Open Letter to Clients and Friends of Falcons Rock Impact Investments:
Welcome to Falcons Rock Impact Investments! I am honored and thrilled that you have chosen to visit our site and have taken the first steps toward sustainable and responsible investing.
We live in a world that is sometimes driven by selfishness and greed, rather than compassion for our fellow human beings. Our public financial markets are driven by short-term earnings, rather than long-term business sustainability. Speculators can drive stock and bond prices in the short term, often based on Wall Street analysts that have inherent conflicts of interest. There are skeptics who refuse to believe the overwhelming scientific evidence related to global warming, and therefore encourage the development of industries that are harmful to our environment. The drive for short-term profits serve as justification to some companies to ignore human-rights violations in their supply chain and to treat their employees as labor inputs rather than living, breathing members of the greater society.
Fortunately, a movement is underway that promotes the power of private capital to make positive changes in our communities and around the world. This movement is called Sustainable, Responsible and Impact (SRI) investment, and it is gaining incredible traction. Credible research has demonstrated that companies that were early adopters of policies that positively addressed Environmental, Social and Corporate Governance (ESG) issues have performed better financially than companies that ignore these issues. Investors are taking notice and over $8 trillion dollars in U.S.-domiciled assets now apply various ESG criteria in their investment analysis and portfolio selection…and we are lagging investors in Europe and other parts of the globe as they have long acknowledged that this style of investing is in the best interest of all stakeholders.
It is important to understand the power of private capital to make positive change. While governments can establish policies that set direction for environmental, social and governance issues, we cannot rely on governmental agencies for solutions to all problems. Likewise, while there is a tremendous amount of great work being done globally by non-profit charitable organizations and non-governmental organizations (NGOs), they are not all funded well enough to have the impact they would like.
One great example of the power of private capital for positive change dates back to the Anti-Apartheid Movement (AAM) in the 1960’s. This global movement put significant financial pressure on the South African government by boycotting the purchase of South African goods and divesting of assets based in that country. You can find old photographs of protestors around the world holding “Divest” signs in support of the AAM. Nelson Mandela has said that this global financial stand was a significant contributor to the end of apartheid in South Africa. So, the early days of “socially responsible investing” were born as organizations put pressure on companies by not purchasing stocks of corporations that violated their moral or ethical values.
Years later, after the apartheid system had ended, the power of private capital was again used to re-invest in South Africa. Creative mission-based financial organizations began lending money to previously outcast South African people in order for them to begin businesses. One such organization, Shared Interest, is said to be responsible for helping create over 2 million jobs for people in South Africa since 1994, combatting inequality and improving their economy…the power of private capital!
After working in the financial services industry for nearly 20 years and seeing how investment products were often created in the best interest of the brokers, banks or firms that sold these products, rather than for the primary benefit of their customers, I founded my first investment consulting firm, Falcons Rock Investment Counsel, LLC, in 2003, which offers fee-for-service investment consulting to institutional investors and wealthy families. We have done tremendous work as an independent fiduciary, meaning all our recommendations are made solely in the best interests of our clients. Falcons Rock has helped negotiate for lower fees for participants in 401(k) plans, uncover excessive investment fees being charged to non-profit organizations, and reveal conflicts of interest by brokerage firms. We develop customized investment portfolios for our clients, based on deep research and analysis, and offer a high level of personalized service to a select group of clients.
In 2014, I began my extensive research in the incorporation of ESG strategies in investment portfolios, and have become convinced that this approach can deliver good returns, mitigate certain risks, and have a positive impact on society. Clients of Falcons Rock have concern about global sustainability for their future family generations and have committed to or invested millions of dollars in SRI investments. However, I wanted to find a way to provide well-designed and diversified SRI portfolios to a wider segment of the population…thus, I founded Falcons Rock Impact Investments, LLC in 2016.
As a father, with three millennial-aged children, I understand the appeal of online services and share their passion for environmental and social responsibility. Of course, technology has appeal across generations…a great family friend, “Grandma Ann,” who is over 90 years old was one of the first people I knew to own an Apple Watch! At Falcons Rock Impact Investments, we use available technology to bring our expertise in designing responsible and impactful investment portfolios to a wide audience.
As you proceed through our online questionnaire, you will be directed to a portfolio strategy that is designed to help you meet your objectives based on your investment time horizon and risk tolerance. Our portfolio strategies are 100% invested in funds that incorporate different variations of ESG criteria. Based on their analysis, these stock or bond funds may exclude certain companies that are deemed to be harmful to the environment or have poor human rights records. They may exclude companies that manage their business in an unethical or non-transparent fashion. They may seek companies that have established policies to reduce their carbon emissions or toxic waste. They may invest in companies that closely monitor the human-rights records of their supply chain, or offer generous employee benefit packages to their workers. They may provide direct investments for community redevelopment in rural or blighted urban areas of the country. They may be attracted to companies that embrace diversity in their workplace and on their Board of Directors. No company has a perfect ESG record, but as shareholders of a wide range of companies, these fund managers can engage with corporate managements to help them improve their sustainability policies…we call this “shareholder advocacy” and it is another powerful tool for change.
At Falcons Rock, our mission is to provide our clients with well-diversified, sustainable investment portfolios that generate the double bottom-line of excellent risk-adjusted returns and positive social and environmental impact around the world. I am personally excited that you are on this journey with us!
-Greg Wait, Founder
Falcons Rock Impact Investments, LLC