Page 25 - ARUBA TODAY

BUSINESS Thursday 8 June 2017
A25

Big firms join race for investors looking to make an impact

By STAN CHOE IDEO is the same firm that vestors want to be sure to and partnered with an on- another web site, the bro-
AP Business Writer designed Apple’s original steer their dollars toward line broker, and its first pro- ker’s, to actually invest their
NEW YORK (AP) — If you computer mouse, and it companies that they see totype came out in 2015. money.
haven’t heard of impact helped Swell develop ev- as helping. It allowed investors to “And there was a gap be-
investing yet, just wait. erything from its web site to The fast growth is not uni- choose from four portfolios, tween the promise of in-
It’s one of the hottest areas its philosophy on hiring. versally welcomed. Inves- each filled with stocks of vesting in companies that
in investing, and the indus- The stakes are high. tors who have long been in companies whose founda- make the world a better
try is racing to offer more Sustainable, responsible the space are encouraged tions are big contributors to place and the compa-
opportunities for people to and impact investing ac- to see big-name firms enter, causes, such as “Improve nies in the portfolio,” said
put their money into invest- counted for $8.7 trillion last but 71 percent of them also Education.” Macy’s stock Bryan Walker, a partner at
ments that deliver a posi- IDEO. Instead of investing in
tive impact on the world, companies whose founda-
along with positive returns. tions donated to causes,
Think: projects and stocks customers wanted to put
of companies that are pro- their money into compa-
viding clean water or look- nies that were directly do-
ing to prevent disease. ing things themselves. So,
This formerly niche corner more a Mohawk Industries,
of investing has become which recycles plastic bot-
increasingly mainstream, tles to make carpet, than a
partly because it offers a Macy’s.
tantalizing opportunity to Swell now offers six portfo-
target millennial custom- lios to invest in, each filled
ers. Big-name players are with stocks of companies
getting involved, such as looking to make changes
Morgan Stanley, which in a certain field. Mohawk
has created an Institute for is in the “Zero Waste” port-
Sustainable Investing and folio, along with LKQ Corp.,
recently raised more than which recycles auto parts.
$125 million for a global The “Green Tech” portfolio
impact fund. The promi- includes electric-car maker
nent venture-capital firm Tesla Motors and Xylem, a
Andreessen Horowitz is water technology compa-
backing OpenInvest, which This image provided by IDEO shows three weeks of design prototypes to explore how consumers ny.
matches people with so- think about social impact investing. Early in their work together to develop Swell’s platform for IDEO and Swell also put to-
investing in a way that makes a social impact, IDEO & Swell ran through several prototypes to test
cially responsible invest- what customers said was most important to them. gether prototypes to test
ments. All the new entrants (Courtesy of IDEO via AP) what customers wanted.
are bringing more credibil- They asked whether cus-
ity to the field, but they’ve tomers were willing to give
also coincided with some year, or $1 of every $5 un- say it introduces the risk of was in the “End Cancer” up some returns in ex-
growing pains. der professional manage- “mission drift or impact di- portfolio because it do- change for greater social
Swell, a company backed ment, according to US SIF, lution,” according to the nates to cancer research, impact (they were not)
by the insurance giant Pa- a trade group. That’s up 33 latest survey by the Global for example. and whether they pre-
cific Life, is one of the latest percent in two years, and it Impact Investing Network. But not enough customers ferred something with big-
entrants and offers a case far outpaces the 5 percent At Swell, the company’s were actually signing up. ger risks and bigger poten-
study of how keen the in- growth for U.S.-registered own approach has shifted So Fanger, who was in busi- tial rewards or something
dustry is to tap into impact investment companies as it heard more from cus- ness school at the time and that was more stable (they
investing’s growth. Swell overall. tomers about what they had been learning about wanted to go big).
launched last month, but With the recent U.S. pullout want. IDEO and its theory of de- Through its prototypes, Swell
it’s already gone through a from the Paris climate ac- It started in 2012 when sign thinking, got in touch and IDEO also gauged
couple iterations. cord, one school of thought Dave Fanger, a financial with the firm through a con- what customers were will-
After its first prototype didn’t says impact investing could actuary working in mergers tact at Pacific Life. ing to pay in fees. They set
attract enough customers, get even more popular. If and acquisitions at Pacific After IDEO came in, they the minimum investment at
Swell partnered with, of all Washington is leaving more Life, wanted to help peo- quickly zeroed in on a cou- $500, with an annual fee
things, a design company environmental issues to the ple invest with their values ple issues. One was that of 0.75 percent, or 75 basis
to help in its construction. market to decide, some in- in mind. He launched Swell Swell’s site pushed users to points. q