Pacific Coast Business Times: "New alliance spurs social investments on the Central Coast" by Marissa Nall, Friday, April 20, 2018

Some Central Coast financial advisers are convinced that doing good and making money aren't mutually exclusive.

With the increasing popularity of impact investing and entrepreneurial ventures come added benefits in terms of a second and even third bottom line.

For consumers and investors who want to align their values with their spending, experts point to several tools. They range from socially responsible investing portfolios to angel investments in regional startups working in the energy, environment or social business fields.

"I think a lot of us came at impact investing because we worked in the business world and we saw that traditional business models weren't really addressing social issues," said Jonathan Gartner, chair of the Sustainable Change Alliance, which holds educational events and aims to promote and develop sustainable impact investing opportunities on the Central Coast. "There are a lot of social issues that were being addressed by nonprofits and governments that weren't being solved, so we thought from the business side maybe there were ways of doing things better."

Gartner said momentum is coming from investors themselves who are looking to line up their wealth with their values, beyond simply the clothes or the coffee they buy. And as returns on socially responsible portfolios, or SRIs, catch up to traditional funds, they no longer have to sacrifice income to do so.

"Using the power of capital and the discipline of markets and all of the quote-unquote 'rational decision making' that comes from the business world, you could do things that address social problems, environmental problems, other problems," Gartner said. "And it turns out that there are literally trillions of dollars chasing this."

Sustainable Change Alliance has put a couple hundred thousand dollars to work among a handful of investments, Gartner said, with the goal of supporting local jobs in the sector.

"There's a very healthy startup community here," Gartner said. "And it turns out that for a lot of these entrepreneurs, the idea of doing well and doing good is actually part of their corporate DNA. It's how they built their business, it's what they care about, whether it's sustainable agriculture or clean energy, this is what they do for a living."

And unlike areas with more institutional money floating around, the investment community in the Tri-Counties "tend to have a much more cooperative or collaborative arrangements," he said. "Why wouldn't I want someone else who's smarter than me to invest in the same company? That's probably one of the additional secret sauce things that Santa Barbara has, more than other communities."

Supported by membership dues, the Sustainable Change Alliance aims to be a conduit for potential impact investors to meet local companies such as Santa Barbara startups Parker Clay and the Sustainable Health Enterprise, or SHE, which create products that support women in developing countries.

"As they grow, people can invest in and promote the lifestyle of these women and some men in the company, giving them the opportunity," said Kiah Jordan, founder and impact strategist at Santa Barbara-based consulting firm Impact First Financial. "Unfortunately, something like that at that scale is a private placement that requires an accredited investor, so there are still some startups that are not accessible."

As sustainable business models enter the mainstream, more tools have become available to widen the access, Jordan said.

"The history of social investing started off as just taking the S&P 500 and screening out the bad players," said Kieran Osborne, chief investment officer at Mission Wealth in Santa Barbara.

But not only did that approach underweight investments in some industries and increase risk, "you're missing out on some of the best players out there. You're not even searching for them, you're just kind of getting rid of the bad guys. That's the whole intent of how we approach SRI investing, we want to take an inclusionary approach."

Mission Wealth's social values portfolios create a basket of stocks that mimic the broader market and rank highly on a scorecard of environmental, social and corporate governance practices.

"Then we can take it a step further if a particular investor is really passionate," Osborne said, including affirmative screening for things like women and minorities on the board of directors or screening out testing on animals. Central Coast investors, "tend to be more aware about the benefits, and there's just a higher demand for this type of investment, so it's only going to grow over time, which should naturally be a positive for local businesses that are tilting toward those types of investments."

Momentum also comes from regional universities, including UC Santa Barbara's Bren School of Environmental Management, Jordan said, Westmont College's downtown social entrepreneurship program, and similar programs at Antioch University, CSU Channel Islands and the Scheinfeld Center for Entrepreneurship and Innovation at Santa Barbara City College.

"As demographics shift and change, this younger generation is going to become wealthier over time and have more money to invest, so naturally you should see some more money shifting to those companies," Osborne said. "It just makes sense to happen here."

 

 

A message from Sustainable Change Alliance Board Chair, Jonathan Gartner . . .

I wanted to share some personal thoughts about the Sustainable Change Alliance (SCA) event held on March 27, 2018.  I enjoy the SCA events because I always learn something from our speakers, and the entrepreneurs who present their companies always inspire me.  But our recent event on Energy and the Environment really hit home.

Perhaps it is because of the recent fire and floods that have devastated our neighborhoods and brought tragedy to so many lives.  Perhaps it is because, of all the impact-oriented themes we have presented, the environment is the one issue that resonates most profoundly with the SCA community.  Or perhaps it is because our speakers spoke with a wonderful combination of deep technical knowledge and a palpable passion for sharing their mission.

Regardless of the reason, the event showed me why I love being part of SCA. 

Sigrid Wright, CEO of the Community Environmental Council, joked that she was a horrible dinner party guest because before the soup is finished she is already talking about heavy topics such as climate change, severe weather events, and the threats to our surrounding environment.  Yet I found Sigrid’s presentation to be fact based, realistic, and compelling.  We really are suffering from more frequent and more severe weather events, we really are approaching the limits of the environment to absorb the effects of our lifestyle, and we really do have limited time to make significant changes.

If Sigrid sobered us, our next two speakers, James GP Dehlsen and Catherine von Burg, gave us optimism that there are very real solutions to the issues of generating and storing clean energy. 

Jim is widely considered to be the father of the American wind power industry and he is now turning his very impressive technical and leadership skills to harnessing the power of ocean currents and tidal power.  The American South-East is a bit of a black hole in terms of installed solar and wind power.  Yet, the energy potential available in the Gulf Stream just off shore dwarfs the land-based clean power sources.   Jim’s firm, Ecomerit Technologies, is working to develop the technology to harness this energy source.  Having proven his ability to build a clean energy industry on shore, it will be absolutely fascinating to watch the developments in the underwater energy world. 

Regardless of how it is generated, a fundamental issue for energy consumers of all types is how to manage and store energy so that you can have access to it when, for whatever reason, the grid is not able to provide it.  Catherine’s firm, Simpliphi Power, is providing that storage solution through sophisticated deployment of batteries.  Catherine was introduced as a woman who just loves batteries and her knowledge of the industry, and passion for the solutions it brings, was evident through her presentation.  The battery industry is very complex as it involves sophisticated chemistry, a complex production chain, and is subject to many hyped claims and counterclaims.  Simpliphi, based in Ojai, is bringing practical solutions for companies, individuals, the military, NGOs and other users.

Finally, in our members-only reception after the event we were joined by Congressman Salud Carbajal.  What a perfect Santa Barbara afternoon.  We learned a lot, had the opportunity to get a bit of insight into two interesting investment opportunities, and then got to socialize with our Congressman!

As a follow-up to this meeting, a group of meeting participants will join an on-going committee to start the dialogue of what the vision of resilience for climate change is in Santa Barbara.  What does resilience look like and how can it be brought about?  Where does impact investing fit into that vision?  If you are interested in participating in that exploration, contact us at the website below.

It will be hard to top this most recent presentation but the SCA Executive Committee is already working on a number of events that will bring fascinating speakers and interesting impact investment opportunities across a wide range of themes; including disabilities, property, and diabetes. 

As always, if anyone wishes to learn more about SCA, feel free to reach out to me at info@sustainablechangealliance.org.  

Regards, Jonathan

The Santa Barbara Independent: The Virtues of Impact Investing

“The Virtues of Impact Investing,” The Independent (May 12, 2016): 39.

"After becoming disillusioned with the financial model and ineffectiveness of so many of the nonprofits around him, Peter Brill stumbled upon an investment alternative that is now beginning to make its way into the mainstream. Brill, a retired psychiatrist, UPenn professor, and business owner, is bringing impact investing out into the Santa Barbara sunshine."