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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Katherine Cowdery. The stock market is edging higher as
Speaker 1: resource producers rally, along with the prices for medals including gold.
Speaker 1: Treasuries are declining as the smallest jobs gain in seven
Speaker 1: months is raising doubts about the economy strength. The Labor
Speaker 1: Department report showed employers added one hundred sixty thousand workers
Speaker 1: in April, missing the two hundred thousand jobs that economists estimated.
Speaker 1: The jobs rate was projected to ease. Instead, it held
Speaker 1: steady at five percent, while wage growth accelerated. We check
Speaker 1: the markets every fifteen minutes throughout the trading day on
Speaker 1: Bloomberg Radio. Down Industrial Average is up fifty three points
Speaker 1: three tens of a percent, trading at seventeen thousand, seven
Speaker 1: hundred fourteen. SMP five thundered up three points an eighth
Speaker 1: of a percent at two thousand fifty three. Then as
Speaker 1: Jack is up eight points an eighth of a percent
Speaker 1: at forty seven twenty five. Plus Texas Cinemedia crude oil
Speaker 1: ups of barrel to about gold is up eighteen dollars
Speaker 1: thirty cents an ounce at six and the ten year
Speaker 1: Treasury is down eight thirty seconds with the yield of
Speaker 1: one point seven seven And that's a Bloomberg business flash.
Speaker 1: This is taking stock with Gadleen Hayes and Pim Fox
Speaker 1: on Bloomberg Radio. Impact investing, investing that does more than
Speaker 1: just look at the bottom line of dollars and cents.
Speaker 1: It looks also at the bottom line when it comes
Speaker 1: to the Earth and the Earth's resources. Sustainable investing. Well,
Speaker 1: here to tell us more is Debrah Winchell, Managing director,
Speaker 1: Global head of Impact Investing for black Rock. They have
Speaker 1: over two hundred and twenty five billion dollars of assets
Speaker 1: under management and they've got a new Impact e t F. Debra,
Speaker 1: thank you very much for coming into the studio. Appreciate
Speaker 1: it having me what tell us about what is how
Speaker 1: do you define impact investing and then maybe you can
Speaker 1: use that as a lead into the new e t
Speaker 1: F and how that expresses what you're trying to accomplish.
Speaker 1: Sure impact investing or sustainable investing, there are lots of
Speaker 1: names is looking for investment opportunities that have more than
Speaker 1: just a financial return. They also generate an environmental or
Speaker 1: a social outcome at the same time. Now, this generation
Speaker 1: of both the financial outcome and let's just call it
Speaker 1: well being in general, how do you define that well being?
Speaker 1: Part of it the goodwill that the company will generate
Speaker 1: by providing these kinds of sustainable investments well as specifically
Speaker 1: as possible. And I think that's really the goal of
Speaker 1: the investments that you see out there, and that we
Speaker 1: offer very specific definition around a climate outcome, perhaps companies
Speaker 1: that have lower carbon outcomes or more carbon efficient or
Speaker 1: other outcomes along social or environmental dimensions. It could be
Speaker 1: around diversity, or how employees are treated, or the products
Speaker 1: that they create, health products perhaps that address certain issues
Speaker 1: that are particularly complicated or that are you know, very
Speaker 1: serious in the world. Tell us about some research that
Speaker 1: you've done at black Rock that indicates that the potential investor,
Speaker 1: who is now let's say a millennial, is very interested
Speaker 1: and that this is an important factor when they're considering
Speaker 1: an investment. Right. Well, it's interesting, there are a lot
Speaker 1: of demographic changes that we're seeing that are really driving
Speaker 1: this interest in impact investing or sustainable investing. First of all,
Speaker 1: certainly with millennials. I think you see it in the
Speaker 1: companies where we work as well as what we see
Speaker 1: with investors. There's an increasing interest by millennials to make
Speaker 1: sure that their investments have both a financial return and
Speaker 1: a social or environmental return, in the same way we
Speaker 1: see with women who are increasingly inheriting or generating more
Speaker 1: of the financial assets, and that trend is continuing significantly
Speaker 1: over the next twenty years. Women also are looking for
Speaker 1: their dollars to accomplish more than just generate a return.
Speaker 1: So those are two very significant demographics that are driving
Speaker 1: this interest and sustainable investing. And I would say that
Speaker 1: you see it both on the investing front and you
Speaker 1: see it on the consumer front. You see it really
Speaker 1: the way that I think millennials and women look at
Speaker 1: the world today. Your own personal background has both of
Speaker 1: those components as well, because previously you were at JP Morgan,
Speaker 1: but also you were the head of the Robin Hood Foundation,
Speaker 1: and you were also the chief financial officer and high
Speaker 1: level executive at the Metropolitan Museum of Art. How did
Speaker 1: those two career paths come together with this impact and
Speaker 1: sustainable investing. Well, I think first, growing up in finance
Speaker 1: allowed me to take a very rigorous approach to thinking
Speaker 1: about problem solving or creating products, both at the met
Speaker 1: and where I was the CFO, but in a very
Speaker 1: mission driven organization where we had to think about both
Speaker 1: um outcomes that were entirely related to the mission of
Speaker 1: the organization, but also the bottom line so it could
Speaker 1: be run in a very effective way. At Robin Hood,
Speaker 1: I had the opportunity to really learn about poverty fighting
Speaker 1: from just one of the best poverty fighting organizations I
Speaker 1: think in the in the world, and the what Robin
Speaker 1: Hood brought was a lens of metrics. How do you
Speaker 1: measure and compare one intervention to another? And I think
Speaker 1: putting metrics around something as difficult to measure as poverty
Speaker 1: fighting was very instrumental in what I could bring to
Speaker 1: Black Rock. Putting metrics around environmental or social outcomes or
Speaker 1: impacts give us an idea of the conversation that someone
Speaker 1: might have with the chief executive of a company that
Speaker 1: is debating the value of sustainable investing in whether that
Speaker 1: ought to be part of their corporate message or whether
Speaker 1: they perceived that to be just a kind of the
Speaker 1: flavor of the month. How did you have that conversation
Speaker 1: with the head of the company. Well, companies who are
Speaker 1: actually the ones who are being invested in UM, I think,
Speaker 1: are increasingly focused on what their impact is on the world.
Speaker 1: You see it with consumer companies as they look at
Speaker 1: their supply chains. You see it with lots of companies
Speaker 1: around environmental impact. We certainly saw with COP twenty one
Speaker 1: and the focus on climate that lots of companies are
Speaker 1: starting to think about both their products and their operations
Speaker 1: in terms of how they impact the world. And I
Speaker 1: think companies are becoming very sophisticated about appreciating how consumers, investors,
Speaker 1: many stakeholders are focused on responsible operations. Do you believe
Speaker 1: that the companies will be less reticent about supporting sustainable
Speaker 1: issues that not necessarily have anything directly to do with
Speaker 1: their company, but just because they are, let's say, a
Speaker 1: public face, will they be supporting more of these climate
Speaker 1: change and sustainable investing initiatives. I think companies globally are
Speaker 1: becoming more sensitive to and most and more supportive of
Speaker 1: initiatives of this type. I think a lot of companies
Speaker 1: are actually facing the an impact of environmental or climate impact.
Speaker 1: It actually affects their bottom line, So I think there's
Speaker 1: both the operating risks and opportunities the companies see. I
Speaker 1: think there's the consumer awareness and now increasingly there's the
Speaker 1: investor focus on these outcomes. I think looking at all
Speaker 1: these different factors all impacting companies is definitely elevating this
Speaker 1: as a focus for leadership across the globe. The exchange
Speaker 1: traded fund give us the details. Well, the most recent
Speaker 1: fund that we launched is an e t F and
Speaker 1: exchange traded fund that is tied to the sustained the
Speaker 1: u N Sustainable Development Goals. So it's an index that
Speaker 1: constructed around companies derive a large percent of their revenues
Speaker 1: from activities related to those goals. So it's one of
Speaker 1: the first times that there's been an investment opportunity where
Speaker 1: you can invest in companies that are specifically focused on
Speaker 1: those outcomes. Looking at the u N s TOW Sustainable
Speaker 1: Development Goals was a very clear way of selecting a
Speaker 1: set of criteria that already has a large sort of
Speaker 1: support and following well, just looking at some of the
Speaker 1: holdings of the Eye Shares Sustainable m s c I
Speaker 1: Global e t F, taking a look at the lead
Speaker 1: company value in France, looking at water and treatment facilities,
Speaker 1: Schneider Electric, big engineering firm A b B, as well
Speaker 1: as Pierson PLC. I think a pierconis and education company.
Speaker 1: How does that fit into this sustainability look. Education is
Speaker 1: a leading issue globally UM advancing education in terms of
Speaker 1: RYE in elevating UM the level of income around the globe.
Speaker 1: I think all of these companies derive revenues from something
Speaker 1: that's specifically related to improving the circumstances of the world
Speaker 1: or the population of the world. One of the most complicated,
Speaker 1: I would say elements of all of this is getting
Speaker 1: good data and measurement, and that's something that black Rock
Speaker 1: is extremely focused on. Can we create opportunities that have
Speaker 1: a specific outcome that we can measure that investors can
Speaker 1: say yes, that's something that would be very appealing to me.
Speaker 1: And I just want to correct myself. I was wrong.
Speaker 1: I was thinking of Suez, which is also in the
Speaker 1: e t F that is the uh forerunner of the
Speaker 1: water company. But value of making automobile parts. Does this mean,
Speaker 1: for example, that coal companies or those that are companies
Speaker 1: that are focused on fossil fuel, would they ever have
Speaker 1: an opportunity to become part of this sustainable investing. It's
Speaker 1: unlikely that a company that derives the majority of its
Speaker 1: income from fossil fuels would be a leading part of
Speaker 1: of an index like that. On the other hand, you
Speaker 1: sometimes see the companies that are most entrenched in some
Speaker 1: of the traditional forms of energy are also the ones
Speaker 1: that are leading some of the most innovative work around renewables.
Speaker 1: So one of the things that I think is a
Speaker 1: challenge is finding investments that are just pure plays. A
Speaker 1: lot of time, companies that are doing some of the
Speaker 1: most innovative and exciting work can also have some traditional
Speaker 1: businesses that you might not associate with those outcomes. And
Speaker 1: and just the last point to you this e t F.
Speaker 1: This is something that Black Rock is gonna put its own,
Speaker 1: uh sort of muscle behind to popularize. Yeah, we had
Speaker 1: a launch a couple of weeks ago on Earth Day.
Speaker 1: We partnered with the United Nations and had a launch
Speaker 1: and rang the bell and you know again, we're creating
Speaker 1: a platform of products across all asset classes. That is
Speaker 1: an effort to provide opportunities for lots of different investors
Speaker 1: across the globe to have the opportunity to make impact investments.
Speaker 1: Thanks very much for sharing your thoughts and educating us.
Speaker 1: Debra Winchell, Managing director, Global Head of Impact Investing for
Speaker 1: black Rock