state expanded its EITC to meet the minimums needed for a family to get by in one of the nation’s most expensive states, where the average rent is 50 percent higher than the rest of the country.
The expansion enables independent contractors and freelancers working in California’s gig economy to qualify for the credit, now mirroring federal and other states’ rules. It also increased the minimum income requirements from $13,870 to $22,300 so that families earning the state’s new minimum wage could qualify.

MORE HELPFUL READING ABOUT THE EARNED INCOME TAX CREDIT

The Anti-Poverty Program That Transcends Divides, CityLab

Want to Run for Local Office? 6 Things to Know

Whether inspired or angered by the recent presidential election, people who never before considered running for mayor, their town’s council or the local school board are putting their names on the ballot for the first time.
Thinking about running yourself? NationSwell recently spoke with several candidates to learn more about the process.

1. Mentors are really, really important.

Running for office is particularly daunting for first-time candidates. One mistake can sink your candidacy before you ever get your name on the ballot. “There are forms you have to fill out by particular dates. There are signatures that have to be collected and mailed in and postmarked by a certain date,” says Emily Peterson, a candidate for town council in Parsippany, N.J.
Lean on others who know what they’re doing — former candidates, your local political party, campaign managers or others familiar with the process. “People jump in and work as hard as you [do] to get you elected, even if they just met you a week earlier,” says Chance Mullen, a candidate for the village board of trustees in Pelham, N.Y.

2. Money makes the political world go ’round.

A record breaking $7 billion was spent on the 2016 presidential and congressional elections. While you need significantly less to run for local office, raising money is essential. New Politics founder Emily Cherniack says that candidates vying for a position on town council or school board will need anywhere from $5,000 to $100,000, excluding races in California and Texas. In those states, local politics is big business, and candidates might need considerably more (think: $1 million or even more).
“Your ability to fundraise is a catalyst for many organizations supporting you and endorsing you,” says Pierre Gooding, a democrat running for city council in Harlem, N.Y. “How much money you have in your coffers drives how much money you can get from organizations moving forward — it’s very important to show financial viability.”
You’ll also want to hire a treasurer to manage your campaign’s finances and determine budgets. Doing so could cost you a couple hundred dollars a month, but it will free up valuable time and keep you from blowing your entire budget on campaign buttons and yard signs. A candidate should exert her energy talking to constituents at meet-and-greets, not on opening a bank account, obtaining an EIN number or navigating state campaign-finance laws.

3. Reach out and text someone.

Facebook, Twitter, Instagram and Snapchat are all low-cost platforms you can use to engage and educate your constituency. Use your personal accounts as a springboard to launch your campaign page.
Go beyond traditional posting, though, and think about how you can leverage technology to boost your campaign. Los Angeles school board candidate Nick Melvoin is using Venmo to collect small dollar contributions from like-minded millennials; in New Jersey, Peterson is doing the same via GoFundMe and is drawing donations from people who live outside her town.
Digital startups such as Hustle, Crowdpac, NationBuilder and RunforSomething can also help fuel and educate your political campaign.

4. Walk the walk. And talk the talk.

We may live in a tech-driven world, but all the candidates NationSwell interviewed say that old-school campaigning methods are still effective: hold meetings, engage in conversations with community members, go door-to-door, have meetups at local cafes.
When out on the trail, don’t let complaints, chitchat or stories “about the way things used to be” dominate the conversation. “Listen to their concerns, but be able to talk to them so they can get a better feel of where you’re going with your position and what you want to see accomplished,” says Forty Fort, Penn., borough council candidate Amy Craig, a republican.  

5. Rehearse, but be prepared to go off script.

Practice what you want to say. Make sure your ideas translate clearly into goals. “Constituents are looking for a leader and looking for a voice, so be that voice,” says Gooding.
At the same time, however, be flexible and able to articulate why you’re taking a given position. “Your own thinking is most likely going to be the most persuasive,” explains Mullen.

6. Rise above.

In local elections, it’s particularly important to maintain a sense of respect at all times. (After all, your next-door neighbor might be your opponent.) “We’re all benefiting from the same community services,” says Peterson. “Trash collection, policing and the crosswalk being painted…that is the stuff that shouldn’t be partisan.”
The best way to remain above the fray? Keep your rhetoric community-centric and have town pride in mind at all times.

What Wives of Veterans Can Learn from Female Soldiers, How Doctors Are Saving the Lives of Gunshot Victims Before the Trigger Is Ever Pulled and More

 
What Army Wives Need to Understand About Female Soldiers, The Washington Post
Much is said about bridging the military-civilian divide, but as writer (and wife of a veteran) Lily Burana realizes, there’s also a distance between the women who proudly sport the uniform and those who are married to someone wearing it. Knowing that the military is full of inspirational females — including those now serving in the Ranger division — Burana set out to build a bridge the only way she knew how: by sitting down to lunch and having a chat.
Are Doctors the Key to Ending Philly Gun Violence? Philadelphia Magazine
Renowned for providing lifesaving medical treatment to kids, doctors from the Children’s Hospital of Philadelphia are focusing their efforts on reducing the cycle of youth violence that plagues the City of Brotherly Love. The hospital’s Violence Intervention Program (VIP) grew out of internal discussions about the Sandy Hill Elementary School shooting in Newtown, Conn., and a shocking report from the city government, which found that 5,051 Philadelphia youth were shot or murdered between 2006 and 2012. It’s difficult to know for sure if the screenings, bully prevention lessons and intensive counseling sessions, which make up VIP, is reducing the number of gunshot victims, but the outlook is hopeful, considering most participants say they desire to be a normal teenager, not one packing heat.
The Power of Vision in Urban Governance, Governing
Every politician may have the goal of being dubbed a “visionary leader,” but Indianapolis’s former four-term mayor, Bill Hudnut, actually was. In order to bring forth the Midwestern city’s potential, Hudnut enlisted help from Indianapolis business and philanthrophic leaders and economic development experts at the Massachusetts Institute of Technology. Together, these heavy-hitters combined their strengths, collaborating on a plan that eventually brought $1 billion to the local economy — proving that collective vision and use of community assets is key to long-term impact.

Why Youthful Indiscretions Shouldn’t Result in Jail Sentences, How to Save Babies Born with Opioid Addictions and More

 
A Prosecutor’s Vision For A Better Justice System, TED
Adam Foss, a prosecutor with the Suffolk County District Attorney’s Office in Boston, recently asked a group of TED participants how many had ever drank underage, tried an illegal drug, shoplifted or gotten into a physical fight. While viewed by most as youthful indiscretions, these same offenses often land black and brown youth in criminal court, viewed as being dangerous to society. Which is why Foss is using prosecutorial discretion to dismiss minor cases that aren’t worthy of a criminal record.
Tiny Opioid Patients Need Help Easing Into Life, Kaiser Health News and NPR
In this country, addiction to heroin and prescription painkillers like hydrocodone, oxycodone or morphine continues to rise, even afflicting new moms. During pregnancy, these mothers must decide between getting clean and risking a miscarriage or delivering a baby that’s likely to experience drug withdrawal. With about 21,000 infants suffering from withdrawal each year, doctors in Rhode Island, nurses in Connecticut, researchers in Pennsylvania and public health officials in Ohio are all working on solutions to help these new families.

Website Seeks to Make Government Data Easier to Sift Through, New York Times
Just because the government releases endless pages of data to the public doesn’t mean it’s easy to turn those statistics into something that you can actually comprehend and use. DataUSA, an open source brainchild coming from the M.I.T. Media Lab, organizes and visualizes the information, presenting it in charts, graphs and written synopses. Thanks to this project, instead of just hearing a statistic of how many people in Flint, Mich., live in poverty, for example,  you can see it visually represented on a map.

For Immigrants Waiting on Paper Bureaucracy, This Online System Could Be the Answer

One of the problems stemming from the recent surge of child refugees into the U.S. from Central America? Each applicant could wait years before their immigration cases are processed, thanks to our backlogged system (the United States Citizenship and Immigration Service, or USCIS, receives millions of paper applications each year).
The people behind a San Francisco-based company, FileRight, think they have the solution: an online system for filing immigrant claims, which will allow individuals to fill out their own forms without hiring expensive lawyers — similar to the way that the software TurboTax enables citizens to complete their own taxes online. These forms can then be digitally processed, potentially speeding up the process.
Now, FileRight just has to convince the government to allow online applications.
According to Megan R. Wilson of The Hill, FileRight hired lobbyists in January and has been meeting with Obama administration officials.
Cesare Alessandrini, founder and chief executive of FileRight, is the son of Italian immigrants who got the idea for the program when he was trying to help his soon-to-be Argentinian wife apply for citizenship. “I had two options: I could have hired a lawyer for $5,000 — which I didn’t have — or I could do it myself,” he tells Wilson. “How hard could it be?”
Alessandrini found the application process confusing and complicated — even for a native English speaker. So he began designing FileRight, a system that could help some applicants avoid denials for small errors such as spelling mistakes or writing on the wrong line, which are routine with the current, paper-based system.
FileRight isn’t the first company to attempt to digitize the immigration process. As we reported in February, Clearpath Inc. is also developing software to streamline the visa application process.
Regardless of which company’s software proves the most effective, it seems likely that digitizing the process will certainly help relieve some of the immigration backlog.
MORE: Meet the Entrepreneur Creating a ‘TurboTax for Immigration’

Rachel Haot: Government Culture Isn’t in the Way of Technological Adoption

Rachel Haot is the Chief Digital Officer and Deputy Secretary of Technology for the State of New York. She was recruited to that position after serving for three years as Chief Digital Officer for New York City. As part of Mayor Michael Bloomberg’s administration, Haot authored the Digital Roadmap for NYC, which included plans to bring WiFi to public spaces, expand digital access and upgrade the user experience of city government online, among many other things. Before joining City Hall, Haot founded the citizen journalism platform GroundReport and ran her own digital strategy consulting company, Upward. She has also taught social media and entrepreneurship at Columbia Business School.

The Competition for Disaster Relief Funds Heats Up

When you think of disaster relief, the words that probably come to mind are EMTs and paramedics, FEMA, and the Red Cross.
But for President Obama, it’s competition, resiliency, and natural disasters. These words — together — form his new plan to help with disaster relief.
While that may sound a bit odd, it encourages state and local governments to compete for natural disaster relief funds from the federal government. With $1 billion at stake, Obama challenged communities to create sustainable plans to rebuild and reboot their communities.
With the National Climate Assessment’s report released last month detailing the imminence of climate change, Obama’s plan also comes with the hope of finding ways to combat it. Therefore, competing states should come up with proposals that involve innovative local resilience projects, policy changes, and adaptive plans for extreme weather and climate change.
State and local communities that were declared natural disaster areas between 2011 and 2013 will be eligible for $820 million worth of grants. States hit by Hurricane Sandy will have the opportunity to compete for an additional $180 million. Applicants are required to detail how the proposed action and the disaster are linked.
Winners will receive cash through the U.S. Department of Housing and Urban Development’s Community Block Grant. Already, a few winners have been named for the Hurricane Sandy competition. Here, a few of the approved projects.
The Big U in New York will protect Manhattan (West 57th Street to The Battery to East 42nd Street) from floods and storm water through the creation of a protective system. This part of the city is low-lying and culturally important, and the project will have environmental and social benefits as well.
Another is the New Meadowlands: Productive City and Regional Park, which will combine transportation, ecology, and development to connect and rebuild the swampy area between New Jersey and New York.
The Jersey Shore will also receive some funding with a focus on repairing the beaches and rejuvenating the communities in the area.
For a listing and description of the rest of the approved projects, click here.
With all of the natural disasters that have occurred recently, President Obama’s competition will hopefully encourage states and local governments to plan and prepare to prevent such devastating effects from occurring in the future — or at least, lessen their impact.
MORE: A National Effort to Boost Local Resources
 

Could More Education Increase the Number of Organ Donations in America?

Each year, about 400,000 Americans with kidney disorders undergo regular dialysis — a costly and time-consuming procedure — to remain alive.
Ideally, these people would receive kidney transplants so they wouldn’t have to spend hours each week tethered to a dialysis machine, but the demand for donated organs in the United States far outweighs the supply. (According to the PBS NewsHour, the wait for a kidney in America averages three to five years.)
Why, you might ask? In part, because many Americans just aren’t aware of how important it is to register as a potential organ donor. Add that to the fact that the topic of organ donation makes some people squeamish and unwilling to discuss it with loved ones.
But a series of new programs in Australia might provide a model for how to promote organ donation in the United States. Australia’s recent interventions have increased the rate of donation to the highest it’s been in 25 years. What’s the secret from Down Under?
Yael Cass, the CEO of the Organ and Tissue Authority told Sara James of the PBS NewsHour, “The key thing that we’ve done is that we’ve picked best practice from around the globe.”
Those include raising public awareness of the problem through media campaigns and offering paid leave from work from living donors. Additionally, the Australian government reimburses employers for the time donors take off to recuperate.
Australia also trained 600 health professionals in important techniques related to organ donation — such as how to broach the topic of donation with grieving families. They also created a kidney donation database that registers and compares the stats of the chronically ill waiting for kidneys with those of potential donors.
These efforts have increased the rates of donation in Australia by 60 percent over the last four years, Cass said.
The policies made the difference in Rosemary Wehbe deciding to become a donor for her brother. She didn’t want to lose income from her work as a photography teacher in Sydney, but because of the reimbursement program, she didn’t have to worry about that. Her brother, Simon, told James, “What is it like to feel like someone saved your life? I owe her my life, really.”
Let’s hope that the U.S. considers adopting some of these pro-donation policies and that more lives are saved as a result.
 
MORE: The Opera Singer’s Third Set of Lungs