Socially conscious investing -- particularly ESG (environmental, social and governance) funds -- have weathered a fierce political backlash in recent years. But Kristin Hull, founder of Nia Impact Capital, was devoted to impact investing long before the letters "ESG" entered the mainstream. In a wide-ranging interview, she tells us what she thinks is the way forward for solutions-focused investing.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Nathan Place (00:08):
Well, hello and welcome to Leaders. My name is Nathan Place. I'm the retirement, and today we're talking about impact investing, which has grown much more popular in recent years, but also has faced significant obstacles. It's a complicated story. Fortunately, we have an expert with us here today, Kristen Hall, founder and Chief Investment Officer of NEA Impact Capital. And today we're going to be talking, as I said, about ESG impact investing and this whole type of investment. So Kristen, welcome.
Kristin Hull (00:40):
Thank you, Nathan. It's great to be here.
Nathan Place (00:42):
Yeah, thanks so much for being with us. So I want to start by talking about the terminology of this topic a little bit. Obviously there are a lot of different terms involved here. There's E-S-G-S-R-I impact investing, sustainable investing, but Nia Impact Capital focuses in particular on impact investing. Can you explain a little bit what that term means and why it's important?
Kristin Hull (01:04):
Sure, sure. In all of the investing, ESG is getting a lot of the media attention right now, which is really interesting. So environment, social and governance as opposed to, or as part of impact investing. And you also mentioned SRI, which is what we call kind of an old school, although those terms are still being used and that is socially responsible investing. And so socially responsible investing largely was about public markets, and it was about taking an index like the s and p 500 or the KY or the Russell 3000, and then taking out some of the bad players, oftentimes called the sin stocks. The nuns really started this movement, and so they were really focused on alcohol to tobacco, firearms, and now fossil fuels has kind of been added in as a syn stock as well as far as pulling those out. What we do at NA is we build portfolios one company at a time based on the revenues. So how are these companies baked for purpose across our six solution themes? So we are really focusing on specific companies that are having a positive impact.
Nathan Place (02:15):
So focusing on solutions rather than just on removing the problems
Kristin Hull (02:19):
In a sense. Right. And it's a different mechanism. It's a different way to, now that we have big multinational companies, oftentimes there's been mergers and acquisitions, and you don't necessarily know what a company is doing. It might be doing petrochemicals on the side. And so it really depends on how you're going to screen and what types of mechanisms. So for us, we find it easier to start with the solutions, find those companies are really having a positive impact and then putting those in a portfolio one by one.
Nathan Place (02:49):
Right, right. How does ESG figure into that picture?
Kristin Hull (02:53):
ESG is really interesting. It's a term that's become quite popular in the last few years, whether you like it or you don't, environment social and governance. And that really hasn't had a definition yet. So for me, it's really interesting to see the political polarization coming from what's pretty nebulous still as far as what are we defining? So I would say for us, we see that as a mechanism to look at a company or a portfolio with additional lenses. How is the portfolio both benefiting the environment or possibly how might it have some risks coming at it with climate change and how will the environment impact the company and how will the company impact the environment? We're not even clear which end of that is happening. On the social side, what do we mean by social? For us at nea, we're really looking at how is a company impacting society, and yet others are defining that differently. And then of course, governance is a little bit clearer. What is the governance of the company and is it strong enough? Can we do additional due diligence on the governance of the company to say, is this the team that actually can get these products and services to market?
Nathan Place (04:09):
Right. And of course, you alluded to the backlash before, and we have to talk about that. Okay. So in recent years, obviously a number of Republican politicians have come out very strongly against ESG Rhon. DeSantis made this into a big cause in Florida. More recently the Texas School Board banned BlackRock and other ESG friendly firms from managing their pension funds. What do you make of this backlash? Why do you think this is happening?
Kristin Hull (04:36):
Well, again, it's so fascinating that it's become so polarized and so political when really what we're talking about is smart investing. So I would imagine that across the aisle, we all want to do really smart investing, and yet some of ESG really means moving away from our incumbent economy and moving toward the solutions that we're going to need in the transition from our incumbent economy to what's going to be more sustainable, what's more regenerative, and what's also more inclusive. And so those can be really triggering terms for some politicians. And so what's interesting, you mentioned the teacher pension plans pulling away 9 billion from BlackRock because they see BlackRock as leading in the ESG movement. Well, those of us who are really doing this in authentic way don't even see BlackRock as leading in this movement at all. And as BlackRock has pointed out, they own a lot of fossil fuels and they're trying to say, wait, we're not, we do own a lot of fossil fuels in Texas. And so I'm saying, see, look, they're not even leaving an ESG, and yet we've kind of throwing out the baby with the bathwater with let's get to terms with what are these terms and what does it actually mean for your investment portfolios? And can we use this type of due diligence to do better, both financially as well as environmentally and socially?
Nathan Place (05:58):
Right. So do you think ESG can survive this backlash?
Kristin Hull (06:02):
Absolutely. ESG, whether it's going to be those terms, I don't know. I'm not saying that those were the right terms in the first place, but what is happening now is that we are actually having the conversation and individuals as well as pension plans and everything in between college endowments, large portfolios, are looking to say, are we ESG? Do we want to be ESG? What are the pros and cons of adding these additional layers to our due diligence and what will happen? And do we have capacity in-House to think about it that way? Do I have a financial advisor who understands these terms? So at least the conversation is coming up. And I believe that it's going to strengthen the movement, honestly, because we have individuals and we have CIOs across the world saying, well, how are we invested and what types of changes would we want to make? And so having that conversation, I think is the very first piece.
Nathan Place (06:59):
Right, right. Yeah. You've mentioned before that perhaps in a way, sorry, this backlash has benefited ESG because it's been a wake up call. Can you explain that a little bit? How has it woken people up?
Kristin Hull (07:12):
Sure. So it's given us a vocabulary whether we don't necessarily know what these words mean or how it actually impacts a portfolio. Your cousins and your aunts now know what this is, and it might be talking about it at the Thanksgiving dinner table. And so I think that in the most part, in the us, our culture, we don't talk about our investments and we're actually quite removed. We don't really know what is in our 401k our investments, and we might have a financial advisor, but with so many index funds that were index was kind of created in the sixties, seventies, popularized seventies, eighties, and now it's really just the water we swim in. So we have ETFs and mutual funds that might have 500 a thousand, 3000 companies in it. So no one really knows all of the companies in your portfolio. So to have these terms to say, well, what is happening I think is what's really going to wake us up and kind of opening up the hood to say, what is in my investment portfolio? So we're now part of this movement, I believe, will lead to us understanding what we own, so we can actually own what we own and then direct the money to the things that we really do care about. Right.
Nathan Place (08:24):
Yeah, I think that's an interesting point, and we've talked about that a little bit before that I think the way you put it was you get the economy that you invest in.
Kristin Hull (08:32):
That's right. We do. We do. So
Nathan Place (08:34):
Can you explain
Kristin Hull (08:35):
It a little bit? Well, sure. So it's not rocket science, and yet we see the economy as this amorphous big thing that individuals aren't really a part of. Maybe some parts of the SEC might feel that they're a part of it, but individual investors don't really see that. And yet collectively where we put our retirement fund, every single investment, every company that gets investments becomes a player in our economy. And so when we can change that, we can change geopolitical situations. I mean, we have a strong history of what happened in South Africa and investors really were the ones with the nuns leading a lot of that to divest from South Africa to make change. We are seeing some of that happening across some of the movement in Palestine where people want to divest from companies that are supporting different issues. Similarly, we can invest into those companies that we want to see grow.
Nathan Place (09:31):
Right? Yeah, absolutely. So in a way, and we talked about this a little bit in our interview for the story that's coming out, ESG is playing a role in sort of the evolution of investing. In the very beginning of our investing history, people were more active in terms of which stocks they selected or which assets in general, and then there was a shift to more passive investing. And perhaps now with more awareness coming from ESG, it might be shifting in the other direction. Can you explain that a little bit?
Kristin Hull (10:03):
Sure. Mean, and that's actually my hope that we will become more actively engaged and connected to our investments. So before the index was invented, putting together a portfolio for individuals or for institutions really was about stock picking and coming up with a diversified portfolio of maybe 20 companies, maybe 12 companies, something like that. Now with index, as I mentioned, 500, 3000, there's so many companies that no one really knows what's in any of these indexes. And then we kept this diversification kind of qualification or priority such that now you have lots of ETFs or index funds. So oftentimes portfolios can be over diversified, but really it's a bunch of who knows what this call for ESG is to really own what we own, know what we own, and then possibly become more active in directing what we own.
Nathan Place (11:00):
Right. Yeah. I spoke to some experts who said that often people end up owning multiple ETFs that have stocks in some of the same companies, and they don't even know ly, they've doubled up because people are so unaware of what's in the funds that they've invested in.
Kristin Hull (11:16):
And just to rip off that a little bit, that's actually something that we're calling attention to because back from modern portfolio theory that asked us called on us to diversify, that's actually a good concept. And we look at diversification even at a company level where our revenues coming from. We want to see a diversity of revenues, and we also of course want to see diversity and leadership on both executive team and the board. However, when you're talking about diversification of mutual funds, you are often having a repeat. And a lot of the top 10, particularly in this age of innovation, we're calling it or tech, have many of the same companies across. And so you're actually over concentrating,
Nathan Place (11:56):
Right. So what do you think is next for impact investing? Where does it go from here? How do you think it might evolve?
Kristin Hull (12:03):
So impact investing is going to really have its heyday coming up soon. We have a wealth transfer happening, so we have more women and more millennials and younger people making investment decisions, and that's only going to increase over the next five to 10 years. And those people in particular, those demographics really do want to align their money with their values and with the world that they want to see. And so I think we're going to see a call on investment advisors to have products that match some of the values for women and for these younger people that really do want a sustainable economy and they don't want to play a part in the fossil fuel economy, they see a lot of risks to that, both to their own personal issues with climate change and what they're experiencing, but also to their investment portfolios. And so they want to see also opportunities that come with some of the sustainable investing.
Nathan Place (12:59):
Right, right. Yeah. Can you talk about that in a little bit in terms of the incumbent economy versus the economy that's about to be born in a sense
Kristin Hull (13:07):
About that transition? Sure. So we're in it, right? We're in this transition and there's pockets of it thriving. I think each climate event is really calling attention to some of these issues. So when we are having power outages, what does an old grid that doesn't work during big storms, what does that mean? And do we need to have some micro grids? And that means a transition to maybe more solar and oftentimes wind energy. Some of these things where solar sun falls from the sky on most days, wind blows on most days, and the technologies behind those get better. Just with any technology, the price goes down and the technology gets better. And so as we transition, there's going to be a lot of opportunities for investors.
Nathan Place (13:55):
And in terms of our main audience of financial planning, financial advisors, what do you think they need to know about impact investing and ESG? What should they tell their clients about it?
Kristin Hull (14:08):
Well, I think one thing is being prepared because clients are going to be asking. And so being open to having the conversation and oftentimes really listening for the values, really listening just as a advisor would want to get to know their client. This is a real level where you can get to know your client and actually bring them products and services, financial products that match their values and where they can really be in alignment. So for financial advisors looking, learning terms like gender lens, it's going to be important. Centering women in investment decisions, making sure that they're choosing whether it's asset managers that are women, possibly people of color, also portfolios that include women in leadership. Some of these are going to become much more popular. So really nice for advisors to get ahead of the curve and learn some of this ahead of time.
Nathan Place (14:58):
Absolutely. And I think also a lot of investors and advisors as well, I suppose probably know the idealistic argument in favor of ESG and impact investing, but they might not really know the financial argument for it in terms of why this is a form of due diligence, why this is actually important for people's investments, not just for their ideals. Can you explain that a little bit?
Kristin Hull (15:23):
Sure. So there's a lot of research that we have now, and I believe that there'll be a lot more coming out soon. One of the things, diverse teams tend to perform better. And so you can think about eliminating any blind spots. You would want to have that on an investment committee. You would want that on your executive team or your board of directors. And so having diverse backgrounds, and there's some interesting, both research backed and then some anecdotal. When women are on a board of directors meetings start on time. Women are much more likely to ask questions when they don't understand, so before they will vote. So that's true across voting. It's also true on a board of directors. So if last year's numbers don't match this year's numbers, we want to know why and we're going to ask. And so it often can call attention to different processes that need to happen, and that happens when you add any type of different person with a different background.
(16:21):
So diversity really can enhance the process. And then also there's more innovation that comes from diverse teams. So having product teams that have diversity of ethnic background, even age, can be really beneficial for companies that are coming out with new products. So that's something as an investor we really want to see. And so is there a moral ethical issue about adding more diversity? And yet there's certainly an ROI return on investment to be gained. And then similarly, when we're talking about the E on the E, s and G, we want to know that our companies are prepared for any of the future that's happening. As we spoke about the storms that are affecting factories and flooding things, we want to know you have a plan in place, we want to know. So that really is just forward thinking that you would want to see any team. And then of course, those who care about stopping or mitigating climate change, we want to be part of those solutions. So really lovely when you can include some of the sustainable energy and the energy efficiencies for buildings in a portfolio.
Nathan Place (17:27):
Right. And not to mention there are just certain practical elements of being aware of climate change, being aware of how the economy is changing. I talked to one expert who mentioned real estate that if you invest in a real estate company, you want that company to be aware of the water damage, the wind damage, whatever might happen to a certain seaside property that they have. That's right. And if they're in denial about that or they're not aware of it or not thinking about it, that's a concern, not just on an idealistic level, but on a practical and investing level for the investors.
Kristin Hull (18:01):
Absolutely. It's right. So we talk, there's actually quite a bit of investment happening in Miami and that southern Florida right now. And yet sea level is rising, it is rising, and when sea level rises, it's not just the sea that's coming up. So we want to know that municipalities have the infrastructure and a lot of the pipes in all of our water infrastructure is actually outdated. So thinking about where you're building in real estate might be sitting in some of these issues is going to be really important.
Nathan Place (18:29):
Yeah, yeah, absolutely. Alright. What else did I want to ask you? I have so many questions for you. So I think we've talked about the kind of basic financial rationale for ESG and impact investing. You've also mentioned though that impact investing or at least ESG specifically might be in need of a little bit of a rebrand after the whole backlash that's gone well,
Kristin Hull (18:53):
This is interesting.
Nathan Place (18:54):
Right? Right. Yeah. Do you think the name might change or what's going to happen?
Kristin Hull (18:58):
So as I've kind of alluded to earlier, really this is just bringing a level of consciousness to what do we own? And so it almost doesn't matter what you call it, it's more that we're really looking at what is material in an investment and is the environment material, is it something that the people on the right who are saying, no, we don't want this. They're holding onto something that's really worked for them, and that is a lot of investment in the fossil fuel industry. And so I think that there's some feeling of being threatened by some of these newer technologies coming in that could take some of the market share. They inevitably will take some of the market share. And if we are all going to survive on this planet, they need to take a lot of the market share as we make this transition. So whether we're calling it e, s, or G, whether we're calling it impact, I mean, one thing to note about impact investing is that really all investments are having an impact. So we need to be conscious of is it having the, that we want to see, is it having a positive impact on society, on our own balance sheets, on our returns, or is it having a negative impact and having investors really helping to make those decisions,
Nathan Place (20:13):
Right. Yeah, absolutely. But you're confident that the backlash is not going to prevail. You're confident that ESG and impact investing will be able to weather this storm, so to speak, and move forward. What gives you that confidence?
Kristin Hull (20:28):
So because the proof is really in the numbers, the proof is in the pudding. And so those people that are adding this extra due diligence are going to be smarter investors. They're going to be aware of the risks, and they're also going to be aware of the opportunities using these lenses. And there's actually a study that came out in the fall that looked at pension plans for the last 10 years, and those that were not invested in fossil fuels did much better. So those types of studies are going to be coming forward where we're really going to be looking at what are the risks of being invested in some of these incumbent companies.
Nathan Place (21:07):
Right. And you know what, actually, that's most of the questions I have for you. But I'm wondering, is there anything that we haven't talked about that you'd like to add? Is there anything that you think our readers should be aware of when it comes to impact investing and the future?
Kristin Hull (21:22):
Well, one of the things we talked about a little bit is diversity. So when we talk about who is building the portfolios and who is making some of the investment decisions, that's also part of the impact because that can change our entire economy as well. And so I am an asset manager, and that means that at NI Impact Capital, we are one of the firms that make up 0.7% of the women owners in asset management. So less than 1% of our current investment decisions are made by women led firms. So when we combine that with people of color owned firms, we get to 1.3%. So people can actually have a really positive impact as well as diversifying their portfolio by choosing different managers. So that's something that I think we're seeing as a trend in impact investing is really look at who are the portfolio managers and who are the decision makers at that table. So that's kind of an under talked about and yet a growing trend.
Nathan Place (22:20):
Right? Yeah. And as you mentioned before, that can mean more innovation, people asking better questions at board meetings and so on. There are a lot of benefits to these companies. Not to mention just being invested in some of the energy sources of the future, I'm sure has a huge advantage for investors rather than being wedded to the energy sources of the past.
Kristin Hull (22:43):
And so just as you mentioned, as investors, we think about the tam, the total addressable market, and is that market growing or is it shrinking? And that's a very traditional question to ask of your companies. Absolutely. And yet to ask that question without acknowledging where our society is headed would not be prudent investing. So we definitely want to follow what is growing, what's growing in the economy, and then of course with investors having that role to play about choosing what's growing.
Nathan Place (23:11):
Right. Right. Absolutely. Yeah. As you've said before, every dollar has an impact, and you want to be aware of what kind of impact those dollars are having. Well,
Kristin Hull (23:22):
One more thing just about that is on the consumer spending side, we already know that women are in charge of about 80% of consumer spending decisions. So what type of tires get put on the car? What type of groceries get brought into the house? What type of vacations? Families go on. I mean, all of these things are 80%. The research shows that women are making those decisions. As this wealth transfer happens and women are brought into investment decisions, we do see the landscape changing. And that's something that I believe that financial advisors need to be ready for.
Nathan Place (23:55):
Yeah, absolutely. Yeah. Well, let's talk about that a little bit because I do think the great wealth transfer is going to have a big effect on this. Obviously the baby boomers are getting older, millennials are going to inherit a lot of their wealth and different types of people are going to inherit this wealth. Can you talk about that a little bit and the impact that that's going to have on impact investing?
Kristin Hull (24:16):
Sure. So what we're seeing with our clients is that the younger generation doesn't necessarily have the faith in our institutions, whether that's government and our financial institutions. So they're not going to go with a status quo portfolio. That's not something that's appealing to them, and they really don't want to have a part of that. So being ready to respond to some of the needs and the wants of this younger generation is going to mix things up quite a bit.
Nathan Place (24:45):
Right? Yeah, absolutely. How do you think you could incorporate impact investing into people's retirement investing? What impact do you think it could have on people's retirement plans?
Kristin Hull (24:58):
Yeah, so retirement is where a lot of our wealth is as a nation. So it's almost like a sleeping giant because most people are not paying attention or even know. So you get into a company and they don't necessarily give you Thursday afternoons to learn about investing. So a lot of these products are quite opaque. You have a ticker symbol, mutual fund ends in an x, ETFs are a little bit different, cash products a little bit different, but that they put you on some kind of a plan. And oftentimes it's a set it and forget it, which is easier for the company. It's easier for the plan, certainly easier for an investor when you're just not looking at it. And yet more of us with this call to ESG want to know do they have fossil fuels in their retirement? Could they have better returns in this addressable market that is growing it could they be shifting?
(25:51):
So as investors get more vocal, they then take their concerns, values, whatever they're needing to their advisors and asking those questions. And that's actually how we're starting this change. Individual investors do need to feel empowered and the system can be confusing. And so who do I call? Is it my hr? Who do I call? Who's in charge of making those decisions? So we do, I think asset managers, one of our responsibilities is maybe to help people connect those dots about who do they find out how to do this. And then the other piece, the US at least that gets a little more complicated is that we stay in our jobs two to three to four years, and then we move. And your retirement account doesn't necessarily move with you. And that could take a day or so of figuring out to make the phone calls to roll them all over. But once you roll those over, then it's one login, right? We love that for our clients because then they can just look and see everything on one screen. But then you've got, to your point earlier, a lot of over diversification with some of the similar funds having similar holdings. So there's a lot of opportunity to increase the impact in retirement investing.
Nathan Place (27:04):
Yeah, absolutely. Do you find that younger generations tend to ask for more of that kind of active approach to their retirement funds and things like that?
Kristin Hull (27:13):
Yeah, I think there is. Well, they don't have a layer of shame. They're younger that a lot of older people don't know about investing, and they end up having some shame about that. Interesting. And that's really too bad because it stops people from asking what they want. And there also is this level of difference of vocabulary about a regular person's vocabulary and what their investment advisor might be speaking to them. And so we're needing people to bridge that gap. When you didn't grow up in an investment firm like I did, then you don't know these things. It certainly wasn't taught in most high schools in California, we don't have any requirements to graduate from high school with any kind of personal finance courses being required. Many states are like that. That's changing a little bit, but not enough. So then you graduate from high school and maybe you seek other education, and yet it's not taught in college either. It's even in MBA personal finance isn't taught. So then you get to your job and you're making these decisions or asked to make these decisions about something you don't know about. And that's where some of the shame that people think, oh, everyone else knows but me. And that's not true. And the younger people know that, and they're not wedded to understanding the system. They don't necessarily like it. So they want to invest their way out of this, and that's where they're really going to be looking to have more impact.
Nathan Place (28:39):
Right. That's very interesting. So perhaps because they're less, I don't know, less enamored with that system, they feel less embarrassed to not totally understand how it works. They feel less
Kristin Hull (28:53):
Pressure and they have fewer years of not understanding it either. Where I think a lot of us have been in a career for a while and we still don't understand our 401k, and what did we miss along the line? The thing, you didn't miss anything. No one was teaching you about it the whole time.
Nathan Place (29:06):
Nobody explained it. Ever.
Kristin Hull (29:08):
Part of the patriarchy has us internalizing that somehow it's us and it's not the system. And when the younger people don't believe in the system anyway, they know it's the system. Whereas if older people feel like we are the ones that made the mistake that didn't learn, that don't know enough, and we feel less empowered,
Nathan Place (29:28):
It's our fault not the systems. That's right. And also just to bring it full circle for a second, I mean, do you think also ESG itself has kind of changed the way young people think about investing and about the economy, that it may have had an impact on the way they think about their own investments?
Kristin Hull (29:45):
I would say they were already thinking about this. Oh, okay. They were thinking about this and those terms may or may not fit, and oftentimes do fit with some of the things that they want. They also want to see in general, as far as trends, reduced inequalities, they see that both as a moral imperative, but they also see the risks to our society as having those. And so investing and growing wealth can become personal for them, but they want to do it in a way that works for everybody. So there's a lot of that that's coming in that wasn't as much in previous generations.
Nathan Place (30:19):
Right, right. Yeah. And that seems like a significant difference. Would you like to take a stab at what do you think ESG will be called next? Do you have any guesses as to
Kristin Hull (30:30):
What internally be? Honestly, if we do this right, it's going to be called smart investing.
Nathan Place (30:34):
Ooh, that's interesting. Okay. Why would you go with that?
Kristin Hull (30:37):
Because just for some of the things that we've talked about earlier, really acknowledging and being able to look out for many more things that might be material to a company. So instead of saying, well, we're going to look at these traditional measurements that are found on my Bloomberg screen and ignore that our world is changing, our society is changing, that the climate has changed, and that any of those could possibly affect my company or that the companies in my portfolio could also affect those things, that's actually material. And so we see that smart investors are taking those into consideration.
Nathan Place (31:16):
Right, right. Yeah. One of the experts I spoke to for the story I wrote about this said, it's not really idealism, it's enhanced due diligence. That's right. That's right. Could you maybe unpack that a little bit for us? What makes it a matter
Kristin Hull (31:33):
Of diligence? So why this is so controversial right now is because our economy largely is on autopilot with all of these index in a mutual fund or an ETF, and then many of those, and no one really knows what that is, and you get this, set it and forget it type of thing. It literally is set. And that works for a lot of people. And yet we now have this opportunity to say, well, what about these other areas of due diligence? And most of our index funds are based on location domicile. So the us, the s and p 500 is based on US companies. So that decision's already made. And then size right? It's largely our largest 500 companies. So those are the two due diligence that goes into that index fund size and location. So we're not even looking at what the governance is, we're not looking at products and services.
(32:27):
We're not looking, so the things that were Warren Buffet, old school smart investing, have kind of disappeared. And we're asking to go back to, oh, products and services really matter. The sector of the economy that you want to play where your factories are located is going to matter in climate change. And then now within the states that have different civil rights policies or lack thereof, how employees are treated, human capital management really is going to matter as we move forward. I mean, even just who's negotiating work from home or not work from home, and who is it better to work in the office? Does adding a commute, how does that work for someone that is caring for aging parents or for younger children, or when we really do need to be more mindful of our workforce? And so the ES and the G call us into some of these things that we've been able to ignore with the indexing.
Nathan Place (33:24):
So you're optimistic when it comes to ESG, where it goes from
Kristin Hull (33:27):
Here? I'm optimistic. Absolutely. It's going to be a turbulent ride. Seat belts firmly in place. We are going to see some extremes. We're seeing already states coming out with different policies, be it Texas, Florida, Wyoming, et cetera, and we're going to see more backlash. It's not a movement though. This is a small amount of voices that are, they're loud and there's a lot of dollars behind them, but it's not a movement. It's not like everyday people are saying no to ESG.
Nathan Place (34:01):
Right. I remember at one point you called it a media campaign, not a movement. That's right. Yeah. Could you explain the difference there a little bit? Sure.
Kristin Hull (34:08):
So this is a small amount of people with a large media budget that are getting these placed. And then we have some governors, of course, in our government, but it's not everyday people that are saying, no, we don't want this for our retirement account. So the numbers aren't there, and yet it is very loud.
Nathan Place (34:28):
Right. Yeah. It definitely seems to get a lot of attention in the media, but if these people who are against ESG do have these deep pockets and they are dead set against it largely for reasons to do with being very invested in oil and gas and these energy sources of our incumbent economy, what gives you confidence that they will relent eventually? What is going to eventually stop them? It seems like they're well financed and they're very motivated.
Kristin Hull (35:00):
Right. I don't think that they're necessarily going to relent. Oh, okay. Oh, no, I don't think so. I just think that they're calling attention to this. There's so many other people that really want this added due diligence and smarter investing, and I think that the numbers for financial returns are going to show. So I think that that's what's going to win over time.
Nathan Place (35:18):
Right, right. Yeah. Alright. Is there anything else that we haven't talked about yet? I mean, you've covered a lot of ground. Is there anything that you'd like to add that we haven't talked about up to this point?
Kristin Hull (35:28):
Well, I think for advisors, this is such an opportunity because really to connect with our end client and to hear what's important to them and then be able to have investment portfolios that match what our clients want, it's such a lovely opportunity to bring them in to share things that you haven't really talked about. An s and p 500 doesn't give you that level of connection, size, and domicile is not really that appealing to anybody, whereas something that's working on women's healthcare, maybe language learning or an educational piece.
Nathan Place (36:05):
It's been a great conversation, and thank you to our viewers for tuning in. This has been a lot of fun. Thank you so much.
Kristin Hull (36:10):
Thank you, Nathan. Really wonderful conversation with you. Yeah,
Nathan Place (36:13):
My pleasure.
