 I'm Anthony Bugg Levine. I'm with the Lafayette Square Foundation and Lafayette Square, which is an impact investing firm. And this just so you all know, this conversation, it started in the commitment that SOCAP made to doing a track around impact measurement and management and then a few of us were asked to volunteer to help support the development of the track and we agreed that a missing piece of the conversation was this question of how do we engage government? And so this is partly a conversation around impact measurement and management as it relates to government and we'll hear from the panelists about why that's important but I'd say it's more, it's broader than that and I'll introduce panelists and sort of you guys will see why having a broader conversation is really important. I think part of it is we, Lafayette Square were really committed to the idea that the global impact investing network, see Kelly, when Kelly was there, it came up with sort of a state of the impact investing sector and some of us, I don't know about you guys, some of us have been coming out here at this conference for 15 years. A lot of great things are happening in huge amounts of momentum. The fact that I don't know most of you is huge, powerful, I'm also older than most people which is really exciting and invigorating but what the GIN said we need to do as impact investors is really the next decade would be defined by how we scale with integrity. There's a 200 page report interviewed hundreds of people and they really came up with this idea of, we've created something really powerful, capital has been put to work for positive purpose but how do you scale with integrity and I think part of the conversation that's missing when we answer that question is how do we work alongside government and part of the, even when I went back when this conference was being held over in Fort Mason I remember 10 years ago sort of talking about the fact that a lot of people come to impact investing because they wanted to do something positive in our society but they have an antagonistic or skeptical view of government. Like I want to make a difference but I don't want to work with government. I want the private sector to be a solution that doesn't require government and the best impact investors I know are the ones who say actually we should be working alongside government. So the purpose of this conversation is talk about how we can do that effectively and we have an amazing group of people on the panel, I'm not gonna read their whole bios but we got John Samuels who was within a federal administration in the White House and now runs a private equity firm, very successful firm that's focused on looking at this question of how do you use capital in ways that both can produce institutional level returns which is accorded scaling but also be really have integrity around impact. Buffy Wicks has joined us at the last minute, thank you so much and is within government. She is part of the state legislature here in California and very well placed to answer the question so if investors are trying to work with government how do we need to show up? I think a lot of what this conversation is about for the next hour is building bridges from both sides and I think right a lot of us come in with there's a lot of mutual disdain and disrespect from investors who say government is cumbersome and from government who says investors are just out to make money but we have an opportunity to do something different and then Lorraine Wilson is with Novata building an essential piece of data infrastructure that can really underpin the ways in which we measure impact which ultimately is gonna be required if we are gonna show up with government and say hey we are different than the other investors who are here just to make money well how are we gonna be able to prove that and how can we be a counterparty to government in a way that supports them. So last I'll say by means of setup is I do think this is a particularly important moment to have this conversation especially in the US. I know not all of you are from the US. Love to hear more about how this is playing out in your countries but we are in a moment and Buffy I'd love for you to sort of tell me if you think I'm being crazy and John as well based on your experience in government where for 40 years there's been a sort of ideological block against investors working productively with government and from the left you've had government officials who say well investors are just out to make money we can't work with them because anything we do to support them is gonna result in regulatory capture or them just making more money and the other hand from the right you've had people who said well the answer to how we engage investors is deregulate everything and that a deregulated market is going to produce the best outcomes and at least at the federal level in the United States both those sides are starting to collapse and I think from the left you have people saying we can't produce, you cannot achieve the policy goals of this administration around climate change, around US manufacturing if you don't harness private sector capital and on the other hand from the right you've got people saying hey it turns out deregulating didn't result in jobs staying in the communities that our constituents live in or us achieving the kind of nationally vibrant supply chains we need to compete in a global economy so I think there's a unique moment where there's an opening to have this conversation but we as impact investors have to show up in a more effective way in government and government has to be in a more receptive so that's what this conversation is about that's the setup I hope that makes sense I hope that's what you guys think you were signing up for but may I start with you Buffy I mean is the premise that there is a moment when investors can engage government productively real in your experience what do we need to do differently to make it happen yeah so first of all thank you for having me welcome to California I represent the East Bay where it's at Oakland Berkeley Richmond area which is about 10 degrees warmer than San Francisco and more affordable although not much but I'm happy to be here I think it really depends on the issue you know in the California legislature Democrats control every statewide office and two thirds of the assembly and the Senate and so we have a pretty strong like hold here in California but I'll say so I'm the housing chair I do a lot of housing work and I think of housing is like it is a public-private partnership I mean we work closely with all stakeholders in that space to solve the problem we have a major housing crisis here it's been decades in the making and it's gonna take everyone like rowing our or is it the same direction to solve the problem private and public sector folks and even with our democratic controlled legislature on housing it's pretty non-partisan it doesn't break down party lines which is actually why I really like being the housing chair because it's more I think dynamic than some of the other issues that kind of divide us as a nation and I did a big bill last year AB 2011 for the housing nerds in the audience that was taking on some pretty entrenched interests taking on a lot of nimbyism trying to streamline make it easier to build housing here in California and I was working with the Carpenter's Union who partnered with the non-profit affordable housing developers to come up with a set of labor regulations that they felt worked that streamlined the housing that we need to do including bypassing a lot of regulatory hurdles to do that regulatory hurdles that you know we're put in with good intention but have resulted in the fact that we can't build the 3.5 million homes we need to build here and it was with a partnership that included unions and developers with bringing in another whole subset of SCI of the service employees union the school employees union whose workers are impacted but also the apartment association which is the landlords and the realtors and many other groups and so it was this really interesting kind of combination of unlikely allies of disparate interests who all came together to try to solve this problem working very collaboratively we actually also had Facebook put money in to provide research for the bill because when you're in these state legislative bodies California were more lucky I have about 13 staff I represent about a half million people so it's almost like a congressional seat but in some of these states if you do any state work it's like they have one staff member and they meet 90 days out of the year I meet eight months out of the year I have a lot of full time staff but even with my staff the research that is required to actually put forth thoughtful policy is really important and we don't have the capacity to do that often within our staff and so having the private sector help to fund that research was really critical bringing together all these different interests and that bill I had six Republicans help me get that off the floor of the assembly so it actually required bipartisanship which I know is like such a strange word these days in politics but I think that's one example of the way that the private sector can work and I represent probably one of the most progressive districts in the country, Berkeley's in my district and the fact that I was working with developers which is like a bad word in a lot of places to the left but the truth of the matter is all the interests aligned and we had to align all those interests so I think that's a really important aspect of this is making sure these interests align also as investors come to the table I think it's really important that again the data and the research and the facts are there but it's not just coming with problems it's coming with solutions how am I working towards solution what are the ideas, I say this all the time I'm just the idiot politician looking for the smart people to help me figure out how we do this right and so I'm looking for the smart ideas the creative ideas where you can align those interests and you can create a coalition of really the unlikely because I have to get 40 votes I need to get 40 people to agree with me on the assembly floor, we have 80 members I'm one, I need 40 more people and that involves speaking I have to sort of power map each of those people and understand who speaks to them is it the realtors that speak to them is it the apartment association is it their local mayor like who moves those people to support something like this and so what is that coalition of the willing that's going to come in and help do this and the last thing I'll say is on that bill we put in metrics and tracking so we can see how much housing is being built from that in terms of permits that are being issued completion of projects, et cetera so that we know we're actually having the impact from the housing policy that we just did which was a very broad and grand coalition and I think on that last point and again the impact best in the room need to be at the table to help you know the metrics you're going to use to get the policy passed and to make sure you're on track I would hope that investors are showing up and helping to write those I think that the challenge we face is often we run away from regulations rather than toward it just to follow up and then I'll go to John on this what in your experience do you say people were helpful in showing up and subsidizing policy creation and research did investors show up in a useful way around the metrics conversation or was it more of a typical hey this is hard to do don't regulate us don't make them a reporting burden it needs to be on the housing front we've gone through a process of streamlining over the last couple of years and that has been government driven because we have over-regulated in the housing space and so I think that's a little bit of a different example I'll say on the flip side I also do tech regulation and I do a lot of work specifically around you know social media companies and others impacts on kids and so that's a little bit more I think what you're getting at where there's like more of a confrontational relationship and I've done quite a few bills in this space handful have been signed into law one called age-appropriate design another one where we were tackling child sexual abuse materials that was passed and signed into law this year holding social media companies liable I think that's more of a classic example and what we've done in situations like that is put in risk assessments that have to go in that the companies have to do and we talk with in this example Facebook, Twitter, the companies about how do you actually it's important for me as a lawmaker I can say all these things but I don't run a social media company I don't actually know how it works right and so I actually I prefer talking to them so I understand I need to create a bill that it can be implemented that is possible to actually follow through I'm not trying to get rid of social media companies that's not the goal I'm trying to keep them safer for kids and so for me that requires an open dialogue and so while I have somewhat of a critical relationship with social media companies I have a productive relationship with them because as I think about the legislation how we're gonna do it it involves a lot of detailed conversations and that requires honest negotiating and coming to the table in a way where I believe that you are actually trying to present here a way to so we can both achieve the same goal which is keep our kids safer online and we disagree on some of this stuff and we're gonna fight it out and we're not always gonna agree but fundamentally like there's a functional relationship there even if it's not always in sync and it's someone adversarial Yeah, that makes sense so John can you just picking up on that you've been on the side of government you were in the White House you now work in a private equity firm where have you seen success in driving that productive relationship that about be described between investors and government seeking to create national purpose and what has the role of the measurement been because I think when we show up as impact investors we wanna we often show up assuming everyone knows our good intentions but of course if we can't prove how we are differentiated from other investors we're gonna be treated that way which is totally fair but have you seen that dynamic play out on both sides and what is the role of measurement and managing impact in that conversation Yeah, those are great questions thanks and thanks for having me it's great to be on the panel with everybody I will just say at Vistria we are very focused on driving impact through everything we do and you referenced the GINs paper and all the great leadership work of the GIN which we agreed with which is why we went out and stole Kelly McCarthy who's here in the audience and so she helps guide a lot of this work as well in terms of the development of the metrics that are most important to us and how we manage against those and the work that we do but if I can go back in time to the government work I spent a bunch of time on the hill and in President Obama's White House in partnership with Buffy for a good portion of that time Representative Wicks, sorry So I think a couple of things I mean a couple of terms come to mind intent doesn't equal impact so it's great to have the great intent but you've got to back it up with research and with data and with transparency and an acknowledgement of the stakeholders with whom you're engaging and I've seen folks do it the right way and the wrong way I think there are too often the kind of playbook of investors or the private sector broadly was kind of go in win at any cost whenever there was a given bill that they didn't like or a bill they wanted to advance and I think that the risk that they ran and often times how it played out was they would win a battle and lose a war right you'd go yeah you might get the amendment killed or you might get the bill killed or the bill passed but then you make an enemy of some of these folks who otherwise could be your partners for the next couple of decades in policy making if you were willing to do it in a more collaborative way sometimes that's not possible as you said in Washington bipartisanship and pragmatism are not really rewarded these days and that's a really difficult thing it's part of why I ended up deciding to leave I felt like at a time of shrinking public budgets we had the sequester you know it was pretty volatile there but there was still this ongoing huge public need and strong public objectives often times that aligned with the private sector more so than people realized and I just felt like I wanted to be a part of managing private capital in a responsible way to help drive good towards long-term policy objectives and so I think the folks who show up the right way first and foremost listen they do their homework they show up with an understanding of and probe more into the policy objectives of the leadership you know the folks who are able to drive process from the policy side and that they actually try to get to yes if you cannot show up in meetings with government as just someone or an organization that tries to extract value repeatedly you have to demonstrate that you're a solutions partner or a solutions provider and that you're willing to hold yourself accountable and to do the hard things so that's kind of a high-level take on that question can you give us a specific example of maybe you work from Vistory or something you've seen where investors showed up in the right way and were willing to be accountable in a way that's related to the measuring of impact and not just the statement of intent yeah that's a great question so I do think we do a lot of work in healthcare and we do a lot of work in education and there are really strong views on all sides on those issues I mean there are folks who very far on the left don't think there should be any profit in anything at all particularly in these sectors and then there are folks who think it should just be a free market but I think we've been able to go in and have very productive dialogue not in convincing government to do something but to help them understand what we are trying to do and to talk with them in advance like hey we're gonna go do this deal we're not asking for you to bless it or to promise us you won't do anything that's gonna make it difficult but as we do the deal we're gonna underwrite a series of efforts they're gonna help us execute against the vision that's gonna drive not just returns but a broader social impact for a range of stakeholders we think these are the most important stakeholders we think you care most about these several outcomes if we had to focus in on some we think these are the metrics that are most important to understand if we're moving the dial do you agree and if you can do that and preview that and do it in an honest way and then demonstrate that you're willing to come back in with transparency proactively and hold yourself accountable that really creates a lot of room for conversation with the policy makers so we've done that we've done that in higher education we've done some deals that have gotten a lot of attention in positive ways and negative ways but we've done all of it in close dialogue I mean one issue that comes to mind is the opioid crisis we starting in 2014 when I joined the firm that was at the time there was a lot of bipartisan kind of awakening to this horrible crisis that we have in the country that's ongoing there were bipartisan policies being advanced there was bipartisan agreement almost exclusively on this putting more funding behind an issue and we decided we want to do invest behind it because there's a huge misalignment between those who needed treatment and those who could access it and the number of providers who were providing kind of science-based treatment strategies but we went in and had a series of conversations and continued to this day with the policy makers about what we're seeing on the ground and what works because just as investors sometimes show up and disregard the need for responsible policy and regulation I've been guilty of this on the policy making side there are often times policies that are advanced with good intent but no real knowledge of how that intent will play out on the ground and so I really I do think it goes both ways that's really powerful so Lorraine turning to you because you're building a scalable solution to standardizing how impact on the private markets is collected and measured and managed can you talk a little bit about what it is you guys do at Novot I think most people have heard about it but what is the platform what is the aspiration and ultimately what do you think is a relationship between regulations and impact measurement as you guys are doing it because in a way you are the private sector saying we can step up and solve this so I'm really interested to hear about how you think about working with government over time sure okay great can you hear me okay yeah we're in an interesting space where we are part of the market infrastructure and you know it's great to be in California because the state is doing a lot to engage private markets and I don't always get to talk about you know these positive steps towards disclosure and transparency I do that more in Europe and so I just want to make that distinction there this is an ESG safe space yes yes and so I'd say certainly we look to coordinate and share information we focus on engagement with different investors and information sharing with regulators and policymakers but we're also in an interesting space where you know we have the power to influence what's being collected and so Kelly you may as well be an honorary member on the panel but I want to talk about the Global Impact Investing Network an organization that we partnered with earlier this year that really seeks to promote an evidence-based approach and has a wonderful catalog of metrics that investors can leverage and so what we did was we took this organization we essentially digitized their work and partnered with them and so what we see is the voluntary disclosure which for the most part in the US outside of California mostly voluntary disclosure that you're seeing in the space so we see the voluntary standards but now we're also starting to see mandatory disclosure requirements so just to throw out a few acronyms at the audience thinking about the SEC's proposed climate rule California has their own version of that which SEC regulates large publicly traded companies but who do they partner with these large companies they work across their value chain with companies of different sizes so what we did was shared market feedback on the proposed rule so that's how we were able to engage different parties that are involved talk about how our clients mostly private equity, private credit venture impact investors how are they collecting this data and what is the impact of the rule and so sharing feedback really talking about different ways that we see these metrics get measured and some of our peers have even looked at the cost application set with the cost implication so what is the cost to an organization to actually collect this data and to get it in the format with the assurance requirements that the regulators are looking for so that's just an example I'll share of how we've worked and tend to share feedback and hopefully make the rule even stronger Can I chime in on just briefly I mean a big part of our investment thesis is that we want to demonstrate at the end of the day that we can deploy capital at scale and have a strong impact and that if we do that these businesses in which we invest are actually going to be worth more the only way to do that is to get at an aligned set of data that the institutional investors the institutional LPs have access to so they can understand the performance of different managers on an apples to apples basis and full disclosure we've invested a small amount in Novata at the outset so we've earmarked any upside for philanthropy but we did it because we so believe in this mission we need transparency we need investment grade data around impact and we need to align on a set of metrics that are the most critical so that the investors and the regulators have visibility into who's performing and who isn't One question for you, Buffy the skeptical people in the Merkley Hills who think that all investors are just out to exploit people and even maybe your progressive colleagues in the caucus what do they believe that there is a group here that are investors who are both trying to make money and with integrity trying to have impact and if they don't what would this group need to do in order to meet a burden of proof maybe it's not possible because people are driven by ideology rather than analysis but I worry that we don't do enough we again we assume we're sort of showing up with an intention is good enough what would it take to or a measurement integrity perspective to be able to change that narrative around investors it's a great question I think some of my colleagues and some of my more progressive constituents probably don't think it's possible and that just may be the case I think you do have folks who though are really solutions oriented and so if you're making investments that actually impact society in a beneficial way and there's proof and data around that that can demonstrate that and you have a track record of doing that and you have honesty and integrity from my perspective I'll work with anyone that wants to be part of the solutions like whoever that is and I think that takes also relationship building I mean does anyone here know who their local state rep is? Maybe you do, maybe you don't I don't know a lot of people probably don't you might know who your member of Congress is but at the state level there's a lot of stuff going on that is important especially like here in California we do a lot of regulation and as I mentioned I do a lot of stuff in the tech space and a lot of my constituents work in the tech industry so I have those conversations with them but I think it starts with relationship building like 101 relationship building and I mean the example that John gave I think is a very good one that is sort of you're putting yourself out there you're sort of putting the proof's gonna be in the pudding you're laying out a landmark I know like I got pitched on Ernst and Young did a big data analysis report around they had predictive modeling around who they think is gonna be most susceptible to homelessness in the UK and that is now a model that we can use here in California and figure out what are the social safety nets we can do to help address some of those issues what is the you know which is gonna come down essentially to rental assistance which both the tenants and the landlords like and those are two groups of people that normally don't like each other very much you know and again finding those like unlikely allies of how they can work together to actually serve each other's needs at the same time I mean that's the type of stuff that I'm looking for as a lawmaker so that we can be solutions oriented we can work with partners who we don't normally align with you know as I mentioned I represent probably one of those progressive districts in the country but I'm willing to work with Republican dare I say Republicans when I can on things that we have shared interest on because I think it's important because we're talking about solving problems Yeah, so Lorian on this point I mean one answer or maybe it's more of European or Asian answer would be well government should set the standards for what gets counted because ultimately it's not gonna be serious or a scale unless people are required to do it I think you guys exist as a business around the premise that the private sector can actually set solid standards and create benchmarks for the measurement of impact at a company level what do you see is ultimately like the symbiotic end state what's the ideal relationship with government is it stay away and let us do our thing is it hey we're gonna build this thing for you and take it over because then you can go to scale how do you guys think about the relationship with government from your work It's a great question we're actually seeing I've got a tab open on my browser where Australia apparently just adopted a voluntary disclosure standard and essentially codified it as regulation and we're actually seeing that so that came out today but we're actually seeing that happen globally and so there's a lot of opportunity for coordination and where I'd like to see things get is that we see more interoperability so big word that we use where essentially one way of measuring let's say your emissions, your water use, worker injuries I'm actually calling out some of the most popular metrics on our platform right now to just make it more real where there's one prevailing way to measure that and what we do after we get that buy in is we're able to produce the benchmarking in the analytics and isn't that helpful right and so we have the rights to share anonymized aggregated data with academics, regulators, policy makers and the reason we want to do that is because they don't have the best insights into what's happening at these privately held companies big distinction between the large publicly traded companies I was working with before where you're tripping over data there's data everywhere on any given topic so what I'd like to see is more interoperability where prevailing way to measure it can start as a voluntary standard we can meet with regulators we can get that buy in and share why we think this is the right way to measure and what the implications are for a large or small company to collect this one of the things we do at Novata is we think a lot about reporting frequency that was a big, big question keeping us up at night when we first launched is how often should you be refreshing this data and if you do collect it often who's using it and why and how and so we're thinking about all of it how to measure how often who were the users of the data and how do we get you to a place where everybody wants to get to which is how do I report once and send it everywhere to my investors, the regulators and other stakeholders? That's really helpful I was thinking about earlier some of you said was from the government perspective you want this to be about solutions to problems because I think a lot of impact investors are excited about the idea of it's an abstraction like making capitalism more effective it's harnessing investment for social purpose but that's not how the political system absorbs things is probably what I'm hearing you say so it's taking issue like homelessness so it's just taking the issue as an example like you said it's three million new homes are needed that right? 3.5 million homes needed in California a little less than a trillion dollars is that about right? If you can get your deregulation and lower the cost so imagine a world 10 years from now where trillion dollars of price under capital has been mobilized in a way that is actually productively focused on solving that problem that you've been addressing a question for all three panelists what would have happened that's not happening right now that would have created the conditions in which that capital is able to show up in a way that is effective and that investors who are solving that problem get rewarded for solving the problem that government gets the capital they need just how do you sort of put this all together and we could be doing that in any one of the issue of education as you mentioned John but what is not currently happening whether it's around standard impact measurements or the argument around how people work together so imagine and after I say imagine a world where it works I'll ask you to come back and tell me why it didn't work so 10 years from now we've been able to like address the homelessness problem in California through a really effective partnership between government and investors bringing a trillion dollars in what would have happened? I'll try not to get in the weeds because I could but I'll try to have some top lines here you know part of the challenge is we've gotten in our own way for building here we've created too much regulation in California we've made it too easy to say no to housing we developed red lining here in California single family zoning was from Berkeley 100 years ago which was created to exclude people of color from Berkeley that was the purpose of that so we've spent a lot of time trying to deregulate it's the wrong word the stream line I think is really what we're talking about here and so that's been really really important for us to continue to do that we've only really started at six or seven years ago in California and now we're at the point because the crisis has metastasized to what it is we have 174,000 homeless people on our streets in California the largest homelessness population here in the states and growing I mean I have teachers at OUSD who actually this was a fun fact 10% of UC Berkeley students are homeless one of the best institutions in the world so that's what we're dealing with here that the shaking of the heads is the exact appropriate response like that's crazy and so I think what we have to do here is there is ultimately a private sector solution to this right the challenges investors don't wanna invest in housing in California because we've made it so hard to actually build it so that they don't view that there's gonna be a solid ROI or even any ROI on the investment because there's gonna be this lawsuit that lawsuit neighborhood group X is gonna file a sequel lawsuit to stop the housing so what we've done as lawmakers now is try to figure out how do we guarantee that the housing can get built how do we have one set of standards that okay you're gonna apply for a permit do you wanna pull a permit to build X, Y, or Z development you go through the checklist of these 10 things once you do that you get the permit right now it's like a political process on a Tuesday night in a city council meeting where people are arguing foreign against housing there's people that want it there's people that say oh that shadow is gonna impact my zucchini garden not joking that actually gets used so how do we take away the variables so that there's more certainty that the housing will get built and so that's a lot of the work that we have done over the last six or seven years to do that so we need that private investment into the housing but also we need public investment too in the form of affordable housing the last thing I'll say is in California you have something called an inclusionary rate which basically says some cities say okay you developer can build but 15 or 20% have to be inclusionary meaning low income or 50% have to be inclusionary so if the number goes up to 50% that means the market rate 50% has to pay for the affordable so there's always a debate between how high that number can go up it's easy to say the highest number possible but that means the project's not getting built and so the data is really important on that question around what you as a policymaker what you set that number to be and in the big housing bill I did last year that data that Facebook funded for us even though I work with against them in other ways funded for us to understand that 15% was really as far as we could push it otherwise the projects don't pencil out and they're not gonna get built so that's an example of how that's important just to get in the weeds but really it's the streamlining that we have to do here on this issue so they do that John and you guys I know you're not doing this but that's just using real estate as an example but could be health or the other issues what would it take for you as a general partnership to get a hundred billion dollars of LPs to come along a strategy that says hey we're gonna put your money to work around this particular opportunity yeah as a quick aside you were talking about the homeless students and that's a travesty because if we lose them as students that's a hit to our economy and set aside all the other there was a guy in the White House who was an engineer in the building I'll just tell this quick aside he's from India his name was David we became good friends because he was often like servicing the building late at night which is when we were all still working and he told me that he spent a year homeless his first year in university in India because he had to choose between eating and housing and so he chose to eat and he slept on the street for a year before getting an opportunity to come to the US but because India didn't invest in him in housing or the university didn't they lost that talent to the US and here he was working in the White House so you know same thing here it's in our interest so we do need an integrated strategy when it comes to investing in these critical priorities like we can't have students we shouldn't have anybody living on the street we can't have students living on the street we could have our next you know you name it Nobel laureates living on the street today so there has to be that opportunity for partnership between government and the private sector to align on our objectives and all to be willing to put skin in the game against them I mean I sound like the party for which I did not work when I was in government but there does have to be a certain element of certainty regulatory uncertainty is the biggest reason why investors don't come into these highly regulated sectors they are afraid that they won't know how to navigate and their investors are afraid that they're putting money at risk and that they're gonna be exposed to headline risk we've been willing to kind of step into those waters a little further than others because we've been able to kind of tease out the difference I think between the perceived risk and the actual risk and maybe see some opportunities that others don't but you know that's something we've been willing to do if you wanna make impact that scale you gotta have more certainty for the broader market and then I think it has to be holistic if you're thinking about healthcare you're thinking about housing you need to kind of co-locate affordable housing within accessible reach to jobs, transportation, healthcare, childcare, you name it so those are a few of the things I have one other point which I'll come back to in a minute when I recall it but I do think this notion of certainty is really critical this was the point I was gonna make like CMS, the Centers for Medicare and Medicaid Services the biggest healthcare reimbursement entities in the country the biggest payers for healthcare in the country they do this, they put out policies they have access to the data they know the utilization rate of certain benefits so if you're gonna go in and get your spine adjusted at a chiropractor you're gonna get your vision checked or whatever it is they know how much utilization there is they know how many providers are flocking to the space they know what they are charging cause they're the ones paying them they know the margins and then they also know the outcomes so I do think we have to build this aligned data set to help inform good policy which will then yield more certainty in the regulatory environment and allow more capital to flow to these big priorities and I'll turn to questions if you have questions in the audience I don't know if someone's taking them if not we can raise hands but Lorraine your answer so what's Novata's role gonna play in a world in which 10 years from now there's trillions of dollars of private sector investment capital flowing into addressing these national priorities taking homelessness or any one of them what's your vision for how your work will help make that happen? Sure, I feel like we facilitate and I feel our goal is to facilitate a lot of these different conversations I mean we think about the end investor the limited partner it's hard for them without standardization to pick between different funds or pick between different projects understand what a manager's doing there's a quote that came out an investor said you used to just look at the financial track record of the manager even if it was an impact investing fund because you just couldn't compare in other ways the objectives of the fund and so we work with a lot of the different stakeholders in the ecosystem and so 10 years from now I think it'll be a much easier story for an end investor and by the way is they're really pushing a lot of this disclosure the pension funds, the institutional investors the employees at some of these private equity venture impact investing firms so easier to understand making apples to apples comparison in terms of what's happening with these different investment opportunities so at the due diligence phase or even when you get your annual your year-end materials easier for a GP and investor to understand where they stand versus peers or where any investment stands by using more standardized metrics where appropriate and for regulators to have that missing piece of the puzzle one thing we didn't talk about is the regulation that's focused on impact investors and ESG investors that's come out of Europe it actually impacts people who get their money from European investors and so clients and so there are a lot of people impacted and what I found particularly interesting is that funds that were previously holding themselves out there as impact investing funds actually downgraded their approach or their claims in their marketing materials just knowing that there's increased focus on disclosure so that no one's greenwashing and that's basically overstating your claims so I think we'll just be able to differentiate between different offerings more clearly and choice is nice and I think it'll really revolutionize the space and once we get to a point where there's more data out there and people really understand what's happening we're working on it now there's a lot of movement in the space but it'll be interesting to see so we do have one question in the audience before I get to that I just want to turn this around and say what if it's 10 years from now and we're still having the same conversation so investors are still on the margins not really engaging with government government still doesn't have the resources they need to mobilize why, what is your biggest worry? If that's where we are 10 years from now what do you think is the reason that would have happened? I'm sure there are lots of reasons but I'll get everyone one, only one minute what do you think is the most like so we're gonna do a pre-mortem like the ambition of this conversation it's on this lab and we're trying to understand why did this idea that we could work together and investors and government die what's the one thing that you think killed it? I mean in my example I think it's inertia and status quo won the day we didn't break through we didn't align the interests and align the stars where this could be a win-win-win but it requires leadership to do that and I think unlikely allies and people coming together to actually try to solve problems which in politics we don't have a great track record of doing that I hate to admit it but I think it would be the status quo and inertia won the day and I'd say my experience inertia is not just a political concern it's the problem of the asset management industry too too many people in power have been too successful doing things the same way to be open to change but John have you had a thought? I mean one thing I wanted to say is that it will probably mean we didn't get campaign finance reform finally done and get money out of politics because so much of it influences the process not here, not with this representative but I'm thinking more about DC but our politics is still really flawed and volatile and solutions are not rewarded and valued but the other thing is on the investor side it would mean that we failed to demonstrate with data that the work we're doing is having a positive impact on the lives that we touch through our investments and or that we were unwilling to share the data behind the work that we do Throw in another element and that's that we all have our own way of describing our impact and then we're only speaking to our small cohort so that to me would be a failure is that we literally don't have the vocabulary to speak to one another and describe our efforts in the space That's great, thanks everyone so if you have more questions I think the process is write them down and we'll get them so we didn't, I don't know if someone who ever wrote this might want to identify yourself you don't have to but we did a question how might funders build bridges with communities to drive community informed and led measures so the question of and maybe it's about skipping government or working with government but how do we not just talk about government as a partner, I think the question is how do we also make sure that the measure of impact is informed by the communities who we claim to be making a difference on behalf of I actually think that's a great question because if someone's coming in claiming to speak for someone else and all the great things they're doing for that constituency I'm like, I want to talk to the constituency and so I think that partnerships actually really important and that's where every time I get pitched a bill idea I want to know like who are all the stakeholders, where are they all at where's the politics on this going to align and how are we having truly authentic conversations about how this work or whatever this potential regulation would be how it actually impacts those folks which I think again comes back to relationship building and having that kind of dialogue and conversation I mean the other thing that's I'm sure you all do this sort of stuff but like white papers are very important put that data out there make it public make it so that we can see it have that kind of public conversation about it but do it in alignment with the communities with which you're purporting to help Kelly's working on a really important white paper right now we're going to be excited to put out but that's around the impact measurement management work I mean it's interesting there is a practice called community informed budgeting so some municipalities have this where a portion of the budget is carved out and the community gets to weigh in on how it's spent and it's nascent but that is coming to work but I agree one should not present as representing a community if you can't back that up or and again the intent doesn't equal the impact if you're saying you're going to do all these things it can be so wonderful for the community but you don't understand how to go and measure progress as you go then you know that's a real problem and then from our perspective it's in the case studies and the survey information so just hearing that first hand information on what happened as part of what was the outcome that's great anyone else have questions from the audience so when I don't get questions I do this I've not prepped the panel for this so apologies guys so here's how I like to sort of end this maybe a minute or two what is the question you wish you had been asked in the context of this topic of impact measurement working with government what is the question you think we should have asked you or someone out here should have asked you and either answer it yourself or if there's a question you think one of your fellow panelists should have been asked ask them and I'll give them your time if somebody asks a question now from the audience are we off the hook or are we just... come on guys he's stressing out now so I'll give you a second but just think about what on this topic are we not talking about that we should be and you're happy to take an answer or pose it to your fellow panelists I... do you want to go? go ahead he's not off the hook entirely but I don't think I need this but okay I need it for the video got it how do we as organizations that may have a very specific focus on whatever the issue is work with our elected officials what have you that are very siloed to have conversations to really break down these silos so I focus on housing but food insecurity is a real issue and it's very connected to housing and we have state representative that focuses on housing you're very awesome by the way but how do we break down these silos when we're talking to our elected officials to really address the issues as a whole versus in these very individualized silos because I think that continues to be a challenge as well when we try to look at our issues and we're just addressing one piece of the puzzle which has ripple effects on other pieces so how do we come together with our elected officials to address the whole puzzle not just a piece of it sure that's a great question one tool that I have found to be very helpful as a lawmaker is when a coalition of groups get together and put forth a blueprint so putting forth a blueprint around economic security where you're hitting on housing costs food insecurity pick a handful of things that you all feel as a coalition you can say here's our 10 year vision of how we're gonna actually create economic security for working families and it's these 10 groups that have come together to align around a series of policy bills and then it gives lawmakers because here's the reality like I go into session in January 80 of my colleagues and I we're all gonna put forth our like 15 bills we all want our little press release and our little Twitter post and all the things so we get the recognition and so we can go out there and say we're fighting for you constituents right and so we're kind of we're looking for direction from leaders around what are the things that we can do so that we're all actually working in coordination as opposed to us having 15 little bills on the margin but a handful of big ones and then what do we accompany those with so blueprints have been very effective we did this actually around child care costs in California starting about 10 years ago and it was a whole coalition of a lot of different organizations coming together on the cost of child care and over the last 10 years we've really worked on solving that problem and it's been this blueprint that's really worked we did the same thing with abortion the future of abortion council got together before the Supreme Court decision and said here's the 15 things California needs to do to make sure that we have safe and legal abortion here and the women's caucus everyone took a bill and we all kind of ran with it so you're kind of giving lawmakers direction on what do you in coalition with a series of other groups want to see done to help impact working families and that's my answer so there you go I got off the hook I'm gonna piggyback on that one so I a lot of we didn't call it the blueprint but that was the idea and it was in the muni bond space and it was essentially I was at a nonprofit at the time and we were sort of the facilitator for these conversations because the investors didn't want to talk to each other directly they were fierce, fierce competitors and so I think you know cast a wide net as you think about who could be part of that blueprint group in our case we brought the research expertise and helped basically get into the measurement what's our unit of measurement how are we gonna do this that was our value add to the conversation so both bringing together unlikely groups unlikely collaborators and also helping on the measurement side but I'd say yeah cast a wide net in terms of who could help with that work and what's interesting is the other side of it the people we were trying to get to disclose the issuers said hey could you bring in the regulators and mandate this because I don't have the buy in politically to just voluntarily disclose this and so actually everybody was incentivized to be part of this group it was you know please tell me I have to report this because as many of us know in the room a lot of these social environmental issues have become politicized when really it's the investors want the information the end investors, the asset managers I think I'm just I don't know what the question would have been to frame this but I try to raise this wherever we go you know a private investment, private equity has you know pretty bad reputation broadly there's a ton of skepticism real lack of trust and that's because you know a lot of the behaviors in the past have earned it but also I think you know part of it is how can you go and represent that you you know are advancing good outcomes on behalf of all these communities in our country when you're in an industry where everyone looks like me not everyone but too many and so I think you know I hope investors and all the other stakeholders hold us accountable and our colleagues accountable for what we're doing on a systematic basis to change that you know we have a number of strategies underway I'm not saying we're perfect or the best but we have a lot of intention around advancing diversity in every way diversity of thought, racial and ethnic diversity in leadership on down in the work that we do so that we can run better companies and ensure that the best and brightest talent are done on the sidelines but also that we are informed by the perspectives of communities that we are trying to have an impact on so just maybe it's a little bit a depressing place to finish up hopefully not but just picking up on that it just strikes me having this conversation we're here we're in a safe space you're gonna go back to Berkeley for a lot of people in America certainly we should be finding a rear guard I mean this is all an insane conversation because instead they're like taking out even the ESG you know the whole movement that says you can't even measure basic ESG because so I don't wanna leave this conversation without at least addressing that because on one hand we're talking about the future and how much we can move this forward in a reality where in half the represent the people who represent half of the people in this country basically at a federal level are wanting to like strip down even the minimal of progress that's been achieved around ESG reporting and ratings so just a quick prognosis from the panel on where do you think that all plays out I mean you guys have built a business premise on going long on ESG and data and metrics I mean you have as well all of you guys represent in some way a view that that might that's not gonna be taking down all the ESG data reporting it's not where this society's gonna move so any last thoughts on how you see this work differently because of that movement and what are we gonna do about it yeah I think it's up to us to engage I don't think we can only talk to people who agree with us who recognize the importance of these topics education's a huge part of it so I read everything I wanna read from skeptics and people who agree who I see at conferences and a lot of what I see when people are skeptical I do think that there's a big misunderstanding a lot of the times even in the definition of what impact investing is and one of the earlier panels was talking about the fact that many impact investors are looking for market rate returns so it's first let's do our education let's make sure we're all talking about the same thing and I think that goes a very long way a couple things on that question I think it's an important one so the first two Republican debates that issue didn't come up and I thought that that was interesting because I kind of would have expected it to if it was a winning issue somebody would have leaned into it so maybe it's not polling as well as they thought maybe it's just useful in the moment but not for like a broad strategy I mean my objective opinion is a lot of this is the fossil fuel industry putting this issue up front because they're pushing back against the movement around climate specifically not all the other things that we're doing which really emerged as financial risk mitigation tools and value creation tools and so on some level and I had this play out a lot when I was in Washington you know you get in a room with a lawmaker and they'd say John I totally agree with you and the president but I can't go out there and say that or like I'll get primaried and I'll be out of here and you'll have somebody way more extreme than me so there is part of it where folks have to grab onto what they think is popular sentiment right now and it's a proxy for other things I'm hoping it dies out I'm not terribly confident our politics are gonna get much better before they get maybe a little worse but at the end of the day we're going along on these matters our LPs the institutional investors on down have told us they want us to charge ahead not just because they're morally aligned with what we're doing but because they do see this work as a value creation tool and so do we so we're gonna keep charging ahead and test the bounds of what we can do but I think it's gonna continue to be fraught because the country is very divided I'd say divided in some ways I mean my last role was with an organization that surveyed hundreds of thousands of Americans every year we saw consensus on the issues if you're talking about worker issues a lot of these different metrics that we're measuring there's consensus in terms of them being important workers getting injured on the job you're right about the risks and opportunities business owners have been collecting these metrics forever I mean it just used to be a compliance function but now it's under the ESG umbrella so I actually I do think there's more consensus especially for someone who's running their business thinking about the long term or just student every day person who's out there working maybe trying to support themselves or themselves in a family can I just wanna build on that I actually think it's a really good point part of what's a challenge here is the language so some of these terms and words are triggers so when you say ESG or impact or whatever people don't like that like I had a one CEO of a business we were looking to buy and I talked about DEI and he says oh that sounds political and I said well no it's not let me walk you through what that means you just told me you got a fight for talent you've got people leaving that's one of your biggest challenges why would you wanna leave talent on the sideline do you wanna make sure you've got best in class compliance yes of course do you wanna make sure you're guarding against cyber threats yes of course do you wanna make sure that if you say you are good you can prove it right and what do you think consumers want every consumer going to a doctor wants to make sure they're getting good care how do you measure that right so yeah I agree with you that's a great point last word and then I think we're gonna hand it over we do a little network session out front after the 2016 election I stopped predicting anything because I learned my lesson and my focus is just focus on solutions so that is where my that's my space but really helpful I mean the idea of focus on solutions leave the language and service of progress I think that's really important and then you know we have to be able to see I mean at your point Lorraine in all the despair there's a lot that we find the commonality that exists which is underneath it's the data underneath the noise