Two bombshell articles landed recently. First a Bloomberg Businessweek piece titled The ESG Mirage, on how companies are rated (or maybe not) for their performances tied to Environmental, Social and Governance (ESG) factors. The article leads with the bold pronouncement that, “MSCI, the largest ESG rating company, doesn’t even try to measure the impact of a corporation on the world. It’s all about whether the world might mess with the bottom line.” The second article from Bloomberg reports that one of the largest rating companies – Morningstar – has just removed ESG tags from over 1,200 funds that it found were not delivering on those goals.
Why ESG is Important
ESG may have had its origins in a landmark 2005 study instigated by the United Nations and developed by 18 of the largest financial institutions entitled Who Cares Who Wins and delivered at a conference that included the financial sector, consultants, governments, and their regulators, all examining the role of the key value drivers in asset management and financial research.
Out of that study, the UN sponsored the development of 17 Sustainable Development Goals – now commonly referred to as the 17 SDGs – to help categorize the environmental and social impacts of investments. SDGs are now being used all over the world (albeit still too lightly in the U.S.) to help develop scoring systems for socially responsible investors who want to more clearly incorporate their societal values into investment decisions. For instance, most investors with ESG strategies view municipal bonds as inherently positive when it comes to environmental or social benefits, but until recently there has been little in the way of meaningful data to support their decision-making. But even with meaningful data available, it is the validity of the scoring systems that will now properly link that data to ESG elements for use in financial research, asset management, and brokerage/advisor services.
Real ESG or Real BS?
Starting as a “bland” company that helped develop indexes for the markets, the CEO and Chairman of MSCI, Henry Fernandez, had a supposed “epiphany” a few years back, deciding that his company’s new mission was going to “help global investors build better portfolios for a better world.” That sounds so nice! But as the Bloomberg article points out, the way that MSCI rates companies for its ESG scores may be mostly a greenwashing effect for a better financialized economy than anything to do with saving the planet or designing a better workplace.
And as a recent article in the Guardian points out, many companies central to the financialized economy are still boldly deceptive. After signing up to the U.N.-backed Net-Zero Banking Alliance a year ago, the largest of the European banks have since provided almost $33 Billion to oil and gas companies wanting to expand production. While similar data is still to be found in the U.S., my guess is we would find the same. Though these companies seemed to have had good intentions by making that pledge, the resistance from shareholders and prospective investors led them to continue funding these climate-damaging actions. It seems clear that many making pledges and promises to appear as “friends of the earth” are still willing to fall back to a shareholder primacy-driven mindset as friends to only profit.
Data to the Rescue
Asking companies to get real about their true impact on ESG is like playing whack-a-mole at an arcade. Imagine 17 holes where the Sustainable Development Goals pop up, and where the industry-manufactured “green-labeled” mallets smash them down, again and again, while issuing PR statements about how much they care. And though the number of socially responsible investors keeps growing at ever accelerating rates today, the number of ways businesses try to obfuscate their true impacts with almost meaningless green branding has kept pace. So far.
The good news is that the data behind how business and government organizations function, and how that impacts the 17 SDGs and other ESG metrics, is beginning to be captured and analyzed for transparency purposes in much more robust ways. For example, the women-owned and led Kestrel ESG (a Cutting Edge client), now offers a powerful ESG data product with both quantitative and qualitative insights on fixed income investments. And as Sara Olson – founder of SVT Group – points out in her recent article, other Impact standards such as Social Value International, Capitals Coalition, Impact Management Project and Science-Based Targets, are also providing better tools to understand what a “company’s risk to the world” may be. And now Morningstar has thrown down its own gauntlet of sorts, using better data to understand when asset managers’ claims about doing the planet or people any good are simply misleading and wrong.
These new ways of evaluating and scoring ESG are going to make the approach used by companies like MSCI, as described in the Bloomberg article, look irrelevant soon enough, and businesses will have far fewer ways of hiding behind their thinning greenwashed veils. And it won’t be only in the municipal bond world that these improvements happen. As more data today gets uploaded to the blockchain as a way of verifying all manner of content and actions, entities like municipal governments will need to up their game when it comes to transparency of bond-financed activities and intentional alignment with climate action and sustainability plans; and soon enough, these same scoring methods using better data on distributed ledgers will be available to rate and score all manner of companies, including private ones as well.
As the global climate catastrophe continues unabated, causing more unnatural disasters, as the data showing the ever-widening income and wealth gap becomes more transparent, and as we better connect, store and validate these data-dots to show the way companies are organized and governed, public outcries will grow louder and stronger as transparency increases. Behaviors that were once lionized purely for their focus on profitability will become vilified in the future; and if we are to make progress toward a safer planet and working environment, laws will need to be rewritten to acknowledge their detrimental impacts, or even making those actions and behaviors criminal.
You Might Run, but Can You Hide?
Which brings me to the role that law firms also play in all of this. Just as businesses will find it harder to hide behind the veneer of “responsibility” while continuing to honor shareholder primacy as their raison d’etre, the same will hold true for those who support the bad actors, with law firms at the top of the list. I predict that Big Law, and those striving to become ones, will begin to have their “McKinsey Moment” soon enough.
Employees at McKinsey & Co. have spoken up via 1,100 signatures calling their employer out for representing the largest polluters, and the giant PR firm, Edelmen has also been in the news, weakly trying to justify representing Big Oil while at the same time making bold statements about how much they believe in the environmental sustainability movement. And a recent NPR article provides more evidence of the failure of the major oil companies to live up to their own pledges to transition to clean energy. Companies like MSCI, McKinsey, Edelmen, multinational banks, big oil, and too many others that continue to practice strategic hypocrisy appear to believe that PR statements, pledges and a casual support of ESG will keep them safe, while they continue to pursue their shareholder-driven pursuit of maximum profitability. And it would be very naive to believe that these actions are taken without their lawyers’ blessings; they take great care to pass everything by them to ensure they don’t get sued. Meanwhile, the temperature gauge keeps rising; and the time we have left to fix things rapidly decreases every day. Open letters from your employees may be today’s approach, but if things don’t change soon, more radical actions will surely follow.
At a minimum, law firms will need to encourage their clients to assess and disclose their material impacts of environmental and social conditions, and on a client’s ability to meet those obligations. Those material impacts will require disclosure much like financial reporting is required today. Law firms should also be supporting their client’s positive steps required to decarbonize and improve social equity, as those will show improved valuations over longer terms.. But that will only be the beginning.
Have you Hugged Your Non-ESG Client Today?
Law firms provide an enormous role for clients – far beyond the transactional work of drafting agreements or supplying legal documents. They are counselors, advisors, and sometimes therapists to the C-Levels as the sea levels continue to rise. They are an integral part of almost all major decisions made, and they will fight to the finish on a company’s behalf – all in the name of their duty of loyalty they owe to clients.
But most importantly, law firms choose who they will represent. And (spoiler alert) it typically has to do with how much money they can make by battling to win and keep those gi-normous fees they charge. However, the unique expertise lawyers develop should not provide them a pass on being rated and called out for who they represent, or who they continue to help actually avoid the difficult and expensive work to make conforming ESG changes. Today they continue these practices all the while burnishing their “ESG creds” by the one or two good companies they may represent, or by the pro bono work they hand to their associates. But any help they may provide by doing some good ESG work is largely negated when they are still helping others who avoid it.
As ESG ratings and scoring continue to improve, and as transparency becomes not only the norm but someday baked into law (perhaps ever so slowly, thanks to those crafting such laws while pocketing donations from the same crowd), firms of all stripes will have a much greater challenge justifying their continued representation of companies that are causing us to drown, or burn, or suffer in so many other ways. Today, firms might brag about the light bulbs they’ve replaced, or the one woman or person of color they’ve added to their management team, but soon enough, they will be seen for what they really do, which is aiding and abetting non-ESG behaviors.
Every law firm must do a “conflicts check” before onboarding a client. Perhaps companies who truly care about ESG should start asking for their own kind of conflicts check from law firms. “We may hire you, but we first need to see your list of clients to be sure your work doesn’t conflict with and detract from the need to save this planet.” Law firms of all sizes may want to do their own internal ESG analysis to begin removing non-ESG clients before they too begin getting called out in ways that begin to damage their business and reputation interests. And for those firms that have already begun to take these actions, we commend you.
Cutting Edge Capital is a strategic practice of Cutting Edge Counsel. We help mission-driven enterprises and investment funds structure their organizations and design their capital raise offerings to be impact and community centered. Our mission is to help build a more just, equitable and sustainable economy. Schedule a call with us to learn more.
Following the recent successful TechSoup Regulation A+ offering, SVX.US is now introducing its new cohort of impact capital campaigns, including Medwave Software Solutions and Shared Capital Cooperative, with additional listings soon to follow. This seems a good time to reflect on why this platform is different, and why we partnered with SVX Canada to create a U.S. version.
Years in the Making
Cutting Edge Capital (CEC) has a long history of experience with alternative securities offering marketplaces, both at the national exchange level and for private or exempt public offerings. As GC at the Pacific Stock Exchange, I was an early advocate for alternative market structures, including the creation of Alternative Trading Systems for securities broker-dealers. Since then, CEC has advised some of the earliest alt markets, such as Mission Markets. Along the way, we became familiar with, and a strong supporter of, the SVX trading platform in Canada, which is focused exclusively on Impact. They in turn expressed a desire to work with CEC, due to our leadership role in advising and supporting community capital raises. As Rick says to Louis at the end of the movie Casablanca, it was “the start of a beautiful friendship.”
What we’ve learned is that, while issuers always need to find the right investors and vice versa, this is even more of a challenge for those in the “Impact” space where the focus is less on the highest returns and more on supporting companies who care deeply about environment, social and governance (ESG) issues – and who actually walk that talk. For impact-focused investors who don’t see true ESG/Impact choices in the national markets, it’s not easy to find issuers like TechSoup without already knowing about them. And though there are many more ways issuers and investors can find each other outside of the national markets, (e.g. broker-dealers, crowdfunding platforms, matchmaking platforms for Accredited Investors, or even an issuer’s own website), these other platforms neither curate nor limit their offerings to Impact/ESG. But we know there is a growing body of investors who want to see a company’s ‘return on impact’ to be as important as financial returns on investments (ROI) if not more so.
Why the Focus on Impact and ESG?
SVX.US was never meant to be in competition with these other sites that are agnostic to Impact and that focus on the chance for significant profits (whether that ever happens), or sites that embody a shareholder primacy approach that continues to scorch the earth in their wake. It does not search for the mythical unicorn or, like most all VCs, seek IPO objectives while discarding and shuttering 90% of those that can’t attain it.
Instead SVX.US is all about Impact – where companies with sound financials who have committed to doing things right for people, planet and environment can easily find support from an investor community that understands the importance and need. SVX.US offers a place for all kinds of organizations doing Impact capital offerings, whether for-profit, nonprofit, place-based funds, holding companies, CDFIs or hybrid entities. Whether conducting a Reg D 506(c) private offering with general solicitation, or a qualified direct offering (such as the Reg A+ done by TechSoup), we welcome any issuer that understands these critical issues.
Impact-focused investors have already shown their willingness to invest on SVX.US, and have expressed a strong interest in returning to find more like-minded issuers, such as a technology company like Medwave, which is saving lives by improving healthcare delivery globally, or Shared Capital Cooperative, which finances the formation and expansion of other cooperatives, and in turn helps communities build more just, inclusive and equitable local economies. SVX.US is a “social venture” platform where investors can find issuers focused in areas such as Energy and the Environment, Community Economic Development, Sustainable Food & Agriculture, Health and Wellness, Clean Water, Sanitation and Hygiene, Community Real Estate, Education, and digital technologies in support of those categories. We’ve created an Impact meeting place, for a wide range of offerings, such as a private raise of equity or debt, a qualified direct public offering, community and impact investment funds, cooperative capital, impact loan funds, or nonprofit capital raises.
What Should the Role of a Marketplace Be?
When we partnered with the SVX team, we made a conscious decision to avoid any funding that was not mission aligned, in order to specifically avoid external pressures contrary to its purpose. Up until 20 years ago, the national markets were not-for-profit organizations with no shareholders, only members. Today it should not be a surprise that our major markets have the same shareholder primacy pressures as the companies they list, all of which have little room for Impact oriented companies. Our intent is for this platform to instead mirror the kinds of issuers represented, and to show investors that these curated and listed companies have met stringent Impact tests. We witnessed firsthand the mistakes that were previously made in attempts at building alternative markets with a primary profit objective, and we’ve now created a safer place for Impact, where we can keep issuer costs to a minimum and allow the companies we serve to use their resources where they are most needed. We help issuers manage their raise, from their conversion of potential investors, to communications and tracking. The platform handles impact capital articulation, strategies of offerings to consider, all aspects of comprehensive KYC and investor information collection, deal room prep, document review, digital subscription agreements, and a streamlined transaction process in a secure and compliant way. Finally, we help issuers with the referral services they may need, including marketing and legal support.
For impact focused investors, we offer a curated list of Impact companies, along with the information and support they may seek to understand this space better, even including referrals to investment advisors who are mission aligned. Without ROI pressures, or the heavy burden of paying transaction compensation, SVX.US issuers have more freedom to shine the light on their ESG actions and toward a community of investors who care about the same. A beautiful friendship indeed.
This week, the Department of Labor (DOL), headed by Eugene Scalia, announced a proposed rule intending to “update and clarify” the DOL’s investment duty regulations relating to ERISA Plans. DOL intends to impose a ban on any fiduciary managing an ERISA plan if they have anything but pure profit as a primary investment goal.
The new DOL clarifications intend to put ESG in its place (down to the sub-basement) by proposing that ERISA plan fiduciaries, if following their “duties of prudence” may not consider “non-financial objectives” (e.g. ESG) if those goals “subordinate return or increase risk for the purpose of non-financial objectives.”
Clearly DOL seems to understand better than the growing surge of people now looking for impact investments. We are all now being schooled by DOL that those considerations are non-financial – meaning that they have no connection to any sort of financial bottom line.
DOL wants to make very clear that material economic risks like ESG considerations are not goals to be followed under “generally accepted investment theories.” And though DOL declines to cite what those generally accepted theories might be, we can easily assume they are referring to ‘Uncle Milty’ Friedman’s Capitalism and Freedom manifesto that gave prominence to the Shareholder Primacy campaign successfully waged on us since the late ‘70s.
No one should be too surprised by what DOL is trying to do here, especially with Mr. Scalia now firmly entrenched. As Senator Minority Leader Chuck Shumer stated during Scalia’s confirmation hearing process, “Mr. Scalia’s life work has been utterly opposed to the mission of the agency to which he’s nominated. He has sided repeatedly with the large corporate interest against the working people.”
But wait! Didn’t Senate HELP Chairman Lamar Alexander (R. Tenn.) say, during Scalia’s nomination hearing that “[i]t is important for the Department of Labor to create an environment to help employers and employees succeed in today’s rapidly changing workplace…”??
Perhaps the confusion is that Alexander is using Newspeak while we are still trying to make sense of things in English.
Indeed, offering rules to weaken attempts to allow retirement accounts to invest in companies that are focused more on the long term betterment of our planet, society (employees, stakeholders and better governance models) and our local communities certainly could be seen as contrary and anemic by those following Uncle Milty’s “generally accepted investment theories.” But those are raw, blatant and childish attempts at protecting the beloved Shareholder Primacy ideals. (Hey, if we can’t get enough judges to rule that Shareholder Primacy is the law of the land, let’s get it inserted in any rules we have power over).
These kinds of shrill attacks on any attempts to reign in our hyper-capitalist ways may still have some short term successes, but the trend is now turning away from that system that is destroying our ability to live decent healthy lives – and to see why ending injustices at all levels will actually preserve, not diminish, our future health. Even if this rule is imposed, savvy investment fiduciaries may understand that they will always keep as a priority the “financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action” and avoid any “subordination of the interests of plan participants and beneficiaries in retirement income and financial benefits,” while also looking hard at the ESG factors that they understand will meet those goals over the long term.
In announcing the proposed rule, Scalia says that “[p]rivate employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan, Rather, ERISA plans should be managed with unwavering focus on a single, very important social goal: providing for the retirement security of American workers.” Oddly, he left out making America Great Again, but whatever.
As the DOL press release states at the end, “[t]he mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights” (emphasis added). Might efforts to help employees succeed in their workplace create better long-term financial results? Wouldn’t giving employees a seat at the governance table give companies a better chance of long-term success by enriching the environments of the workplace, their health and safety? I wonder if Senator Alexander understands that those efforts might, at first blush, look like they are reducing short term profits, but instead, establishing long term success for a company.
And maybe, just maybe, regular folks with retirement accounts and their fiduciaries see that as well.
Clearly, Mr. Scalia feels that no other goal but Shareholder Primacy is important enough to consider. Not the fiduciary, nor the beneficiary with funds in a retirement account who may beg to differ. Scalia wants to make clear that only he and his DOL gang know what is best for retirees, and impacts caused by a warming planet, employees treated like serfs, and patriarchal rulers of boards obviously have no significant effect on those financial results.
Mr. Scalia and those that put him and his boss in power for now should pause to reflect on Martin Luther King, Jr.’s reminder that “the arc of the moral universe is long, but it bends toward justice.” Funding goals that bend toward justice for all seems like a good, material and sound financial objective to us, and is becoming a generally accepted investment theory.
At this week’s ComCap17 Conference in Monterey, CA, one of the sessions that I participated in dealt with the roles of financial, legal, and business professionals as it relates to community capital.
Our panel was moderated by my old friend, Michael Shuman, and we were joined by other professionals who provide technology (Amy Wan), platforms (Youngro Lee), regulatory oversight (Faith Anderson from the state of Washington), and a refreshing and much-needed approach to community investment advisory services, which Angela Barbash of Michigan’s Revalue Investing provides.
Revalue Investing is a great example of an advisor leading this movement of new professionals who are willing to work with individuals to help them understand the risks and rewards when contemplating local, unlisted investments in companies that the large advisors refuse to consider. Revalue overcomes the large advisors’ risk aversion and limitation of liability by deploying smart disclosure methods. They know that by remaining agile, nimble and sized-right for communities, they can navigate through those risks without laying down heavy-handed restrictive practices.
My contribution to the session was that for community capital to be successful, we need professionals to participate with a different mindset and approach compared to what otherwise happens in a globalized and anonymous hyper-capitalist system that has almost nothing in common with community capital. Today’s uber-financialized economy does, however, have one essential connection back to communities – it needs to plug in everywhere so that it can extract far more than it contributes. That is one of the essential ingredients behind the myth of shareholder primacy.
Many of today’s professionals like to boast about their ability to charge as high of fees as whatever the market will bear. And because that approach mirrors how their clients behave, there is a built-in circular support system that gives no outward thought to how their actions directly contribute to our accelerating global crises, including the depletion of essential resources, climate change and state failures.
One important antidote to this flat-world mentality is the work happening on the ground, in communities, all over the world. Work by people who understand the value of strengthening community bonds, and fostering the recognition that without each other’s support, we end up as weak as our weakest link in the community chain.
Successful community capital markets are going to require professionals to operate under a new paradigm, and businesses in turn need to self select out of the professional system that contributes to damages to their communities by utilizing those professionals that have committed to work for fair and reasonable wages. This new paradigm no longer tests the limits of what businesses can bear, but instead adopts a reformed service model that does not force those companies to have to pass on the higher costs to their customers, and their community.
With few exceptions, community support relies on its own members, not from those extracting wealth from the community and into the out-of-town bank accounts of a very small group of exceedingly wealthy families. That kind of extraction leaves in its wake an ever increasing income and wealth gap that multiplies the damages to the health and well-being of a community, and professionals who don’t work to counter this impact are in turn contributors to it, and partly responsible for the effects.
We need a new breed of professionals who come to work each day with a different kind of commitment, and a revised expectation of compensation. These professionals must help the rest of the community to understand that for a community capital market to thrive, we have to think about a different way of investing in ourselves, where “returns” and “exits” are not the primary reason to support businesses, and where people primacy takes the place of the old shareholder primacy myth. As Michael Shuman added, this may call for the adoption a professional’s fiduciary responsibility to the community itself, not just to any one client.
This kind of self-imposed fiduciary responsibility to the community would mean curtailing work that is at odds with the needs of the community. It would call on professionals to select out of providing services that contribute to the extraction, and to bring their fees into alignment with those that need their help. It would call on professionals to challenge the myths, like shareholder-primacy – myths that foster the continued support of the extractive economy, and to examine and build practices around a more fair and just society.
These approaches by no means require taking a vow of poverty. For professionals to be truly effective for their community, they should align their mission and their compensation with the same expectations as those community members they serve.
Doing well by doing good may not go as far as community needs it to go. Doing well enough and doing good may be more to the point.
Foundations, Families and Funds can play a very important role in helping to redirect capitalism toward a more fair and just application, while also finding the right social enterprises to support.
By playing a more comprehensive role in the creation and support of Community Capital Markets, these funding sources can build impact into a systemic approach. In addition to investments they make into the social enterprises either directly or through other intermediaries, they can also facilitate opportunities for the 90% of households that are prevented from participating in the private capital markets by investing in the structures that form alternative capital markets open to everyone.
We are better informed today than ever before about the rapidly expanding wealth and income gaps. Many recent studies show the top 10% of U.S. households now have over 75% of all the wealth in America. The next 24% of American households make up almost all the rest of all the wealth, leaving the bottom 40% with 0% wealth, and the bottom 60% with a whopping 3%! And the gap is growing fast, not shrinking, which portends many new challenges to our society.
Clearly we need to think about whether the current approaches are working, and if not, shift the paradigm.
As economists like Thomas Piketty have thoughtfully surmised, this growing gap will not improve without either government intervention or opportunities similar to what the wealthy have had – i.e. the same chances to invest and to begin to grow some wealth of their own. For anyone out there who follows the current dysfunctional state of our government, I would not hold out much hope for the first option anytime soon.
Regardless of the causes, our current state of affairs seems to point toward us having to right this very serious problem ourselves, and right it we must.
In the U.S., our government actually limits 90% of households from having any access to the private capital markets, leaving their investment options only in either the public capital markets, or alternatives that I’ve written about here, via Direct Public Offerings, or perhaps through the new state and federal crowdfunding options.
The irony is that, in the interests of protecting the 90%, only the very wealthy 10% continue growing their wealth. They have access to opportunities that far surpass anything found in the public capital markets. The 10%er’s may also use the public capital markets to hedge, speculate, or even arbitrage if they like, but their real wealth generation comes mostly from those private markets. But neither of these kinds of markets helps us to form the systemic structure we need to build healthier communities.
Which leads me back to how Foundations, Families and Funds can help.
The list of impact investors is growing every day, and we will all continue to work toward better identification of who is truly acting as a social enterprise, e.g. companies building business models to tackle some of the most difficult and seemingly intractable social and environmental problems, including climate change, poverty, water, energy and real estate, etc.
I refer to the entrepreneurs above as our new community of social enterprises, which includes those with a clearly defined mission, who are focusing on achieving impact at scale for all stakeholders (workers, customers, community, environment), but who also understand the importance of connecting via deep impact into their local populations. These kinds of entrepreneurs place a high degree of importance on the generation of mission aligned revenues (from clients or others who’s mission is aligned), and tracking/publicly reporting on their impact on a regular basis (transparency).
It’s encouraging to know that many investing organizations are now looking to make real impact via their investments by seeking out these entrepreneurs, even if we’re still in the nascent stages of trying to square that with the goal of getting back “market rate returns.” Leslie Christian just posted a great blog on this conflict here.
However, supporting those entrepreneurs with an investment is only one of two key components we need to have a healthy Community Capital Market. Focus also needs to be provided to the 90% of households so they can participate as well, even if half or more of them currently have no wealth to employ as investments into a market. These households need opportunity, which they are now starting to see with the alternative investment vehicles mentioned above, but even more important, they need experience, education and understanding in terms of what it means to be an impact investor – one that may not need those “market based returns,” whatever that means.
We need a whole system approach in place for community investors and community entrepreneurs to be able to find each other, which is what a Community Capital Market can be.
10 years ago, my good friend Don Shaffer (now at RSF Social Finance) and I embarked on a project to develop Local Stock Exchanges. I wrote about the need for these in several publications and even took a position at the Boston Stock Exchange to mirror a national exchange at a local level. But looking back, there is one critical element I got wrong. We don’t need to replicate the public capital markets with a lively secondary trading component that fosters speculation and arbitrage (using the need for liquidity to justify the madness they have become). We need a much more simple system in place that allows for the efficient transfer of individual’s savings into socially responsible companies, allowing for modest healthy returns, and some reasonable offerings of an exit if necessary. We need to power it with the right tools, education and mentors to help guide the ones that have not had access until now. We also need to reconsider what a capital market needs to be today, and not fall for the trap of manic returns and unlimited growth.
Foundations, Families and Funds can get behind this new kind of capital market by funding the system that can facilitate the Impact we need, and if they desire, they can also play a member-based role in how we operate it – much like exchanges used to be structured, before they turned into the same shareholder primacy driven entities that list on them today.