 We're still working with getting those branches staffed. We'll be happy to see when you come visit us and at that I would like to introduce our presenter, Paul Herman, the founder and CEO of PIP, which stands for Human Impact and Profit Investor Incorporated. This is based in San Francisco. Herman is also an author of two books accessible in the library, The Hip Investor, Make Bigger Profits by Building a Better World, that was published by Wiley in 2010, and the Global Handbook of Impact Investing, also published by Wiley in 2021. Please welcome Paul Herman. Thanks Leah, and hello everybody. Delighted to be with you today. Another summer day in San Francisco. Leah remembered that in my first book that came out in 2010 presented that at the portrayal branch where Leah was working. So delighted that she and Doreen can host us today. I'm excited to tell you more about how you might be able to do more good with your portfolio and your 401k. If you have any questions, please put them in the chat or the question box. Ask them along the way. You know this is a webinar so we can make this interactive along the way just like as close as we can be to being in person. And what's already in the chat are names of the books that I've written. The presentation will be available afterwards so know that you will get this via PDF so you can review it. And let's get started. And again please ask questions along the way. So we like kicking off the conversation about sustainable and responsible investing with this image. Now, I'd be curious for each of you if you have a reaction to this image is this inspiring or depressing. We considered using it for the cover of our latest book but a lot of people actually said oh please don't use that that makes me want it, you know depressed and I don't want to read your book. We put it in presentations to show that more utopian world can happen on the right of the screen, and kind of left is more of a dystopian world as a new just said. And so we have the choice of which way we want to go and, and this is also how we look at the world when we're investing, and when we're managing portfolios for investors, and when we help rate portfolios for investors including 401ks. Just before we get started so the lawyers and the regulators are happy. I'm Paul Herman. I'm a registered representative and investment advisor. Registered in the state of California, Illinois and Washington State we have clients across the country we have clients in other states, depending on how many we have we registered there or not. And we also have a ratings company kind of like a morning star for impact. So that you can understand is a company, a bond immunity bond, a fund, or other type of investment is that more net positive or more net negative. Remember this is all for your education and information so this is not these are not investment recommendations you should do your own research or ask your own advisor. And that all investing has in that the stock market and other assets can go up or down in price, including things like cryptocurrency. So these are the two books that we introduced the hip investor on the left is a great way to get started if you're interested in learning about sustainable responsible investing. Well it was written 11 years ago, and did become a bestseller and is in libraries around the world more than 146 global libraries, including the San Francisco public library. It's been translated into Polish my heritage. And more recently, we've widely has published the global handbook of impact investing that you see on the right. And that's available in ebook which is good because it's 1300 pages so it's bigger than war and peace. And it covers a variety of these topics. What's the value of human capital, you know we hear CEOs say people are most important NASA, but they're not always on the financial statements. We hear about fossil fuel free investing and the value of nature how can we put a price on what we use in nature, including how bees pollinate honey or the soil regenerates. So this is much more dense than the first book so feel free to check them out either at the library or collect for your own personal reading. And then over the summer I wrote for Barron's financial magazine, five books that are insightful about how to do sustainable investing Bill Gates about how to avoid a climate disaster. If you're not yet familiar with what's going on that's a good one. Jeanine Furpo she's a local author wrote activate your money with a group of collaborators so that gives more detail about what we're talking about today, making money moral by the finance team so that's my alma mater the war or in school business. Alex Edmonds used to teach at Wharton now teaches at London Business School grow the pie. And then some of you may be familiar with donut economics because there's actually a working group for California on donut economics and how to have more stakeholder engagement and stakeholder capitalism. So, you can probably find these in the library so check them out. And again, so you can have the presentation after. Alright, so without trying to be too depressing or too dystopian, we are facing five crises of our time. And these five crises, we actually built our framework around 15 years ago when I started hip investor. Based on Maslow's hierarchy in the hierarchy of needs. So we have health, physical and mental health, including COVID. These days, wealth, especially income inequality, earth, certainly the climate crisis is one of the top earth crises, equality, racial equality as we became even more elevated last year, and there is a crisis of trust of people, many people don't trust institutions anymore. So these five elements with our pillars we call them when we evaluate an investment these are five crises but not to worry there's things we can do about it. There's new metrics for how to measure what's going well or not so well in the world. There's ways to innovate in your investing approach. And there's a looking across multi sector. So we're going to have three many discussions in each of these feel free to put your questions in the chat box, and we'll answer them along the way, and we'll get very tangible about what you can do. So to kick this off is a little quantitative, but for those of you who know accounting statements. Not everything is on the financial statements of a company. In fact, back in 1975. Most of it was there was a lot of manufacturing plants and inventory things that we usually think of with a traditional business, but business today is much more people oriented service oriented, or some of those manufacturing jobs have moved overseas. So looking at a company, one of the 500 largest companies in the US the S&P 500 85 84% of that value is not on the financial statements, people are represented as costs, not as assets. The use of natural resources is off those financial statements. And so to invest more responsibly, you can see right here for in the dark green for themes that you can apply to investing in your portfolio. One is looking at people as an asset as many CEOs claim but don't always pursue and measurements of that can include things like customer satisfaction, driven by employee satisfaction and employee retention. And an increasing number of companies report these measures so one of the questions before the webinar was how do I pick which company one way to do that is to look at what they're disclosing about how they treat employees, how they pay employees. We work with a nonprofit called as you so as you so.org on rating overpaid CEOs for each year of the past seven years. A second theme is the natural resource efficiency how do companies use oil and water and energy. And again an increasing number of companies are disclosing how they're using these natural resources and there's even a theme called valuing nature that there's an increasing number of books and research papers. And even back at the turn of the millennium, a group of European and global scientists said if we paid nature for all that we use from nature. It would be for every dollar of GDP, it would be two additional dollars. And so if we actually paid nature and soil and the bees for what they did, almost no business would be profitable. So using those resources efficiently is one way to have a successful business and potentially a successful investment. And that is making sure that the board of directors and the team is representative of the people that they serve as the board reflect half men and half women. Does the board reflect the diversity of people that are served, including nonprofits that work with nature and people. And then finally transparency. If you can't see inside the company how do you evaluate risks. So, so in innovative metrics, one of the things that we encourage everybody to do to be a sustainable investor is look up the information either from the company itself, which they report on their website, or in reports called sustainability reports corporate social responsibility reports or impact reports. And this is there's databases that can provide this information, and one of those that does so around greenhouse gas emissions is fossil free funds at fossil free funds. And that tells you how much greenhouse gas emissions are inside a mutual fund. And we'll cover that again later in our discussion. So just to put a finer point on it. You say what's the state of today. The state is that 92% of the 500 largest companies in the US have diversity policies. That's good. 92% out of it, but only 19% have actual metrics of tracking gender diversity racial diversity and similar. So we need to close this gap we need to close the gap between actual metrics where we can track performance versus a promise through a policy. Increasing number of companies are instituting a fair wage of $15 an hour or higher target is one of the first to have done this Bank of America is committed to $20 an hour. You may disagree with these companies operate in other ways, but there is increasing competition for labor and for good jobs and setting that fair wage that $15 an hour is only $30,000 a year if you work a full year, or $20 an hour is $40,000 a year. So this might be a tougher wage to live with in a city versus accounting. And the average CEO pay has continued to spiral out of control, and there's a lot of reporting to the government on this and unfortunately CEOs continue to get overpaid, while everyday workers don't get paid. There's resources there's something called science based targets the science based targets initiative is put on by the carbon disclosure project, World Resources Institute and others, and it's tracking the more than 1000 companies around the world who say science is important, and more than 800 companies actually have a target like Levi Strauss says we're going to reduce greenhouse gas emissions 95% by 2025. There's a lot of work to do to get there. Stanley black and decker you might have their tools in your garage. They've committed to 100% greenhouse gas emission reduction by 2030. And so that means every year from now till 2030 they'll have to reduce it eight to 10% every year year after year. And last year under COVID greenhouse gas emissions worldwide went down five to 10%, but have already come back with the recovery. And this is a new innovations we have to focus on and so companies like Tesla with electric vehicles or beyond me with meatless food proteins. Those are companies that are trying to bring these new solutions to market, and hence while they may be a focus for sustainable responsible investors. So I'm going to show you a chart in gender diversity will show you a chart in just one second the shows we still have a ways to go to be at equality or parity. And then one of our favorite metrics is actually lawsuits. So if you read the end of report, or the what's in the sec calls the 10k report. So you have to report who's suing them, who they expect to sue them, and for how much. And what we found over 15 years of analyzing companies for being sustainable, responsible, or impactful is that the more you get sued as a company, the more you are as an investment. One, it takes away time for managers to focus on it to sometimes you have to settle or lose a court case, you have brand risk, the stock price may fall. So companies that don't get sued, generally are in balance with customers, employees, environment and government, and companies you do get sued are pushing it, and sometimes over the line or up to the line but it's out of balance. So let me show you, let's talk about climate for a second, because this is a. This is something that there's a information and an education gap. The Paris commitments that you may have seen talked about in the news, they're encouraging countries around the world all countries around the world and the institutions inside them to only raise the global temperature to only conduct activities that raise a global temperature up to one and a half or two degrees Celsius. Now you might think that it's like, oh, well, we live in San Francisco, it's 60 degrees today. It could be 62 or 64 that's not too bad, but this is a global temperatures is an average around the whole world, and that we live in a balance just like our bodies live in a balance. Our temperature is 98 degrees inside our body like you see on the right hand side. So another one and a half or two degrees Celsius when you convert the Fahrenheit and add that to your body temperature. If our body temperature is like the Earth's body temperature, and you have a few have a temperature of 101 or 102, you have a fever, you don't feel that great, you might want to stay in bed. You might be contagious to and current behavior in the whole investable world is there's estimates that if we just continue investing the way we do today. The Earth's temperature could grow for five six degrees Celsius, which is another seven or 10 degrees Fahrenheit, which means your body temperature would go to 105 to 109. There's many people who survive a temperature of 109 and 105 people there's, you know, that you, you have something dramatically wrong with your body. This is what we have to avoid. So this is the per one of the purposes of sustainable responsible investing is finding the companies, muni bonds, mutual funds that are investing in more efficient companies companies with aggressive targets, muni bonds that have the use of investments like city of San Francisco does for green purposes to be more efficient with energy to put in sensors to put in bioswales to help drain water from flooding. All right, so let's just pause here for questions we've covered a lot I see there's some questions in the question box which a little bit. Both of them actually about inflation Leah do you want to describe them at all. So, the first one is how likely do you think it is that the United States will enter a period of high inflation, like during the 1970s, within the next 10 years. Yeah, so this is a hot topic. For those of you who are tracking interest rates, you can look it up at the Federal Reserve, which has a website called Fred fredi. And interest rates in the 1970s used to be 10%, or higher. Some of you may have had mortgages that were 101214% if you had a house mortgage in the 1970s. And since then interest rates have come down globally, for the most part, including in the US. And, and the reason they've come down as a couple of reasons one, we've understood how to eliminate more risks, though now the next wave of risks is coming so that is a risk that interest rates could go up. And interest rates are approximating zero now. So it's hard to have interest rates lower than zero, though it's happening in Europe. So if you're in Germany, and you put your money in a bank. They have negative interest, and so you won't get all of your money back you'll get a small deduction back for negative interest rates. So in addition, another risk is things like other currencies so cryptocurrency is emerging some younger people and people of all ages are investing in cryptocurrencies thinking wow maybe I should have an independent currency of a country. So to let that survive there the fiat currencies may not easily permit independent cryptocurrencies from continuing without some regulation. So there's definitely a possibility of higher interest rates, but what are elements against that are. Global workforce and we're all on a zoom webinar right now and so several of us, you know, many of us can work remotely. And that means that the supply of labor is global, not just local or national. So that's another pressure if you look at the labor rates around the world. It's going from like a curve to a flat. And that's been happening for the past several years and our view is that it will continue to happen. But a different theme that you may want to think about independent of interest rates is self sufficiency. So back in 2018 2019, we had wildfires in Napa Sonoma, rest of California. And that's where we came up with a theme called self sufficiency and radically decentralized self sufficiency. And so this is like, if you need health care, can you get health care locally if you need energy do you have a generator. Can you grow food can you grow food in your backyard like what are you dependent on outside of your house, your community, your state, your country from around the world. And we even saw that when the Suez Canal got blocked earlier that impacted global trade for at least a week and rippling through. So, there's lots of risks to evaluate, and how we, when we're constructing ratings on investment or a portfolio, or managing portfolios for investors, we think about all these risks, and we pursue the ones that are more likely to be the sustainable responsible world and are investing in solutions related to that. So I'll pause right there. So hopefully that was a appropriate, you know, thought process for talking about inflation and other future risks. And this is the thing about any portfolio future risk is is your criteria and so I think that relates to this next question from Christina, just a little bit long but Leah do you want to share what that is. I think that when you, she's, it's to personalize I think you, she gave an email to answer her directly. Okay, the other question was, what type of investments do well during periods of high inflation. Okay. Yeah Christina I'll follow up with you on your more detailed question. Yeah, so during if inflation returns. What you want are companies that sometimes have what's called real assets. So, those could be real estate and real estate in a real estate like a house or property. Investment trust rates. They're known as. So those are some materials, if the inflation is being driven by higher oil or metals prices. That could be helpful but commodities have not traditional commodities have not done that great in the past decade so we'll see if that changes in the coming decade commodities that could do good in the coming decade are in clean water and clean water, sustainable forestry, there's companies in sustainable forestry there's companies and mutual funds in clean water. There's also rare earths like lithium, which goes into batteries that go into rechargeable renewable batteries. So, sort of going sector by sector you can see that and some of the inflation right now, like if you go to Costco today or to the grocery market, you know my toothpaste used to be eight ounces now at 6.8 ounces. It's the same price but they're giving you less so there's some invisible inflation that's happening there, but with a global market for labor with hyper competition prices, unless you have a monopoly price pressure generally is lower. The good news is, there's some inflation potential from employees starting to get paid a fair wage, and that may ripple through so things to be concerned about our high labor cost business, labor intensive businesses may have some more inflationary pressures on them. Okay, so the other is another question about diversity, diversity metrics. How can a person find the 8% of companies that do not have diversity policies, or the 19% of companies with diversity metrics. Great question. More and more tools are starting to emerge to pick these up but there's no easy way to do this so the hard way to do it is look it up one by one yourself that's obviously time intensive. So if we put that chart together so we actually have the list so that's something we do publishing around is to call out companies on that list of who doesn't have a policy and why. Frequently it's the newer companies to the S&P 500. So the growing ones that are starting to become big most big companies have those policies, but the ones in metrics are actually interesting. We just did this recently for the Dow Jones 30 industrials. So only the ones that have metrics are only about half of names that we all know. So good ones are salesforce.com and Apple and travelers insurance and visa, and they're now publishing what is a required government document called the EO one, the equal employment opportunity one form and most companies over 50 or 100 people have to report this but traditionally it's been traditionally it's been confidential. But there's enough after last year's after George Floyd last year and racial protests. The heat has turned up on businesses to have these metrics report these metrics and but there's companies like IBM and Procter and Gamble which are diverse internally but they're not reporting their metrics it's really funny. So yeah happy to follow up with you on the specific companies that we found in our research. All right so please ask more questions along the way. This is being recorded the PDF will be available afterwards. I don't know this yet one of the things that you study like where we're all these environmental impacts coming from. There's something called scope one scope to and scope three scope one is what happens inside the company scope to is the energy you buy like from PG&E which is one of the highest renewable portions of utility energy in the country, as opposed to like Kentucky or West Virginia or Caribbean coal, and then scope three this is where a lot of uncertainty is. This is what product what impact your products have. So Procter and Gamble invented cold water tie, because part of their analysis was, do you need to use hot water when you clean and hot water helps clean clothes. So that's how they came up with cold water tide is, could we save customers money on energy by having a cold water type product instead of warm or hot water type. So this is yogurt. So yogurt, you know comes from dairy, which comes from cows cows. A lot of cows in the US eats grain, but cows aren't built to eat great cows are built to eat grass. And so when cows eat grain, it's a little bit disagreeable. And so they burnt and create methane, or they fart actually. And so this. Like Stonyfield Farm said, all right, we're only going with grass fret cows, because that's how cows were built over 1000s and millions of years. So these are the types of things, you know, and McDonald's is doing a deep dive into its supply chain to figure out how to a one, you know, put, have more sustainable meat that it serves, or like Burger King has, you know, made a big bet into beyond burgers and serving beyond burgers. So that's just a, you know, some additional vocabulary that you might see a few do this. So climate is one of the big threats, you know, we talked about inflation but this is a big future risk going forward as climate. This is a 3000 county map of the US you can see all the counties in California and other states. And you can see that red is more at risk and less resilient. This is from Florida, Texas, the south, also the coast, where there's water risk. It also comes from the policy. So the policy of some states is not yet acknowledging climate so you need to factor that into how you think about the world so Alright, so here's the chart over time in terms of like diversity, you can see the policy gradually going up over time and the metrics gradually going up over time but there's still this huge gap. And we think that's a difference between action and aspiration. And then women on boards. And still women on boards are in this 35 to 40% range. Women are half the population, they're more than half of the university graduates, they're more than half of grad school graduates. And so we think that more women will make their way onto boards, especially as there's more stakeholder capitalism having nonprofits and government leaders, just like Lisa Jackson used to run the EPA and is on the board of Apple. So the policy is. It's sorry I misquoted the women on boards is up to 26% women in the workforce is up to 39%. And you can see the managers in between. So, there's still a lot of work to do every year as the S&P 500 changes over the new companies may not yet have a woman that usually is now getting fixed within weeks. All S&P 500 companies today have at least one woman on the board, but almost none have more than 50%, just a handful like L'Oreal. Okay, so what can we do about what are ways to get practical about it. So the good news is, and this has been accelerated by COVID. During the last decade since 2010, sustainable responsible investing has become more prevalent. And it's been put on hyper growth in the last year with COVID, as people have said, oh, there's a lot of crises we need to solve for. One of the things we do is we look at 10,000 companies around the world. And what we're looking at is for these metrics that we talked about, women on the board, greenhouse gas emissions, employee pay, our companies tilting more towards the positive or more towards the negative. And what we find is over time is a company like Pepsi versus Coke. You know, you may not like either of these because they sell sugar water and processed foods. What's interesting is that they're diversifying into more sustainable foods. It's still not the majority of what they do. But some investors like, okay, they're making progress where they see the vision and they're working their way there. For some investors, that's okay. There's other investors that say, I want nothing to do with Pepsi. But let's just take the Coke and Pepsi challenge. Some of you might remember this from growing up. There's a TV of which tastes better. And one of the interesting things is Coca Cola is 100% beverage company. And Pepsi is a half food, half beverage company. And one of the interesting things about water usage, if you look at the last line, is even though Coca Cola is only twice as much beverage as Pepsi, it uses four times more water. Now that's amazing. And, you know, it's not just the water that goes in the, it's the water in processing, farming the ingredients and the like. If you drink a unit of soda, in general, you're drinking two to three units of water consumption. It's not going into your body, but that's what was used to produce it. And you can see that Pepsi is, you know, as some other advantages over Coke. And so if you said, am I going to pick Pepsi or Coke from a sustainability perspective, maybe you pick Pepsi if you're okay with that whole category. So things are growing fast. And what you can see on this chart on the right is the higher rated sustainability companies, the companies who are doing better, or doing good, but at least doing better, tend to rate higher and tend to have higher returns over a period of several years. And ones that rate lower actually are riskier and more volatile and don't always deliver the return. So it's not all companies over all time periods. It's a mix in a portfolio. This is a mix of all 10,000 companies that we track around the world. And so what you start to, you know, if you have a financial advisor, if you have a family member that you're investing with, they're like, Oh, isn't that all tree hugging. It's not tree hugging. I mean it is tree hugging, but it's also can be profitable tree hugging. So that's the key here because we have some more questions that you want to answer and then we'll get into tools you can use. Lea, do you want to call out any questions there? Sure. JC asked how do you evaluate an ETF or mutual fund that claims to be ESG focused. Great. Yeah, so great question. And I'll just preview what we're going to cover in a few minutes. If you go to fossilfreefunds.org. There are several different filters that they use for deforestation and for gender equality and the like, so you can type in a mutual fund name or ticker. There's also included in our PDF here, a website called Clean Portfolios that does something similar to show you what the overall sustainability rating can be. There is some data now like on Yahoo Finance, you can see a sustainability score from a company called Sustainalytics, which is on by Morningstar. And so they have a view on it. So there's a couple different ways you could go about it. We also have a portal at Hip Investor that you could sign into and see some of the sustainability metrics and scores. I see another question called SRI and ESG. SRI historically is called Socially Responsible Investing. It's more recently called Sustainable Responsible Investing. Some people call it Sustainable Responsible Impact Investing. It's the process of applying these criteria about people, planet and trust to your portfolio. ESG stands for Environmental Social Governance. Again, people, planet and profit. They're directionally the same. Some applications are more intense, some are more loose. Some people saying they're doing either of these things can get accused of greenwashing or impact washing. So those are the high level definitions. This is why we like to get quantitative of what are actual metrics of like actual employee pay, actual CEO pay, actual board diversity, actual greenhouse gas emissions, actual product impacts. And that helps to sort of tune up the level of understanding accountability. Leah, other questions? Yeah, how do you reconcile the presence of some vanity metrics versus the real impact often negative of companies? How do the different metrics offset or balance each other? Is there some net score? Yeah, so great question. And yes, this is a challenge because there is a net score and high environmentally beneficial companies like Tesla don't disclose a lot, especially about their employees base. And so Tesla could rate high or low depending on how you weight those factors. One of the things I think a new thanks for these intelligent questions is asking about is you can see on this graph on the right. Why are there no bars for 80 to 90 and 90 to 100? There are no companies performing at that level, at least in the public markets globally. And so what we see is the majority of companies are below 50. They're in this net negative tending towards dystopian tending towards our body temperature of 105 degrees or higher. And to be a public company today is to be an extractive enterprise. So step one is to say, well, do I want to be invested in those companies that are contributing to the problem and maybe you're going to face higher future risks? Or do I at least want to take the best available solutions? And it may not even be in all industries, you could exclude things like oil and gas from your portfolio. And that's what the right hand side of this chart is about. The right hand side of the chart is companies that are that are leading or doing better or innovating, reducing their future risk, solving a problem that exists in the world, and bringing together people who will help solve it. So that's, we could have a day's long discussion about this one, but I'll just pause there. Yeah, other questions. Yes. What is the EEO one counterpart for environmental impact? There is no required government disclosure equivalent to EEO one is an awesome question from JC. The closest are OSHA requirements about some emissions and EPA requirements about some emissions, usually related to manufacturing or mining. I've had direct debates with SEC commissioners on this about, hey, let's bring the greenhouse gas emissions methodology that's been in place for 20 or more years, where thousands of companies have reported on this voluntarily. Let's mandate that for US company disclosure. And at least with some of the more conservative SEC commissioners I've spoken with, they're like, oh, it's different by each industry. And that's not our job. So that will probably change during the current administration versus previous administrations. But this is where each of us on this call should contact our representatives who fund the SEC and pressure, especially the financial services committee to bring this type of disclosure and transparency to it. You can also do it directly with companies. You can write investor relations. You can tweet at the company. You can do social media. So all of us need to apply pressure with verbally and in writing in what we buy, buying products from companies who are leading versus lagging and continue to put this pressure on. But this is great. Yeah, I'd love to see more of this required disclosure versus voluntary disclosure. But it's happening today as, as more investors are thinking about this type of and allocating. You're seeing companies say, oh, what do we need to do to keep those investment dollars or purchases. Yes. How could one go about converting their conventional portfolio to a more sustainable one. What are the steps. And doesn't it cost more for a company to have sustainable practices. And doesn't this make them less profitable, or is this a misconception. Right. Great question. Common question, and very thoughtful. I'm going to start with the last question first. And that last question is, does it cost more. It might. But does it return more. It does often. And that's what you can see on this chart is the companies who might spend more, or invest more in sustainable solutions for people, planet and trust. In general, are more profitable and less risky. And that's what we've done the 15 years that I've been doing this at hip when I started the company 15 years ago their versions of this chart every year. They were higher rated sustainability companies might pay more for employees, but those employees are more productive. They might take more care of the environment, but they're not drilling empty wells of water. They might spend more to not break the law versus taking the low cost approach, but they're not getting sued. So the cost question here is, maybe it's more costly, but you need to say what is the return on investment of investing in people of treating nature as a resource to preserve and thrive, and of preserving trust building and preserving trust. So the return on investment is the key metric not only cost but return on investment, because when we only focus on costs, that's how we get minimum wage at $7 an hour in some states, and that's that is not a sustainable way of living, let alone investing. All right, so let's say what can we do so one thing you can do is look across your whole portfolio. Some of these may apply to you some not. You might just call if you have a public portfolio you're probably in equities, you might be in some real estate or real estate investment trust, you might even be in some bonds or many bonds, and then even cash. So one easy way to get started is where's my cash, you know, is it at Citibank, or is it at a community bank and community banks do a lot of community investing. There's an investment called CDF eyes community development financial institutions there's also credit unions. Now you don't need to put all your money in one place, but you could put some of it there. And then there's a investment called CNOT my CNOT MY CNOTE, and they invest in a mix of community banks, and they make loans, those banks make loans to women and people of color who are entrepreneurs. That's about two percent, and maybe more. So you can make more money than cash at a bank by investing in the community for muni bonds if you hold any of those, especially some of you might hold those both for, you know, ballast or safety in your portfolio, and to generate income, an increasing number of muni bonds are being issued as green bonds, or blue bonds related to water green related to energy and environment. So that is a way to get started and there's some mutual funds and ETFs that are called sustainable muni bond funds. So that's another type. Then there's equities either direct companies, we mentioned some companies before like Tesla, Beyond Meets, there's a new one out this year called vital farms, though that hasn't been well since its IPO, which has, you know, free range chickens and eggs. So there's companies and then there's funds. So let's get to some tools for funds. And again we'll share this document with you. So here's Kristen Magnuson, she's an architect. She works at a company here in San Francisco called Stoke ST okay. Not only has young people and middle-aged people and older people who are making buildings greener for their clients, they have a 401k. That's more sustainable. And so we mentioned as you so before, which works on helping investors become more sustainable. And inside the company, they've adopted this so it's not just you yourself, it's a group of people inside your company that can help make your 401k more sustainable and we do this for Stoke and we do this for others. And this even got covered in Fast Company magazine five years ago back in 2016 about how to make your 401k more fossil free or sustainable. And most people want this. This is not, this is a no-brainer for most people. They do believe that sustainability matters. They'd like their portfolios to represent this, represent making the world better. So three tools that you can look at are cleanportfolios.com, fossilfreefunds.org, and the hip investor portal that we have as well. And in cleanportfolios.com, one of the things you can see is like, what do other companies offer in their 401k? And so one of the companies that we've loaded in to this clean portfolio site is the Google 401k plan. Only one of the 24 funds in this Google 401k is socially responsible. And on average, most of the other funds have exposure to that. So you can pick like when you want to retire and what's important to you like environment or equality. And then what you can see is to compare and contrast different funds, and you can see that some funds are more sustainable and some funds are less sustainable. Some funds have more fossil content. Some have less. You can even see the socially conscious one other resources, the US Sustainable Investment Foundation, US SIF. This TIA CREF fund is one that has expressly purpose of being sustainable. So it takes a little bit of research. There's some online tools that can help you. And this is a tool where you could then make a new portfolio and say, well, what happens if I put some of this in? So if I allocate in this way, how does my overall sustainability score change? So that's one tool. A second tool, which is now like a series of tools is fossil free funds. And when you go to fossil free funds, they have gender equality funds, deforestation, tree funds and the like. So this is by our nonprofit partner, as you so. When you click into a particular fund, Parnassus is a local company in San Francisco on Market Street. This is their endeavor fund, which invests in companies that are good places to work. And there's no fossil. There's no oil, gas, coal or fossil utilities. In others, like you saw in the Google plan, there might be 5%, 8%, 10% in fossil. And if you think that that's either contributing to a world you don't want to live in or risky for your portfolio. Those are choices you can make to then pick new funds. Morningstar has analyzed sustainability and what they've found. I need to update this chart, but the data is similar is more sustainable funds are outperforming currently. And whether those be equity funds or munibond funds or allocation funds, which is a mix of stock and bond funds. And so in general, not all, but in general, sustainable funds are investing in companies and munibonds and corporate bonds that are less future risk and more upside potential from solving these problems. So let's just pause there for more questions. We still have another 10 minutes or so nine minutes or so for questions and and my contact upload my contact information to in case you want to write any questions to me, but I'm happy to answer these on the call together and keep going. So, what's next. As an investor yourself in impact investing do you feel frustrated at the pace of change of priorities, both companies, institutional investors and retail investors, especially given the potential dire consequences. Are there interventions for more direct action. So I'll put this to do list back up here. Am I frustrated. Yes. Am I optimistic. Yes, so I'm a short term warrior long time optimist. And the good news is more and more people are getting mobilized by these five crises of COVID and income inequality and climate crisis and racial inequity and lack of trust and institutions like these are dramatic problems. But there are young, middle aged and old people who are solving these problems and they're doing that in business social and government institutions as well as in military and academic sectors and the like. So bringing this cross sector approach one of the things that is really exciting is I'll just go backwards here is like the city of San Francisco and other cities have a need for climate action. Now, most of these cities are not funded for the climate action, like we're just trying to like serve all the citizens as it is. So some of the solutions are going to have to come from not only the muni bonds of San Francisco, but partnerships with corporations. So in Sunnyvale, Apple has made partnerships with the surrounding towns and cities for the water supply as it continues to grow, or Google has partnerships for transportation of CalTrain. And so these cross sector partnerships, you know, looking for companies who are solving sustainable development goals. Another reason for optimism is, this is a framework the SDGs you're going to start to see more of this in the market markets, you're going to see companies who are already committing to SDGs sustainable development goals or 17 of them these are all the things that could be better in the world, like no poverty of gender equality, good health and well being and clean water. And you're seeing funds mutual funds and ETFs start to adopt these SDGs. Those solutions are going to come from companies, they're going to come from governments, and they're going to come from nonprofits, and we're going to see cross sector solutions happen so ways to get involved are one vote with, vote with your time and your money. So where you shop matters, every company looks at its revenue every day, if not every week. So make a different purchasing decision support a product that is more sustainable, where you work. So work at a place that you feel good about, especially since you probably work hard, work at a place that's helping make a difference in these types of solutions. So while we're all here today to discuss your portfolio, start to shift your portfolio or shift all of it up to you. But with either 1%, 10%, 50% or 100% shift to a more sustainable portfolio and do that with other people friends family, or do it at work with your 401k. So how you vote, it still matters how you vote, and people who believe in science are needed, and we need to like more scientists and doctors and biologists, but we also need to, you know, like people who can compromise and find solutions in our difficult world that we live in today. So that's the mix of things that we can do. And then, if you don't like how a certain in company or investee is behaving, call them up, write a letter. I don't think anybody still has fax machines. Social media is a good way to do it because then other people can pile on and you can share it. And write on medium.com or linkedin.com. There are many more tools each of us have. And then from time to time the sec will have new rules that they're proposing the 401k rules are going to be updated soon again through the Department of Labor. Write, create a public comment through that public comment process influence your local legislatures to put in place policies. So there's so there's like a long list of things all of us can do where we shop, where we work, how we invest, how we engage with those investments, how we vote, how we influence policy, how we bring other people along. And so one of the good things about social media is we can find others who want to do that as well. And that helps us take care, collective action together. So that's the question, Paul, does a total shareholder return mean dividends plus stock appreciation, or does it have something else. Yeah, total shareholder return is what dividends you get paid, which are zero to 5% from a S&P 500 company averaging one to 2% usually for some funds, plus the stock appreciation or depreciation together. And so that's the total shareholder return that's what you get, whether you collect the dividends and cash or reinvesting in the stock. JC asked mentioning banks, are there brokerage firms that are banked for ESG. For instance, Vanguard seems to be quite popular in most retirement accounts that they only offer one ESG product to consumers. Yeah. So let's see. So banks, there are community banks and credit unions. There's also sustainable banks. There's a sustainable bank called Aspiration. So in big banks, or in big investment firms, they're mostly moving in this way, because investors want it both individual investors like most of us here, and institutional investors, endowments, foundations, pensions. This is, remember, I mentioned that hyper growth earlier. This is happening now. It's, you know, more is happening. Some of it is a little bit greenwashing, some of it's a little impact washing. For Vanguard, again, call them up, ask for it. You may need to ask to be escalated once or twice, because the people on the frontline may not know the answer. There's, from the Vanguard branded, there's the FTSE social good index that they've offered for quite a while. That's not always the best fund. It's a fund, but it's always the best one. If you have a Vanguard account, you could pick non Vanguard ones like Parnassus or Trillium or Etho ETF or Change Finance or Green Alpha next to the economy. So there are other non big brand. There are other funds that aren't necessarily the brand of the institution that can do the work. I do see a question here about the potentially higher expense ratio. It's the same thing about the cost of labor. If you want to pick the cost of labor that's lowest, you won't necessarily get the best outcome. It's the same thing on a fund. You might pick the lowest cost. But remember that low cost index could be leading to a global body temperature. That will kill you. And so what you're paying for with some of the fees is the ability to do this research, find these companies, engage with these companies. And remember, when we've done this analysis, the net return you see in a mutual fund or ETF is the net return. They've already deducted the fees. You see a sustainable fund outperforming a traditional fund or an index. They've already deducted the fees. And many of those, you know, there's a catalog of those that do better, even with some higher fees. So don't be careful of limiting yourself just to the fees. It's true that fees are fixed or known and returns are unknown. You also get what you pay for. And so in some cases, if you pick something lower cost, you may not get the best value. It's okay to pay higher fees sometimes if you're getting the value for it. If you're getting higher, if paying higher fees and not getting the value for it, that's a bad decision. But this is, you know, funds also change over time, you know, change the holdings. So remember this is all for your education and information. These are not specific recommendations, but they are examples so that you can get to know them better. And, and this is what we do, you know, and have done every day for the past 15 years at in how we rate investments, manage portfolios and advise people. Leah, anything else as we get close to wrapping up? You're on mute. So, so as we mentioned before, we're happy to, we're happy to answer your questions. We'll have the PDF shareable. This webinar is recorded and, and then feel free to be in touch and be in contact. But just take action. It's up to us, you know, it's up to our where we shop, where we work, where we invest, including our 401k and how we vote. So, so glad everybody could share this time together. Appreciate all the thanks in the chat box and excited for each of you to take action in your portfolio. Thank you, Paul. Thank you for the presentation. Thank you so much, Paul. And, again, we'll send the recording and the slides, and we will probably send the chat transcript as well. And we'll see you all at the next program. Thanks so much.