Despite the market downturn in 2022, interest in sustainable investments continued to increase across the United Sates. At Natural Investments, the inflow of new clients starting their sustainable, responsible, impact (SRI) investing journey helped grow the firm to $1.18 billion assets under management. [1]
The stewardship approach with client assets also reimagines the purpose of investing for the betterment of the economy, environment, and society.
We strive to create impact in three ways:
- SOCIAL ISSUES $478M
Avoiding investments involved with wealth and resource-depleting activities. - ENVIRONMENTAL ISSUES $377M
Working with managers that incorporate environmental, social, and governance (ESG) factors into investment decision-making. - IN THE COMMUNITY $563M
Funding social enterprises that contribute to solutions and support our communities.
The largest portion of responsibly managed assets lies in the publicly traded market. Approximately $695 million was in responsibly managed mutual funds, ETFs, and separately managed accounts that incorporate various environmental, social, and
governance (ESG) strategies.
Screening on ESG issues helps to identify and avoid the worst corporate actors, but Natural Investments chooses fund managers who engage in shareholder advocacy as well.
Approximately $384 million of assets managed factored in shareholder engagement via corporate dialogue or filing ESG resolutions at annual meetings to improve corporate policies and practices.
In 2022, in order to avoid investing in the industries that cause the most harm to people and planet, our managers commonly screened out fossil fuels, tobacco, military/defense, and private prisons.
$375M
FOSSIL FUEL FREE
This includes coal, oil and gas, fossil-fired utilities, the Carbon Underground
200, and the Macroclimate 30.
$132M
PRIVATE PRISON INDUSTRIAL COMPLEX FREE
This includes enterprises involved in financing, labor, facility management, and more.
$206M
MILITARY WEAPON FREE This includes cluster munition, landmine and nuclear weapons manufacturers, and military contractors.
$365M
TOBACCO FREE
This includes enterprises involved in the production of tobacco.
Community Investments
Natural Investments has always believed community development finance to be an important aspect of socially responsible investing. However, the pandemic and stark racial inequities in the U.S. spurred our advisors to have conversations with clients about the high impact that community investments have in addressing poverty,
infrastructure needs, and overall societal well-being.
Between 2020 and 2022, Natural Investments more than doubled investments into local communities and small businesses, adding up to approximately $563 million by the end of the year.
In the public markets, this means investing in municipal bonds and mortgage-backed securities, where capital flows directly into community infrastructure. In the private markets, this means investing in social enterprises, community development financial institutions (CDFIs), and fund managers contributing to solutions in the community.
Regenerative Investments
We refer to private market investments as “regenerative” because they channel financial resources into endeavors that mimic natural systems and minimize toxic social and environmental outputs. It’s a stewardship approach to help ensure that future generations will share in the bounty to which we all have rights, such as clean air and water, healthy foods, affordable housing, and safe and secure jobs.
In the last year, Natural Investments has directed $301 million into 80 private entities supporting the public good for people and planet in a regenerative economy, a 60% increase from the previous year (see page 25 for a list of private investments). Among these companies, we invested in six cooperatives, 12 nonprofits, and 15 Certified
B Corporations.
These opportunities focus on sustainable food and forestry, renewable energy and energy efficiency, green building, and more. Through investments that decentralize and democratize the economic system, we are creating greater community resiliency. Here are some examples:
Affordable Housing
Natural Investments invested in 13 organizations that are involved with affordable housing. Collectively, these organizations helped finance 65,432 housing units. In addition, 389,571 housing units were provided to low-income individuals.
Supporting BIPOC-Owned Businesses
Natural Investments invested in 23 organizations that support Black, Indigenous, and people of color (BIPOC) owned businesses. Collectively, these organizations invested over $615 million into 9,318 BIPOC-owned or led businesses.
Mitigating Climate Change
Natural Investments invested in 13 organizations that collectively avoided or captured 60,544,177 MT of CO2, equivalent to avoiding 13 million passenger vehicles from driving for one year.
[1] Natural Investments had $1.6 billion in assets under management at the end of 2022. Non-impact assets excluded from the count are those held in cash or clients’ legacy positions held for tax purposes.
