I came to my work in impact investing because I was bothered by the inconsistencies between the green lifestyle I was trying to lead and the investments I was making in my professional life. I came to realize that no matter what I did at home in terms of recycling, supporting environmental or social causes or being a conscious consumer, these positive behaviors and consumer choices were dwarfed by the negative effects of the investments I was making as an equity analyst and portfolio manager at a large conventional asset management firm.
I studied zoology at the University of Edinburgh because I was inspired by naturalists such as David Attenborough and Jane Goodall and the world of discovery and ecological balance that they presented to me. The reality of that field was somewhat different than advertised: I spent much of my time in a basement lab collecting data for my thesis watching defecating worms through a microscope. This was not the glamorous career path I had envisioned, so when I graduated I went to work for a large, traditional investment management firm where I learned the rules of finance. I figured that it was useful to know the rules of the game before you set about trying to change and improve the system. I became a portfolio manager, managing about a billion dollars before turning 30. However, I became increasingly disillusioned by the greed I saw around me and was not hopeful that it was possible to drive true change within an established firm. Tinkering around the edges, sure, but not the type of radical change needed to disrupt our current paradigm.
Two events inspired me to make a change in my cushy career. The first was witnessing my colleagues in a serious, straight-faced discussion on the investment merits of child labor. When a large foundation client asked us how we made sure that the companies they were invested in didn’t use child labor, we made a few placating noises and upon returning to our desks after the meeting laughed at the question because it was obvious that child labor is cheap labor and lower labor costs are good for shareholders.
Then there was a research trip to visit a mining company in the Siberian city of Norilsk, above the Arctic Circle. That place looked like a scene from the darkest bit of The Lorax. The few remaining trees were stunted or dying, and where it snowed, the snow was black from pollution. There was no safety equipment for the workers in either the mine or the smelter. When I tried to ask questions of management about what I was seeing, I was patronized and I didn’t have the expertise to push back on what I knew was greenwashing. The investors I was with seemed totally oblivious to the destruction and despair surrounding us. Naturally, we enthusiastically invested and made buckets of money.
Many of the clients of my old firm were foundations, and the firm understood its fiduciary responsibility in terms of maximizing their returns and growing their assets. Yet, in an uncomfortable irony, their money that was set up to do good work was funding activities that were directly contrary to the purpose for which the funds were originally granted.
At that point, the cognitive dissonance that had been buzzing around the back of my head for some time grew too loud to ignore. I knew that I had to find a better, more moral way to use my skills.
My then-boyfriend, now husband, and I used the privilege afforded to us while working for wealthy companies to quit our jobs and travel around central Asia, Siberia, South East Asia and the Antipodes for 18 months, much to the chagrin of our families who were worried for our careers. We spent a few months post-tsunami volunteering on a construction site in Southern Thailand, helping to rebuild a village, and spent enough time in Australia for me to volunteer at the Institute for Sustainable Futures at the University of Technology Sydney (UTS) and the Australian Green Building Council. It was by far the best investment we have made in ourselves! We then made our way to Boston where I am originally from and after a lot of cold-call networking I got a job at what is now VigeoEIRIS, heading up the US office for the ESG research group. While it was an enormous pay cut from being a fund manager, I learned a fantastic amount about sustainability issues and how to research and ask probing questions of companies about ESG.
I then found my way to Zevin Asset Management in 2009 as their director of socially responsible investing and became president in 2014. Our majority women-owned and led firm offers both wealth management services as well as institutional money management for families and foundations with a commitment to social justice and active ownership that upends and challenges the traditional money management paradigm. Our mission is to secure returns for our clients while creating and guarding a legacy of integrity that critiques the unethical status quo of our capital markets and pushes for genuine, positive impact at powerful companies.
I’m fortunate to be a significant shareholder in Zevin Asset Management and have my pension, 401k and IRAs invested in our strategies — I’m definitely eating my own cooking! Even though I can understand the thrill of investing in private companies, it’s not for me. I don’t love the idea of having significant capital locked up in something I can’t control as I am inherently very risk averse with my own money.
That being said, I own my own home along with my husband — not an insignificant asset in the People’s Republic of Cambridge, Massachusetts with its precipitous real estate values but we think it’s worth it given its urban setting, green spaces, and politically like-minded neighbors. This has been our most significant investment to date and luckily one of the best performers so far! We have also accumulated a few rental properties over the years and were excited to put solar panels on all of them, with a fantastic payback. We broke up with our megabank years ago and have accounts at local banks and mortgages with credit unions. I’m also excited about my investment account at Cnote, the women-founded fintech platform as a way of investing in entrepreneurs who are women and people of color. Along with climate change, economic inclusion is the biggest challenge our country faces and so I’ve steered my personal investments towards having impact in both these areas.
I think it is important to also mention personal giving when describing investments. For me, it belongs on my impact investing spectrum not as a loss but one with a huge, hopefully, social or environmental return. There are many social challenges and organizations that require donations, not investment. My giving is concentrated with grassroots groups, typically in the southern US and led by people of color, who advocate for economic inclusion and radical social change. I feel strongly that for the most part, this type of change cannot be done within capital markets. Impact investing is an exciting tool but not a silver bullet.
As a professional investor, I feel a great responsibility to lead by example. I have made a choice not to squeeze every last bit of return out of my personal capital as that comes at the expense of either other people or the environment. While I can always do more and aim to keep evolving in my journey towards having more impact, I’m proud of my investments in areas that I feel my money can make a difference while also making a reasonable return.
This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Historical performance is not indicative of any specific investment or future results.
- Sonia Kowal, President, Zevin Asset Management
