This week I had the great privilege of joining the American Rivers board and staff on the American River in California’s gold country. American Rivers is a national non-profit organization combining advocacy with field work in key river basins to protect wild rivers, restore damaged rivers to bring back wildlife habitat, and conserve clean water for people and the environment. They are practical problem solvers with positions informed by science.
As a solutions focused impact investor, it is important for me and my Nia team to be aware of the most pressing issues facing our natural ecosystems and stay up to date with the most current environmental research. Partnering with and spending time with the experts is one way that we stay current on ecosystem research, field work, policies, and activism. Getting to do all of this while river rafting might just be the best summer time event.
Over dinner in camp, California regional director Steve Rothert shared the American River philosophy of “pointing positive,” a term kayakers and river rafters know well. Because verbal communication over loud raging waters can be difficult, paddlers use various hand signals to communicate with each other. “Pointing positive” is a common custom or understanding between river paddlers. Rather than pointing at obstacles to avoid, while on the river we point toward the desired destination or where we want the other raft or swimmer to go. For American Rivers staff, pointing positive means aiming for what they want to achieve, away from obstacles and toward a positive direction for healthy rivers. As Steve pointed out, American Rivers requires a unique approach, different from other environmental organizations. They conduct field research, build collaborations and partnerships, and persist in their efforts to achieve success.
In the theme of positivity, Board Chair Kimberly Milligan shared a proud accomplishment: the recent legislative victory for clean drinking water in South Carolina. John Cain, director of conservation and flood management, presented on the river restoration work in the Delta and the importance of building “multi benefit projects” where various stakeholder views and desired outcomes are taken into account. By adopting this concept of “multi benefit” they have noticed a huge shift in the way the Department of Water Resources and the California Legislature think about, and engage in, river issues and habitat restoration. They are now working to score environmental projects along various metrics including a region’s economic stability, societal goals, benefits to fish, farmers, and landowners. Aquatic ecologist Dr. Lisa Hunt shared her efforts to engage with the data, to mine it for insights to assist their preservation efforts. They spoke to the importance of quantifying both the issues to be solved as well as the impact of their work. Similar to recent impact investing events, “big data” was the buzzword of the evening.
By changing the framing of proposed river restoration and clean water conservation, as well as building collaborations with advocates, business and agriculture interests and other stakeholders, there is potential to change the way decision makers address environmental projects and issues.
As impact investors, we can learn from this “multi benefit” and “pointing positive” approach. Many in the field are looking for ways to measure success while incorporating the United Nations Sustainability Goals as targets for which to align our work. And yet, in public market investing, rather than focusing on where we want to go, most product offerings are still built from large muddied indexes, with portfolio managers using negative screens to filter out “obstacles” or companies investors many not want to hold. While the practice of passive indexing has become ubiquitous in investing since the 1980’s, choosing companies based solely on the country location or their cap size does not point us to the sustainable future we need.
At Nia, we encourage impact investors to take the “point positive” approach. Rather than focus on and filter out the negative, we start with what we want to achieve, and find those companies building sustainable solutions. We set our targets at the next, just, sustainable economy, and use research to guide us toward best in class companies addressing and solving for our world’s largest risks. We begin with our six solution themes and design positively oriented, solutions-focused portfolios from the ground up. In structuring our investment offerings, we are much like American Rivers in that we design them to meet multi-benefit requirements. Not only is each company in the Nia Global Solutions portfolio working to address one or more of the Nia solutions themes, each company also embraces diversity and includes women in leadership positions. We also take the “multi-benefit” approach by partnering with fellow asset managers to move the needle on social change, partnering with nonprofit organizations doing work on the ground, and engaging directly with our portfolio companies seeking even more inclusive and sustainable business practices.
Like American Rivers, we see the interconnectedness of different aspects of our work: climate solutions, our financial system, and where we as individuals, and institutions choose to invest our capital. At Nia Impact Capital we are practical problem solvers building research-based portfolios moving us toward the new inclusive and sustainable economy forward. We encourage all portfolio managers and impact investors alike to keep the end goal in mind and to invest in those companies and teams that are solutions-focused. Join us in pointing positive and investing for the future we want to see.