 Good morning! It's early isn't it? We start this early and we do apologize to you for starting this early but in order to pack everything in that all the exciting things that are happening in this space we need every minute we can get. So I've got several announcements to you. It's a little early for me y'all. I've got several announcements to make. The first one I would like to, the first thing I would like to say is just a huge thank you to all of you for your patience with us yesterday. Because of the reorganization and remodeling of different spaces here at Fort Mason we've had to rearrange how we're doing things and the configuration that we have in here in Festival Pavilion is the biggest example of that and of course we had we're not able to test what this would be like having a thousand people in the building until yesterday and the way we had it set up at first did not work very well. We've made several changes to the way the microphones are working and to the way the speakers are pointed and we think that we are going to be able to handle the noise a lot better but the big thing today is the Blue Angels will be flying. So if you think the noise problems we had yesterday were bad it's going to get worse so be ready for those sonic booms or whatever it is that's going to fly across they they're getting ready for an air show that is right here and they practice it right here. So just giving you a heads up as it were. I also want to tell you about Socap TV. It is happening in Batts Theatre and what Socap TV is it is a theater that is recording 12 to 15 minute talks for us to put up later. We have tried to figure out how to get people to watch 20 and 30 minute talks like we do here on the main stage and they're really just not that interesting they don't have that much of an afterlife on the internet but in an effort to try to get the word out about what's happening with social enterprise and impact investing we are doing these 12 to 15 minute videos asking people to bring their very best ideas to a very succinct talk so that's happening in Batts Theatre it's in your program book on page 29 you can go and watch those I know it's tempting to not go watch them because you will get to see them later but it's also a great kind of place to go and wind down it's not interactive you go and listen to somebody do a talk anything from Lisa Kleisner talking about targeting system systems level impact to Peggy Clark say talking about artisan enterprise in the new startup economy and everything in between you can find something you'd be interested in there and again that's on page 29 in your program book what's happening at Socap TV also want to call your attention to the marketplace again there are ladies from thistle farms are there with their goods with their herbal healing oils there there's also jewelry that some of our entrepreneurs have made various items that entrepreneurs around the globe are making that they have brought in and several people have said they're doing their Christmas shopping there tomorrow so you may want to go today before it's all bought while Chuck Cannon won't be with us this morning he will be back this afternoon and he will be in the marketplace at noon with his CDs many of you have come to tell me how much you have enjoyed having him here which was a great relief to me it's a little weird you know in scary to bring a musician and put him on the stage at a conference like this so anybody else who wants to tell me that it was a great idea I'm glad to hear it so thank you for affirming me on that so it looks like our room is beginning to feel fill up and we have another great packed session for you this morning and Lindsey Smalling who has put all this together is going to come and tell you a little bit more about it thank you very much morning everyone happy Thursday all right so yesterday hopefully you were all here for the plenary and enjoyed your sessions what we were really trying to do yesterday is set the stage for the amazing history that this field has the leaders and the moment that we're in this moment of transition where it really feels like we're hitting sort of an inflection point and what I'm excited for you to see today is the way that there's a lot of new sectors new industries coming in and re-understanding sort of their role so what you're going to hear from the various segments in this morning morning's plenary are organizations that maybe seem like of course they're involved in impact investing and others where you might not expect them to be involved in impact investing in social enterprise but I think you'll really see how all these pieces fit together and and make the industry a lot stronger so who I'm gonna bring up first and I'm really excited for you to hear from is Tyler Norris from Kaiser Permanente and Deb Nelson from social venture network and they're gonna talk about the role of anchor institutions and the way that these anchor institutions are reimagining their role in society through employment through procurement and I'll let them tell you more and see all right wow wow good morning everyone you all woke up early and I have to say you all look so awake and focused either you're very excited to hear what Tyler has to say or you've had a lot of caffeine already so it's great to be here my name is Deb Nelson I'm the executive director of social venture network and I'm thrilled to be interviewing Tyler Norris who's the vice president of total health partnerships at Kaiser Permanente and for those of you who don't know Tyler already he is an amazing human being very innovative very insightful and most important and incredibly kind person he's been a social entrepreneur for the past three decades he founded a dozen companies and social ventures he started a program for homeless men back in his 20s that's still growing and thriving today he created a national park system in Tajikistan in Central Asia he has advised over 400 cities and government agencies and philanthropic institutions and he's really a pioneer in the rena's of healthy communities and healthy people and it's just passionate about making sure that everyone has an opportunity to thrive and grow and be their best selves so it's pleasure to be here with you this morning and and I wanted to start with the fact that you've done such innovative work in a different area of impact investing in community health and community impact and what inspired you to do the work that you do that focuses on healthy communities and healthy people and what is the work that you're doing today that you're most excited about thank you Deb beautiful introduction good morning everyone my aspiration has always been to do what I could to contribute to healthier people and healthier communities my daughter came home the other day and plopped an Institute of Medicine report on the table that said that after a century of increasing our lifespan by 30 years that children born today will be the first generation that may live five years less than their parents and she said you've been on airplanes for the last 25 years what have you been doing and it's really this question of what is it that actually produces health if we spend three trillion dollars a year on sick care services why aren't we getting a return on investment to health rather than just more and more growth in the medical care sector so I work started working with Kaiser Permanente in my previous firm as a client and help design their community health initiatives that have been flourishing across across the country but I decided to go inside kind of pick my favorite client and go in for for this reason that I knew that Kaiser Permanente with the Affordable Care Act was going to bring in more people through Medicaid and the exchanges who were less healthy than the people that we have right now and that we would be paid less reimbursed less for those individuals at higher risk for health and at the same time how would we maintain the highest quality care in each of our markets so high quality more people less healthy less reimbursement and that's what I said yes to I was in for that challenge and the reason is that that's what the country faces we have to learn how to do that overall in the Affordable Care Act and so Kaiser's model is you've been unique because we're both a delivery system with 20,000 physicians couple hundred thousand employees and a health plan we're actually at risk for the health of our members in other words we do better when people are healthy as opposed to most hospitals get paid when people are sick and so we actually have an incentive for healthier people and healthier places and it causes us to sort of lean in more so we're about a $60 billion company and a nonprofit we were born in the Richmond shipyards and Rosie came out of came out of Kaiser Permanente's early work and I think the the key piece for is it's not just us but as we look at what the incentives are for the health care sector 20 cents of every dollar in the country the incentives increasingly in the Affordable Care Act is how do we produce value for those dollars not just more volume of care a lot of people make money off of sickness our goal is to actually how do we do better by producing health in the first place and how do we do that in a way that's more affordable because clearly the cost of health care are on top of every product every service and it's you know attacks essentially on that and it's challenging America's competitiveness frankly that makes total sense thank you so I am a Kaiser Permanente member been a member for 15 years and I will always be grateful to Kaiser because their doctors and nurses saved my son's life nearly eight years ago so so you have a strategy that's brilliant and you can have it you know any company or nonprofit can have a brilliant strategy but if it's not working on the ground and if it's not working human to human it doesn't mean anything yeah but I've been a I've been more and more impressed with your model how innovative it is how effective it is in terms of community impact and one of the ways that you get at that is by investing one point five billion dollars in firms that are owned by women and people of color that's off to you for that thank you now that's a big part of your work and you talk a little bit more about that and how that ties into your model for community impact and health sure if we're first of all if we're going to talk about impact it looks like the slides not loading very well but we need to talk about what creates health in the first place only 10% of what creates health has to do with medical care services and 30% is genetic and our biological inheritance it means that 60% of what creates health has to do with behaviors in the context of the socio-economic environment in our communities in other words health care is an intervention it does not create health healthy communities and economic opportunity education access to food access to mobility access to a living wage job that's what actually contributes to health so if we're at risk for population health and frankly we think that the health care sector ought to be at risk for producing health not just more services we need to invest in what creates health in the first place and it has to do with a much broader array of issues so what we've learned in our in our significant investments about two billion dollars a year worth of community benefit is that doing two and three and four five year grants and ten thousand here and a hundred thousand here and a million there it does not create a healthy community you find bright spots we do interesting things but it doesn't scale unless we go all in with everything we have so our model has been moving from not only how do we just do good grant making and all that but how do we use literally every asset of our organization to improve health so back to the whole idea of procurement right we do a billion and a half dollars with women and minority owned firms that's out of fifteen billion dollars of total procurement and what we're saying is we not only want to get the best deal to manage costs but how can we use that purchasing to drive the local economy so that by spending money with local companies who invest that money locally rather than it being exported to Wall Street actually drives the flywheel of the local economy which is a health producing factor so that's one part of it with our procurement with our HR for example we're expanding right now in Baltimore we're moving into Freddie Gray's neighborhood we can't just come in there and put in a medical facility and put some grants we need to grow the workforce and the people who we need to hire some of the skills are missing in that community so we're partnering with the high schools and the community colleges and the workforce investment boards to grow the workforce skills which again not only helps meet the care needs but particularly to grow the determinants of health through building local wealth creation and then increasingly we're using our our investment portfolio my colleague was rocket is here from KP ventures to be able to make investments so for example if we're trying to scale access to healthy food we can make grants we can do multi-year contracts with smaller companies that is bankable to buy truck refrigerator or pasteurizing and we can make capital available to to actually scale food and we can do that with mobility home care and other areas so we're saying in order for us to have the impact we want we need to be all in with everything we have and we need to have partnership because clearly and as you look out at this room and who's it so cap so much of the skill sets and technologies and approaches and relationships that are needed to deliver on this we don't have we may be big we may be able to do a lot with this kind of resource but we have to partner with frankly everybody in this room to be able to deliver on that equation not only with our friendly competitors who we work with very closely we can compete on cost and quality but when it comes to health we need to be all in with our competitors and with our with the diversity of the innovators in a community to actually produce that kind of an outcome so investing and buying local is it and and we have to do much more that makes a lot of sense so how do you measure your impact and what's the impact that you've measured that you're most proud of so just to we first of all we measure everything and you know my smartphone here with me but we have 10 million members and everybody can get their electronic medical record on their phone email their doctor see their lab see their test it's coordinated so we actually have a tremendous amount of data that we're able to use to improve the quality of care and manage costs which is what makes us a great health plan and make a great system but we also measure underneath clinical quality and cost we're also measuring the determinants of health we do community health needs assessments every three years and in fact it's a very much of an ongoing quality process so we can correlate cost and quality with the outcomes of population health how are reducing diabetes rates do people have access to fresh food what are education rates in the community what is the rate of living people living with living wage what are education attainments in Oakland where my new adopted community the high school graduation rate for young black men is in the 30% range that's not okay we're focused on that with everything we have in Oakland Unified Schools because we know that's upstream so we measure what traditionally hospitals measure but we're also measuring all the determinants of health and then with health the PwC right now we're actually looking at how we measure all of our impacts the social impacts the environmental economic and economic impacts so that we have a baseline on intended and unintended beneficial and not beneficial what are we really doing so that we have a very deliberate way to make sure that everything we do is adding up socially economically environmentally as well as then producing health as a byproduct of that rather than thinking about health as an intervention of a medical care system so if you go back to our business model the reason that it's important that we measure all that is that for us to deliver the best care at the best cost we need to be able to invest in communities in a way that certainly provides care for people who need it like we were talking about with your family earlier but that but that reduces the preventable demand that reduces the demand on the system which is actually preventable it's driven by inadequate investments in communities of color the lack of health equity disparities and our community struggling economically through disinvestment and the kind of things that Gar and Angela and all we're talking about yesterday that's why we're all in for that things we're proud of for example are we just invested a billion dollars to meet 50% of our total energy use through wind and solar that's creating green jobs here in Alameda County through the wind farms and Dan and Riverside County through the solar there that is a 20 year investment is helping build the market for wind and solar for large folks so that's the kind of thing we're measuring and tracking about what we want to hold ourselves accountable to since we're not accountable to Wall Street we're accountable to our members and Main Street that's great more power to you so both the mission of Kaiser Permanente and the work that you do it really supports the notion that health care is a human right and not a privilege for those who can afford it can you talk a little bit about health care and equity my vision of the American dream does not include rationing health care by wealth so I think morally we have a responsibility to everyone in this country to make sure they get care for themselves and their families and their children at the right place at the right time etc that's a moral value of ours and it matches what Henry Kaiser thought when he founded the company and gave the health plan away to become a nonprofit rather than making it a make it a for-profit but there's an economic case too it just does not make sense to not provide preventive care to not invest in what creates for the health in the first place to have people miss work have their families struggle you know all the things that we go through and we're sick ourselves are going through and then have people end up in the emergency department at five times the cost and pay for that why don't we invest in creating healthy food and access to physical activity and supports in the first place rather than just reimbursing for more diabetes care and I think that's really what we're saying is there's a lot of money to be made in sick care and we're trying to make sure we're making it out of out of what's creating health in the first place since that's really the mission beautiful and that's where equity makes it really important and I don't mean cash equity I'm talking about equity of opportunity for everybody in our country yeah I'd love to hear a little bit more about what call to action you have for this community the SoCAP community the mission driven business community the impact investing community I invite you to challenge us a little bit and share what what we can do together I've been at this work of trying to create healthy communities for a long time and I'm humbled by it it is not easy it takes a tremendous amount of time it takes the kind of time and patience that it does to raise a family and I think we need to be thinking generationally about this not how do we make you know a quick product or app and flip it out in the next year of course our companies need to grow but how do we make these longer term investments in what creates health in the first place so there's a lot that we can do but really I want to make an invitation to folks in the room and Liz and I hear from Kaiser Permanente and our team basically want to make an invitation because we know that if we want to look at the totality of what creates health and kind of address that we need to scale access to healthy fresh food so everybody has access to healthy fresh affordable foods if we want to make sure that people live in safe neighborhoods where there is mobility that there are transportation and transit systems that are available that every young person has the opportunity to reach her or his potential that we actually look at potentiation for everybody we need to partner with our community organizations to help make that happen and that those social environmental and behavior needs around home care and meeting people's I mean we can provide the best care in the world which I think we do but if we then put somebody back out into a toxic community what the heck that's not quality that may be clinical quality it's not total quality so to be successful we need your partnership and that doesn't mean your pitch to our venture group or hey we ought to give a grant for this or that that means we need to understand what can urban strategies bring and how do we work with you how can we work with impact investors like Kresge and others that we're working with impact capital like we are in the California Fresh Works Fund to actually bring capital to bear on those things that address the underlying needs that drive health and that meet the social and non-medical needs of patients so what I'm saying I think is that as I look out at this you know room I mean look around just yourself for a minute look around I mean really this is some of the most extraordinarily open hearts bright people whose missions are to do something really good of course many of you are building ventures you're raising money trying to bring home a bring home the bake good for you go after it but let's go back to what Gar said in the panel said yesterday it's not about project ism and let's not ever let this be some flea market of one company that's cooler than the next we have an opportunity right now to take a look at what really is underneath prosperity not only in this country but in all the countries that we represent this is a global opportunity and so basically I miss you in an invitation come meet with us and talk with us about here's what you're trying to scale here's what you're learning not like some pitch but here's what we might do together and I think in the context of SOCAP social venture network Bali the democracy collaborative and the local partnerships on the ground not to mention the investors and innovators and grassroots leaders on the ground that are really touching what matters most we can actually have an impact that creates the dream that I believe we're capable of in this country and around the world and that this group is capable of doing it so join with us and let's let's do something that is worthy of our lives that's a beautiful invitation thank you Tyler all right I just want to thank you Tyler and I invite you all to take him up on his invitation please come see him and Liz rocket come see me after the session we're going to be joining you in a minute and and share your ideas on how we can connect the dots how can how we can all expand our impact together thank you all for being here thank you Tyler thank you Deb so Tyler just told you how they're really taking an expansive view of their whole portfolio at Kaiser and I think as all of you think about your whole portfolio there's a pretty good chance that includes some holdings in public markets the ESG and SRI community has been around for many many decades and precedes the impact investing industry and I'm really excited to have Steve Falsi here from PAX World Investments to tell you a little bit about the way that they're thinking about the expanding and important role of ESG and SRI in impact Steve thank you Lindsay and good morning I first came to Socap three years ago intrigued by all the energy around impact investing and wanted to see how sustainable public market investments fit in and become a part of that conversation it's been great to see how Socap has helped that conversation evolve and I'd like to continue to hear this morning at the plenary and also where there's a panel at 11 that's going to deal a little bit more about how public markets integrate into impact investor portfolios I have the privilege this morning of representing PAX World Investments who's been a leader in sustainable investing dating back to 1971 when we launched the first socially responsible mutual fund I'd like to share a little bit of our perspectives on the evolution of sustainable investing and the increased linkage across its evolution to impact and how we very much believe that public and private market investments can be an integrated in a holistic impactful way our CEO Joe Keith has suggested three stages to the evolution of sustainable investing the first stage was was socially responsible investing with the focus was on exclusion of companies usually based on specific issues but there was also the early stages of share owner engagement and ability to have impact by talking to companies and helping them change behaviors and I don't think anyone would deny one of the biggest and most impactful events that sustainable investing has had is the engagement and the subsequent divestment of companies doing business in South Africa that led and was a contributor to bringing down apartheid in that country this first stage continued what we would see it into the first taking of the 21st century where we began to evolve into sustainable investing where the emphasis was no longer on exclusion but on inclusion including companies in a portfolio based on their environmental social and governance profiles looking at the risks and the opportunities in these variables and integrating it with traditional financial analysis to make better investment decisions at this stage there was a lot of support from studies and research that showed in fact ESG factors could have financial materiality institutional investors began to take notice and began to embrace sustainable investing as an investment decision investment discipline rather than just a values choice and traditional money managers have begun to take notice nevertheless today we see sustainable investors want more okay my portfolio is invested in companies with good ESG profiles but how can I make sure I'm invested in companies that are making a positive impact we're moving here beyond the exclusion of SRI and beyond the mere integration of ESG in sustainable investing to look at demonstrable impact and that takes us to the phase where now the impact phase that many in this room have been leaders in bringing to the fore it clearly builds on the first two phases but brings additional clarity around two objectives delivering competitive returns while also having significant social and environmental impacts in many ways I see impact investing is bringing bringing clarity among a lot of the acronyms and abbreviations that sustainable investing has used and has caused frankly some confusion it's brought impact the term and the objective of four through its role in taking looking at innovative vehicles to channel capital with precision to entrepreneurs and projects that might otherwise have fallen through the cracks in doing so they've delivered returns and had significant and measurable impact and in doing this I think they've put forth with clarity the aspirational goal for all of us having impact at scale but to do that I believe we must continue to all come together no matter how we choose our affiliations whether we call ourselves socially responsible investors sustainable investors impact investors or mainstream investors we need to look at portfolios comprehensively for return and impact across asset classes and investment styles looking at private market investments that are providing essential capital with focused impact looking at sustainably publicly traded investments for companies with better ESG profiles and some of these companies that are providing impact at scale and engaging with other companies to have an impact and make them better corporate citizens and as we succeed in delivering returns with impact we will all achieve what I believe is a uniting and overarching goal is attracting more and more capital to building a just and sustainable world thank you more and more capital for a just and sustainable world sounds like a good idea so this panel I'm very excited for there were two huge announcements in the impact investing world this year from Bain capital and from BlackRock these major financial institutions are making big commitments impact investing but I think that's raised a lot of confusion from folks in the field trying to understand what that means and what we can expect what the timelines are we thought you might want to hear from them directly so we've got Brian Trelstad from Bridges Ventures interviewing Deval Patrick of Bain Capital and Debra Winshill from BlackRock please welcome them good morning I'm Brian Trelstad a partner at Bridges Ventures and it's a delight to be here to talk about impact investing going mainstream when I was at the Acumen fund in 2009 we were thrilled at the prospect of raising a hundred million dollars to invest in emerging markets business is serving the base of the pyramid we thought that was real scale today I'm proud to be part of a fund manager Bridges Ventures which manages roughly a billion dollars investing funds in real estate growth equity and social sector entirely dedicated to impact and sustainable investment but sitting on stage next to a 75 billion dollar asset manager Bain Capital and a 4.7 trillion that is trillion with a T asset manager in BlackRock it puts scale in perspective so so no two better people to talk about impact investing going mainstream then Governor Deval Patrick at Bain Capital and Debra Winshill from BlackRock so welcome thank you let me start with you Governor Patrick you had a distinguished career in public service you were the governor of Massachusetts you were a senior executive in corporate America after leaving the Statehouse in January of this year you could have done anything why did you choose impact investing well first of all can I just make clear I am not responsible for all 75 billion at Bain Capital we're we're just standing up a new a new fund but I would say sort of philosophically that I feel fortunate to have like most people want in search of meaning in their lives to understand that for me to have meaning in my life I had a meeting in my work and the jobs I have I have had in the main have been very meaningful and I wanted that to to continue your colleague and my mentor Ronald Cohen introduced me to this field starting with social impact bonds when I was in office and and migrating if you will to impact investing was natural very serendipitous that the platform happens to be Bain Capital and huge fun and opportunity in that but that's a longer story and Debra how about you you were I started your career in investment banking you were the CFO of the Metropolitan Museum of Art you were then the president of the Robin Hood Foundation how did you come to to BlackRock and impact investing well I would say with a lot of luck I really can't believe that I'm having the opportunity to bring all this together at BlackRock I started I went to business school already with an eye on how do you bring together discipline and analytics to social impact and being a a classic humanities major in college I knew nothing about business or analytics so after business school I went into finance really with the intention of how do you learn to think about businesses in a more disciplined and sort of outcome oriented way and then never left or didn't leave for a very long time and then at the Met it was a great opportunity to help a mission-driven organization align its mission with financial in outcomes and as everybody in this room knows even if you're mission-driven you have to have a model that's sustainable going to Robin Hood was an incredible education around metrics and how do you use metrics to measure things that are very difficult to measure like poverty fighting and I think it's without lens in that background that I have the opportunity to come to a BlackRock and look at what is very traditional investment management and think about how can you balance two objectives at the same time. Now BlackRock is about as mainstream as it gets with roughly six percent of the world's professionally managed capital and yet it's still a relatively entrepreneurial firm can you tell us the story of how impact investing within BlackRock got launched and what your focus is right now. Yeah I love how it got launched and it was one of the reasons that I was drawn so much to BlackRock. We had the whole area of engagement and responsible investing is very deep in BlackRock's DNA. It's been one of the largest sort of engagement firms in many years. It has a group that's been of 20 people who just spend time looking at ESG factors and thinking about how to vote our proxies but in addition to that there was a group of millennials at BlackRock who had been on their own researching impact investing understanding the field put together a business plan went to our leadership and presented it and got the sponsorship of our senior leaders to think about this in a more organized sort of business platform way and that's when I came in so really building on the back of an initiative that was very grassroots even at BlackRock. And today high-level some of the thoughts about where you're heading. Sure I we look at this business we look at this sector very broadly we have tremendous respect and admiration for so many firms I know you know we were just talking about who've been doing this for a long time you know we come at it in a different way we we you know it's a very large ecosystem and we think there's an opportunity to look across all asset classes the public markets the private markets and really bring some definition transparency some measurement to a lot of areas of asset classes that don't really have anything in this in this area. And so you know using very clear definitions helping clients both institutional and retail think about the motivations what is it they'd like to achieve and what are some potential solutions some of which I hope BlackRock offers and I think many of which many people in this firm in this room will be offering as well so I think that's how we feel this whole area can be more mainstream by getting clients and investors comfortable how do you define this world what are the different segments what's available in the public markets that's liquid what great opportunities might be more accessible now in the private markets so that's the approach we're taking. Great and governor when you first started having conversations with the partners at Bain what motivated them to think about raising an impact investment fund. Existing limits had been asking you know I was I had friends at at Bain Capital and I was just in sort of soundboarding with them ideas that I that I had frankly in very other very different spaces and one of the senior partners lean forward and said actually we've been trying to figure out how to get into impact investing for a few years now and they were having a conversation at the time about acquiring an impact fund of funds from a bank that was having for a variety of reasons to divest itself. They asked if I was interested in coming in and helping with that and I said actually no because I'm interested in direct investing and one thing led to another and they said okay let's do impact let's do direct investing come in and help us build the build the business and we've resolved now to essentially do a private equity fund that would do investments growth capital and control investments in lower middle market firms in North America operating in three areas and sustainability in health and wellness and in something we're calling neighborhood revitalization and we'll look forward to to rolling that out formally probably first quarter next year we're busy putting the team together now. Great what were some of the biggest arguments against the idea or internal debate about either the strategy or whether this was a good idea? Any arguments against I think we were we found ourselves very aligned on a couple of things and I realized there's a range of view in this room but that first of all that a competitive market based private equity style return was important to deliver and while I respect that there are folks along the spectrum there at at bank capital and personally I think that's important for a whole host of reasons we were focused very much on deal flow where were the real opportunities to come to scale because part of mainstreaming I think from our perspective is how do you help a mission driven enterprise which is also a for-profit enterprise demonstrate that it can operate at scale and with all of the considerations that entrepreneurs always have about exits and liquidity and for themselves and their and their investors but also how you have mission lock and can you find someone in a secondary market which I think frankly does not exist in this space today who is going to be as respectful of the mission as of the of the financial so I think we're actually quite aligned and we worked in an iterative process to where what the size of the first one should be and what the speed with which we should be trying thoughtfully to deploy those assets and what the timing of the second and third funds might be and Debra so much of impact investing is private capital venture capital private equity and yet black rocket is a leader in public equity fixed income I'm just curious how you're thinking you've talked a little bit about this but how you're deploying these capabilities and how you see impact investing moving to the mainstream from institutional investors only towards individual the retail investor I think one of the ways that we're hoping we can help sort of broaden the market for these kinds of investments is just clarity about what it is we're offering so first of all we're looking across all asset classes and we're looking at them in three ways we're you know we're called black rock impact but it's really about sustainable investing and we have a long history of business and screens you know just excluding companies or industries because of values or missions of clients we have a pretty deep existing practice around ESG and we think there are a lot of opportunities to help clients marry ESG considerations how companies operate with financial return and then that last category of impact where we very much view it is here's your financial outcome here's your impact outcome measurement reporting transparency and taking that model and bringing that across asset classes so for example we're about to launch a product or maybe we did just launch it this week it's been a blurry week that's a public equity product but that incorporates impact reporting so to us having that kind of product that can be scalable liquid mainstream very clear impact reporting so that not just institutional but retail clients can really understand what it is they're getting we think taking that lens of reporting whether it's in green bonds or infrastructure some private a lot of public is just something that we can bring to the sector that hopefully will continue to create we think there's a lot of interest in both the retail and the institutional markets but increasingly provide a framework that makes clients and investors more comfortable taking these opportunities to their investment committees or just talking about them among themselves in a way that they can start to think about in a mainstream way when we say mainstream it's having holdings that can be in your core portfolio it's not that sort of two to three percent of the of your portfolio that maybe you're allocating to niche investments we think that what's going to help move these conversations is allowing investors to talk about it in their mainstream holdings that's going to start to change I think what we're all going to be able to start to encounter in that conversation with investors and building on that and asking both of you you know some would argue and this is San Francisco after all that this is not impact investing going mainstream that this is impact investing selling out so how do you defend against that potential critique and specifically define impact as central to your strategy how do you keep the bar high either of you well I'd start first time you know given my last job I'm accustomed to being criticized no matter what I do if I if I walked on water I used to say somebody would say Patrick can't swim so I'm I look people there are lots of different ways to be engaged in impact investing I don't I want to make clear that from our perspective the impact is not secondary we screen for impact theoretically first and then the financials and when I talk about scale I'm not just talking about scaling the financials I'm talking about scaling the impact what is it we do from this baseline to get us there and being capital's custom has been to be a very activist investor very engaged in helping to build the company and our anticipation is we'd be engaged on both of those fronts or all of those fronts going forward second thing I'd say is that you know in a way you could see I and I do see impact investing as the natural extension of or maybe the the articulation of a return to long-term value we have a very short-term focused economy in the United States and in many parts of the world where we're managing quarter to quarter and sometimes getting those short-term returns I think without regard to the long-term impact on the enterprise frankly I think that has infected our politics as well where we govern very much you know election cycle to election cycle or news cycle to news cycle and not generation to generation you think about the long-term value of an enterprise that depends on more than one bottom line yes the financial bottom line but also environmental stewardship the relationship with the community the relationship with employees and and a whole host of things that we think of sometimes I think mistakenly in our short-term economy as secondary to the money so you know we very much of we want to be very much about about long-term value and I think in that in that respect the the the impact investing field and and the patient capital or long-term value traditional investors are already aligned they may not know it yeah I'd like to echo what Devaltia said because you know BlackRock has always been very much about the long-term investing we have a CEO Larry Fink who I think is known globally for really reinforcing that long-term approach to investing and in hand in hand with that is BlackRock's history of speaking to companies about their ES and G behavior you know what are they doing on the environment social governance because we have to vote all these shares we need me need to make sure that they're behaving in a responsible way so we do think that having this model very much like Bain of what is the financial impact let's be very clear about what that return is and what is the non-financial or you know sort of the other impact that every investment in every company and every project is creating good or bad in terms of your question about is this impact light or you know what is it greenwashing I think what we can do is as I was saying before be very clear about with every product and every opportunity what we're offering if it's a screen all we're doing is removing objectionable companies or industries that a client doesn't want in their portfolio we're not calling that impact but we do think there's an element of responsible investing from a client's perspective that's a solution we can offer when we're talking about ESG products where we're looking at how a company behaves we think that is also an element of responsible investing we're not calling that impact even though our name I know is BlackRock impact but you know we're going to be very clear with clients this is what you're achieving this is what you're accomplishing and when we're talking about impact we're talking about it in a way that I think is much more consistent with the way that it's been defined but quite honestly you know to create something that gives broad access to lots of investors globally and this there's global demand for this it's going to look different and as long as we can be clear about what it is we're putting on the table knowing that it might be might have some characteristics that are similar to traditional impact but also differences I think that's our obligation you know not to just put this all under this rubric or umbrella of impact but be very clear what the tradeoffs are and what it is we can deliver at scale and when you know as as Deval said I don't manage or have anything to do with most of those trillions but what BlackRock must do whenever it offers something it needs to be scalable and we need to be realistic about you know what we can offer but I do think that having this opportunity to direct such significant capital to opportunities where these issues are being articulated and you know responsible investing and outcome oriented conversations are happening is just a trend that's good for everyone and and do either of you guys have a house view on some of the industry standards like the sustainable accounting standards board or gears are those things that are part of what you're thinking about putting together is we love it all you know we at BlackRock we're working on our own standards and at the same time we're looking at industry standards and if there's an industry standard that can be as rigorous as we think is needed we'll jump over to the industry standard you know from our point of view the most valuable thing we can do is help create broad standards what is green you know what is you know when you talk about carbon intensity what are we talking about what is the measurement scope one scope two scope three you know just always pushing back I think the SASB is fantastic work anything that drives clear reporting and measurement is good for everyone so we're you know I think I don't want to lump it all together but we think every initiative that the industry is undertaking to try to drive to that kind of clarity fantastic Brian our intention is to measure at the enterprise level at the level of our buckets if you will and also at the at the fund level and we've gotten two kinds of feedback in talking to many of you in this room and in the in the field one is please please please use a measure that's already in common use rather than inventing one of your own so that there is some ability thank you to the six of you I spoke to there's some so that there's some ability to to compare with others who are doing comparable kinds of things on the private side and the second is to is what is the second I forgot the second I'm having a very moment what the first one is so good Trump's a second yeah it does trump the second but the second is about not turning the enterprises in which we invest into data collection right enterprises let them to have their business and run their their business so let's get the data we can and that is meaningful and that actually gives us insights into into the movement on on the impact side without being so burdensome about the about the detail that it becomes a distraction go ahead no no so I was gonna say I think we are we are trending toward gears iris as as measures very excited about sasby there's a there's a gap kind of thing coming in this in this field sounds like black rock and others are gonna have a lot to do with helping to shape that and that'll be good yeah I think that you know you hope it's coming together we look at something like green bonds where there are a lot of conversations and we're just pushing for the largest issuers to get around something that we can all adopt when we look at infrastructure and we want metrics there we're like let's try to use whatever we can create in the green bond sector and use that in infrastructure so I think that there's the more commonality even across asset classes and the greater the simplicity which I think is something you are also driving up the data you want it to be meaningful but you don't want it to be so complex that no one can understand it or use it so we think it's that intersection that you know is really what we're all we're driving toward right and finally develop me let me close with you you have a pretty long perspective of not only how markets evolve in this country but also of how movements can catalyze and have catalyzed change in this country is impact investing a market or a movement and where do you see this market slash movement heading over the next decade well I think it's both and I think that's not unusual in markets you know the the most interesting thing is talking to endowment CIOs about their hesitation around impact investing when they are when you know I asked them were you around when this new idea called private equity was invented and they said yeah we were around and we did that and somehow or other they figured out that could work I think I think conscious capitalism is a powerful idea and I think the notion that and an important and timely idea and I think it will grow and it will be up to those of us in this room and rooms like it to spread the word and not and not feel quite so jealous and I say that lovingly but quite so so jealous about how how great we feel about what we're doing in this room we have to we have to proselytize a little bit about the importance of aligning our values with with financial value if the planet is to be saved if if communities are to be uplifted and frankly if capitalism itself is to survive it's to survive so my view is back to what I was saying earlier we've got to move to a more long-term way of thinking about economic value and when you think about it that way social and environmental value are very much aligned right well that's very well said and and hopefully the large crowd here understands that these conversations are now happening within mainstream institutions and so the conversation that we've been part of over the last decade is in fact now around the partnership table at Bain and in the senior leadership at BlackRock so I want to thank you both for taking the time and welcome you to the impact investing industry and we look forward to seeing you around at many socaps to come thank you now for a brief interruption some announcements I made this announcement earlier but wanted with more people in the room to say a deep thank you to all of you for your patience with us yesterday as we worked on our sound issues and we have made some adjustments in this hall that we believe are going to make it better it's not going to be perfect there is going to be bleed through from the rooms but we hope that you'll bear with us because working in this kind of space and not a hotel environment with there's a limited amount of things we can do and it's going to get worse you all know the blue angels are flying this weekend and they start rehearsing this afternoon and we ask you yes they're going to be sound interruptions they so when they fly over if you're talking just as I said yesterday take a deep breath do some yogic breathing that will pass also want to call your attention socap TV which is in half happening in bats theater it's a great place to go it's not interactive people are there giving 12 to 15 minute talks that we are recording to show on our site later there's some great talks happening there be sure and check it out I think it's on page 27 in your program book everything that's happening there if you want to just take a break from the fire hose that's coming at you in these rooms here socap TV is a great place to do that and finally I want to commend the marketplace to you where I hear there is some great Christmas shopping going on for with the products from this old farms and from entrepreneurs around the world and at noon today Chuck Cannon will be there signing CDs if you're interested in taking a little bit of Chuck's music home with you you can do that today at noon and Chuck will be back with us in our session tonight and now I'm going to turn it back over to Lindsay everyone socap is a great place with all these folks in the room to make some exciting new announcements and Calvert Foundation which has been a long time partner of socap and is always coming out with new ways to democratize impact and reach new populations is here with an announcement Jennifer Price thank you Lindsay and thank you socap for taking this time to be with you to make this short announcement but really very deeply connected to what we're witnessing at Calvert Foundation as this field moves into the mainstream I share this vision or this view from where I'm witnessing it at Calvert Foundation we are an impact investing fund we've raised over a billion dollars but we've done it in a very special way what we have done is enable us retail investors to engage in this movement so that means everyday people like you and I being able to invest for as low as $20 we also have investors as large as 20 million and all that capital we aggregate and then invests in social entrepreneurs around the world so connected to yoga breathing I was going to take you on just a short journey this morning to kind of drive home the reason why we're creating this new product in the market so if you could close your eyes don't fall asleep just kind of ground your feet on the floor and you might start to understand that I opened a yoga studio before I came into this world as leading Calvert Foundation so this is enjoyable for me but close your eyes ground your feet take a big breath in and take a big breath out and as you breathe out kind of clear all the clutter out of your mind so you can have some clean space and in that clean space I ask you to develop an image of an impact investor envision this person's face their eyes their hair their mouth get a clear vision of this person and hold this vision hold this vision and then as you open your eyes I ask you does your vision look like any of the people here on this screen this is the opportunity this is our future Latinos women Millennials will be transforming our investment landscape these are groups that perhaps have not been activated now even into the traditional investing market simply because there's not the on ramps so people don't feel empowered perhaps they're not aware because it's not culturally resonant how we're communicating things as simple as language English Spanish or because perhaps they don't have the assets yet the wealth to really invest and be part of a movement but this is the future the future investments in the future of the social capital markets we need them involved in the work that we are doing we at Calvert Foundation has spent the last few years engaging these groups of people women individuals Millennials and it's so kept 15 we're proud to announce a new initiative which means roots in Spanish and English and roots symbolizes what we've learned from our market research that Latinos both see their roots here in the U.S. and in their countries of heritage this initiative will invest 25 million predominantly Hispanic regions in the U.S. and Latin America targeting education health care and financial services Latinos are a powerful economic social and cultural force one that is poised to expand dramatically over the next 40 years if impact investing is go become mainstream practice that means Latinos need to be involved so come visit us at our booth go visit vested org and just a quick moment as I wrap up to acknowledge the people that made this partnership this initiative possible IDB MacArthur and Kellogg Foundation as well as the State Department at USA so this is your opportunity to broaden the impact investing movement go make an investment and join us thank you all right so hopefully you've enjoyed the session so far that big panel with Bain and Blackrock it's going to be followed now by some folks that you expect to see at Socap you may be expect to see a lot of places where you're looking at social change Ford Foundation MacArthur Foundation and the Gates Foundation have all been doing amazing work for years and they've all redoubled their efforts around impact investing and understanding the power of using these markets for change they're also re-understanding their role and they're here to tell you a little bit more about that so I'm welcoming Greg Ratliff from the Gates Foundation Debra Schwartz from the MacArthur Foundation and Christine Looney from the Ford Foundation well good morning everyone I'm Greg Ratliff with the Bill and Melinda Gates Foundation and I'm here with Debra Schwartz from the MacArthur Foundation Christine Looney with the Ford Foundation and we want to talk to you about impact investing and the history we've had and this has been a great conference for me because I ran the impact investment portfolio at MacArthur in the 90s and have been working in higher education for the last 10 years so I'm sort of coming back in and it's interesting to see a lot of things change a lot of issues like exits stay the same and I thought we might start off with some reflections from Christine about the current state of the of the field where we are you've just done I know a landscape analysis so maybe tell us what you've learned sure well first of all it's great to be here and I'm excited to see so many people in the room I think you know Ford started this market scan but probably before I talk about that it might be good to give some history and context for our involvement in the market which started really in the late 60s when we started making PRIs worked with the IRS to allow private foundations to make them and since then we've had almost 50 years of investment experience which in and of itself has given us a lot of lessons and practical practical experiences in the field they think as importantly when I think and being on a panel with with Deborah especially has been such a partner to Ford in all of our work over the years it's important to kind of reflect on what what some of our most important or most meaningful investments have taken to kind of get to the stage they're at today and if I reflect on markets like the community development finance market in the United States or the microfinance market overseas Ford and MacArthur and others were early early stage investors in these in these organizations and it wasn't just the investment capital though that made these this field grow to where it was today it was a combination of investments plus grants a lot of support to things like trade associations and ratings agencies and measurement tools and just even capacity building for these institutions so if you look at the self helps for one example who started small and now a million dollar organization to you two billion dollar organization and you know I think it's important to kind of look at to see kind of what it took to get them there we we found ourselves you know about a year and a half ago under with a new president Darren Walker and we were looking at the growth of this space and looking at the role that we had in it and we'd been investing at that at that point really to support our own programs and we've been doing some grants but once again to really support our own programmatic initiatives and we were kind of reflecting on the amazing growth that was taking on in the impact investing market the number of new investors and and kind of step back and said well what role should philanthropy be playing in this and is there a role for Ford within this and so we engaged monitor Deloitte to really help us do a scan of the market really just kind of level that where we thought the market was up and I think for for those of you who are you know practitioners in the space what we found won't be alarming to you it was one thing that came out was that there was a lot of hype in the market that this was the solution for all solutions and that everyone can make you know tons of money and deliver the impact and I think there was a level of huge investor appetite but maybe a lot more work needs to be done in terms of investor preparedness on the demand side we saw just a huge growth in the sophistication of the types of of products and organizations and funds that were emerging but it continued need for more organization to help investors not only find them or them to find investors for general marketing and communications of of those products and then in the middle some very nice in an emerging market infrastructure but that needed to be developed further to help connect those two and I think Deborah will really speak to that and that so that was kind of our the first stage of almost our level setting of the market and and the second was really a dive into well you know Ford could enter this but in and of itself we could do little so what would it look like if we took a collaborative approach to this work and so I'd say the next phase of this for us has really been speaking with so many of you to see where there opportunities for collaboration and to develop kind of partners for us as we kind of start this initiative no that's great Deborah do you have anything further to add in terms of the state of the field thanks and I would just build off what Christine says that I think Ford and MacArthur and Packard and many others you know have been at this for a long time but I think that was for a set of challenges and enterprises that don't look like the full scope of the social sector today you know we have a much wider spectrum of everything from pure nonprofits that are looking to build what the Herron Foundation calls philanthropic equity to hybrid models and we've worked a lot in the affordable housing space with joint ventures and LLCs there's all of those kinds of things to public-private partnerships special purpose vehicles so what's really wonderful right is there's this incredible spectrum in the social sector and now there's also this incredible spectrum of investors right everything from the mainstream investors we just heard from the Black Rocks and Bain and others Morgan Stanley Goldman and it's a long list a whole emerging class of specialty advisors and also mainstream advisors who are building mission into their practice high net worth individuals and then retail investors and you heard from Calvert which has been in that retail end of the spectrum as well as an incredible array of foundations and the mission investors exchange with which Christine and I were part of when it first began 12 some odd years ago has 250 foundations the global impact investors network global a confluence philanthropy U.S. so there is an incredible wonderful vibrant community but to Christine's point the next challenge is really how do we as foundations that have significant capital to put to work and we have 300 million dedicated 100% to impact we also have a 30 year track record so not quite as long but we've deployed about a half a billion dollars and we've learned a lot as Christine said and so I think the next generation of our work is how to bring those assets our risk tolerance our capacity to do dogged problem solving and how to take all of that as well as the kind of ingenuity that it's taken to really build up individual sectors and individual enterprises and how do we help build a marketplace that really in a fluid and meaningful way connects the flow of capital making it easier for those who are trying to raise the capital to get it on the terms that really work capital that's suitable not just capital the capital that's suitable how do we make it easier and more suitable for investors of all kinds to play together and I think I'll just leave it with saying you know the G8 task force report last year the global task force talked about this next generation being about risk return and impact I would say that the work that our foundations and others have done for the last 30 to 50 years has been all about creatively applying tools of various kinds to meld risk return and impact our next generation of work needs to really be about ease suitability liquidity because we've got to get to a much more efficient ecosystem so entrepreneurs don't end up struggling so hard and so long to cobble together the resources they need for the invention and innovation work for the growth and scale and for their long-term success it's just too hard too slow no that's really great so you guys talk a lot about the proliferation of actors and players in the space the kinds of transactions that are being done I mean it's a really dynamic time and I'm I'm curious you mentioned risk what are the challenges in that new space you've got all these new people coming in they're they're trying to figure out how to work together what are the issues you're most concerned about as you move forward maybe I'll start and so I think for me there there are a couple I think one is with new entrance and new energy people may be starting to almost recreate the wheel when others have been kind of working on things for quite a long time and it's out there but we just haven't done a good enough job marketing some of this or sharing the models yeah and the second it's come up quite a bit but is this kind of fear of greenwashing that we have new investors coming in who are almost selling their products with impact as a selling point but maybe it's not as front and center to what they actually really want to do and so are we are we is this market in in jeopardy of that and maybe the third is maybe around just overall complexity it's complexity of language and the perpetuation of that how many different ways we're kind of all describing what we're doing I think it makes it pretty confusing and for for new entrance coming in the space and they and then the second is this complexity of product development we've worked on many transactions together where we're you know one of up to 20 investors all with very boutique interests in transactions and it's costly and time-consuming and I'm not even sure at the end of the day we're all even extremely satisfied with where we got so we need we need to really simplify not only the language but the products we're putting out there to make it easier for capital flow more effectively yeah I mean when we think about the global kind of risks within the marketplace I agree I think there are there's a very healthy discussion at this venue and others about this issue of quote-unquote impact or good washing I would put it a little differently I think that that we have to be honest that not all kinds of capital are going to be right for certain kinds of problems and that when you're looking at certain kinds of enterprises really honing in on sort of deep challenging social environmental issues enterprises that may be very untested very innovative unusual markets the truth is we need to be very actively making the capital work for them and that's what I would call sort of deep impact you know it's not just enough to have money and motivation you actually have to be prepared to look at how to blend the public the private the philanthropic capital and make the solution work those kinds of investments I've often said are not just made they're not they're not just lying around you know they're made not found the problem I see is that as large flows of capital come into the space if we don't build some products to Christine's point that make the connection I think it's unreasonable to expect that the large deployment of capital is going to be able to do that artisanal finance right and so I think we'll get a lot of shallow impact which will be okay it'll be good it'll be better than it is today but they may leave out the ability to really continue scaling things that that are incredibly valuable to solving some of the biggest problems in our world and so our challenge is how to go to deep impact and not just shallow impact and I think that's one the other is sort of the shadow of subprime and also some things that happened in the microcredit world I think when investors expectations are inflated or hyped and you get a lot of money rushing in you get very smart people who say there's money for me to make if I wrap myself in the impact mantle and so there is a job for foundations I think but for all of us to be good stewards of mission and that's never going to be cut and drive no those are great great comments thank you guys so let's get to the good stuff so you know you mentioned ever your 300 million compared to the 75 trillion of the mainstream investors right and so increasingly foundations are a smaller part of the capital in the impact investing space so I'd love to hear you talk a little bit about how you see your role shifting and how it needs to shift and then maybe transition into based on the on your sense of the landscape what are the specific things you're playing planning to do going forward what kinds of projects how are you going to position yourself how are you going to collaborate well again I want to echo what Christine said I think that you know we're just like forward very mindful and we started about two years ago looking at this exact question around the same time that Christine and Darren and Frank and Zava other colleagues at Ford were looking at this because we're mindful of this incredible opportunity right more capital than ever wanting to find ways to be meaningful and you know we've learned how to knit together the deals that unlock impact on a transaction by transaction by transaction basis and that's powerful right I mean we have 15 years of working on one issue alone rental housing in the United States and our 200 million dollar investment in that field building up a set of enterprises and intermediaries has unlocked 15 billion dollars in new capital and hundreds of thousands of lives and homes have been transformed and that's great but we can't be the only source of that 200 million Ford can't be the only source of the capital it's provided to microcredit so one of the first steps is the collaboration and Darren Walker convened a set of presidents from foundations that make impact investments earlier this year and that's an ongoing conversation and I think that's an important part of the future for all of us is that the institutions themselves that have the most flexibility that have the greatest ability to take risk and innovate that we work together to create a real community of support that fosters innovation and a next generation of marketplace capacity so a couple specific examples would be the new products that Jen just announced so in addition to Raisis a fund called age strong another one that she announced with President Obama around investment in India MacArthur was able to provide a modest amount of grant support but it helped them do the legal and technical work involved in a new structure another is impact us and both Ford MacArthur have provided seed capital to build a new online marketplace and Liz will be talking she's somewhere in the room I think at 1215 today she'll be talking about that another to the point that Christine made is documenting what we already know about creative solutions and Bruce Campbell will be talking about the innovative term sheet project which Ford and Heron and Peton and Sorenson and Blue Haven have offended because we can provide a library a playbook and people both entrepreneurs and investors will not be stuck having to figure this all out from scratch so those are just some examples I have one more but why don't we shift over to Christine yes I think to your first point in terms of the role of philanthropy this was a question that came out in our market scan and I think resoundingly whoever we interviewed kind of voice that there is a big role for philanthropy to play in this growing market and I think for foundations it's kind of looking at all the resources we have available to contribute and they're beyond I mean grants are an important piece the investment capital and our ability to be flexible with that and as catalytic as possible in terms of supporting growth in the market will be really important there are also things like convening power there are things like the leadership that these foundation presidents can bring to the conversation both in terms of really bringing home this notion of impact and and being a standard for a good practice in the market so I think there are there are many many opportunities in terms of philanthropy to engage for Ford going forward I think for us we're looking at something that will be almost a three-part strategy that will include a grant component as part of a new impact investing initiative that will be very market-facing I mean I think to Deborah's point we're going to try to support as many things as we can that will be catalytic to the market and better connect the investors and and the demand side we will be engaging quite a bit in terms of supporting public policy and I think we've had an important win with the recent Treasury guidance there's a lot of positive moments from around Orissa but bringing I think alongside these movements in public policy the the really necessary communications and education that will really make these policies not just move forward but actually effective and so that we can implement them and actually have more capital flow to the issues we care about and the third will be within our own investment fund strategy and there I think for Ford we're really looking at how we can engage in markets and make markets more effective versus looking at particular transactions and individual investments so the more effective we can be at that in being a real catalyst and being flexible I think the better and more of a contribution will be able to make the market. So I equate Christine I think we're going to be putting grant dollars to work to help share innovations that exist new ones that are coming into being and be a resource in that way to help again foster kind of a community of collaboration and product innovation and market building I think it is important to recognize that matchmaking in this world is important right and there's some really exciting platforms emerging but matchmaking itself the matching is not going to be sufficient that if we really want to connect the supply and the demand size of this marketplace we actually need to do true market making and that means putting our capital at risk and finding others who are willing to put capital at risk in a completely different way so I'll give you an example of a product innovation because I think we are not going to get to a liquid suitable set of products that really allow large flows of capital to come into the deep end of the pool if we don't actually make that happen so for example this summer we completed a transaction where the foundation instead of just providing risk mitigation you know we've done that for many many years where we will provide just enough first loss or guarantee protection you know to help an investor say okay it's a little bit unusual or I'm a little bit uncomfortable but now I'm okay or to basically get the risk return equation to work in this transaction we did something called a liquidity facility and for those of you don't come out of investment banking that is not a liquidity facility is not a glass of wine it is not a room in your house or the kitchen sink a liquidity facility is a way of standing behind an investment and saying when you investor are ready to exit we over here the market maker will buy you out and we will buy you out and take the risk that nobody will ever want that security and then hopefully what we will actually do is be able to then be the bridge to the next investor and the reason we did this it was a large social enterprise that it hit what we all know as the Valley of Death we had helped launch it together with Ford two years before it had scaled up to a certain point but the equity that it had wasn't sufficient to get to the next level of growth and it needed to get to that next level to start to really tap in to more mainstream investors so here's this classic gap and what we were able to do is to bring two financial institutions to the table who really didn't want to do equity that was not their thing and they really didn't like the idea that this was an investment that had a ten year horizon and actually no real mechanism for exit this was not a fund and the equity does not have a life on it it's indefinite life so we provided a 25% promise that a quarter of that equity would be something we would be willing at MacArthur to buy at a later date and it worked so that's just an example of what we mean by trying to actually inject liquidity to this next stage of the market and we have other projects send away and we really look forward to conversations because we think there are ways to engineer new models so I'm wondering if you guys to the degree you're willing to name names could say a little more about the kinds of financial institutions and partners you think you need to sort of realize this vision because listening to you I'm going to play a little devil's advocate I hear you meeting with each other foundations and foundations talking and to pull this off that can't be the case and so how do you include more mainstream financial actors in the dialogue and the structuring and design well just tell you I mean we have five or six big projects underway we're talking to investment banks to family offices to RIAs you know and that's one of things that's so exciting for us is that the real explosion of interest in impact investing means that we have a much wider array of potential partners but at the end of the day there are a set of players and big foundations are among them who bring important kinds of resources into the mix so we are I think necessary but not going to be sufficient and to use Christine's word we need to catalyze this community of market building it'll not be any one of us cannot do this we need talent and expertise traditional capital markets tools and expertise all of that's going to be required yeah I mean I would I would completely agree I think just partnering with foundations would have been the easier play but as you said we're such a small percentage of this market and so like Deborah I mean we're in our conversations they've expanded much you know well beyond philanthropy and we're we've really been attempting to be strategic in terms of where the big pots of capital and what what will it really take over time to unlock that and so having conversations with like the IO investor roundtables and people like that who donor advice and another example and government importantly as a huge kind of catalyst beyond philanthropy in this market and so I think it's going to take all a many many different types of institutions to kind of make this as effective as we like it to be so we're open to those partnerships that's great well we are out of time so we'll have to come back next year to hear how it all goes but please join me thank you our panelists all right so we've been hearing these pieces kind of individually we've heard from the foundations we've heard from these major financial institutions but to make any of these deals happen if any of you have tried to do it takes a whole set of stakeholders coming together and I think sometimes it's helpful to understand a particular case study to see the way that these various players all come together the way each of you in whatever role you have can play a role in this so I'm excited to bring to the stage Gabriella Parsella from CEO and president of Mellon Capital who's going to talk about the role that they had in helping a family foundation work through some ways that they wanted to address climate change use their investment dollars to do that and the way that Mellon Capital was able to support that welcome to the stage Gabriella Parsella oh everybody it's great to be here great to see so many faces and a couple of familiar ones out here so I'm going to share a story with you guys today and it's story about investing in a way to help make social change and and to start off I wanted to share so Mellon Capital is an institutional investment management firm and that means that we work with foundations endowments and pension plans and we've done that in a very traditional way over the last 30 years but recently we one of our clients came to us and gave us a really difficult question and the question was how can we take our investment dollars that are part of the portfolio and put them to work in a way that will help support our mission and they really wanted to focus on environmental objectives and you guys might say if you don't work with many institutional investors what's the big deal why does it take so long why don't those institutions just start putting them their dollars to work and it's this balance of figuring out how do we meet that fiduciary duty and still invest in a way to support environmental objectives and having been a lawyer I'm kind of a recovering lawyer turned CEO I can tell you that this fiduciary duty is real and it's it's difficult it's a constraint right now that we're trying to break through and that is because if you look at the words and the rules right now they're written in a way that we have to focus on the exclusive financial benefit to the beneficiaries and that is something that we can kind of get tripped up on now the good news is we're seeing more and more that there's acceptance that environmental factors are in fact risk factors that need to be considered as we're putting portfolios together and that's really promising so my story begins two years ago and that's when the McKnight Foundation came to us and said all right Mellon Capital you've been our manager for close to 30 years now and you manage our portfolio that helps fund our foundation and we'd like to figure out how to get those investment dollars under the control of our investment committee to work in furtherance of our mission and if you if you don't know the McKnight Foundation there are two billion dollar foundation based out of Minneapolis and their mission is to improve the quality of life for current and future generations and they've been working on investing toward that mission through their grant program but they hadn't figured out a way to get their investment portfolio to also support the mission so they came to us and said can you help us here and and we did and actually it took about a year if you can believe that and it wasn't just working with the McKnight Foundation but they also had two consultants that they're working with Mercer and imprint capital so the four of us got together and started a very heated and healthy debate about how best to do this and as you can imagine anytime you get four organizations together we all are very passionate about investing and about ways to make an impact so it did take us a little bit over 10 months to come up with a strategy that we all felt comfortable with and this process of collaboration and partnership that we went through was actually quite unique and so so much so that Oxford University actually wrote a case study about our project and made that part of their impact investing program that they presented at the said business school so we're very excited about that so in the end we decided that of all the environmental objectives that we could focus on we would focus on carbon and I wanted to share a bit about why although given this crowd you guys probably know a lot of these facts I'll just share it with you briefly so this is what we know about the numbers we know that an average passenger vehicle emits 4.75 metric tons of carbon dioxide we also know that it will take 122 tree seedlings 10 years to be able to sequester that carbon and even beyond that we know that an average American household actually emits 10 times more carbon than a passenger vehicle so clearly there's a lot of emissions that are happening and when we looked at the concentration of carbon dioxide globally you see this rather frightening steep escalation and this really inspired us to focus on carbon as an area where there's urgency to act and it's really the time to act is now so with that as our as our kind of goal we looked at a lot of different alternatives and we're often asked why not just divest just don't invest in any companies any fossil fuel companies or any companies related to fossil fuel and and you've heard in the press quite a bit across college campuses there's been big cries for just full divestment from endowments after looking at this carefully we decided that this was not the right approach for us for two reasons the first is that full divestment was going to create risk in the portfolio risk of potentially not getting the returns that were needed and also increasing volatility but second and actually as important if not more importantly if you fully divest you lose the opportunity to engage with those issuers and we feel like it's very important to help drive change from within the companies and when we go in and we engage with the companies we're really asking for two things we're asking for greater disclosure because if you've looked into this you'll see that not all companies disclose and even those that do disclose disclosure could be improved and then secondly we're asking for a clear plan for how they will reduce emissions in the future or and or will invest in other renewable energy sources so we think that's the best most comprehensive approach so the solution we came up with was the carbon efficiency strategy and what this is it's a broad based equity strategy where we look at individual issuers and then we decide whether those issuers are ones that should be rewarded should be penalized and they could be penalized down to a zero holding and we also look to engage as I just mentioned earlier and what was really important in creating this was something that was clearly measurable and objective and so the standards that we put out is you know first on the reduction of carbon the portfolio has to reduce the carbon emissions by 50% or greater second from a fiduciary perspective we want to make sure that we have enough risk management in the portfolio that we won't deviate from the stated benchmark by any more than 50 basis points and then third again we we engage with the companies that we invest in so that was the three prong approach that we put together to create the strategy for McKnight now Mellon Capital is owned by the Bank of New York Mellon and the Bank of New York Mellon has really started to up their engagement with social finance and you might have seen some white papers they wrote recently about the five characteristics the five things that are needed if you want to bring social finance to scale and the story I just shared with you about the McKnight Foundation touches on all five of these characteristics that are needed it's accessibility there's accessibility for institutional investors to put their dollars to work in favor of reducing carbon it's measurable because we set out these two targets of reducing emissions by 50% and keeping the tracking error to 50 basis points it's a transparent strategy that invests in publicly available securities publicly traded securities we're looking for a systemic change through reduction of carbon and then lastly collaboration which I shared it was these four organizations coming together to develop a strategy together so in conclusion what we're looking to see and what we're very excited about is that you know finally we're seeing ESG factors being taken seriously as risk factors that can be included in a portfolio and we're we're having a lot of really interesting dialogue now with other institutional investors foundations endowments government plans and pension funds and we're having those conversations not just in the U.S. but across the globe so there's a real interest globally to try to make make a difference and we're hoping that Mellon Capital will be able to play its part in working with organizations to put their investment dollars to work in a way that can make an impact and can help their greater mission and I guess my ask for all of you here today is that perhaps after hearing this story you can think about how you can put your own personal investment dollars to work because it really takes all of us if we all put our own investment dollars to work that's really the way that in the end we'll be able to solve some of the world's toughest problems thank you all right so when you work in this field you meet a lot of amazing people and some of them there are amazing because of the work they're doing some are amazing because they're so willing to spend their time with you to exchange ideas with you I hope you all meet those people while you're at Socap I'm excited to bring to the stage two people who I absolutely cherish every minute I get to spend with them I've learned more from Fran Siegel over the last five years than just about anybody else and Ariane I've met more recently but is someone who's always thoughtful always wants to hear a good question and the benefit of having them both up here is not because they're wonderful people but also because Ariane is one of those people who has found that magical space where financial return and impact are not compromised he's running a very successful fund called core innovation capital and I'm excited for you to hear from them the way that works the way Ariane thinks about this work the impact that he's having and all of the other topics that they're going to fit into the next few minutes so please welcome Fran and Ariane can you hear me I'm Fran Siegel I am chief investment officer of impact assets which is a nonprofit financial services firm focused on increasing the flow of capital to impact investing and I am delighted to be in dialogue with Ariane Shuta who is a founder and managing director of core innovation capital just we wanted to kind of contextualize our discussion for a moment you've heard this morning a fair amount about about mainstreaming and about incumbents entering the field institutions putting capital to work and Ariane and I are both really passionate about democratizing about making financial services making impact investing available to all to the retail investor and so we hope that we can offer a slight point of contrast to some of the other speakers this morning the other thing is we talked a lot about the supply side of capital so drawing more capital into the space whereas Ariane's work and his partner Kathleen his business partner Kathleen put money to work and so we'll be talking about impact entrepreneurs not just the supply of capital but also the demand for capital so a first kind of opening salvo is the core innovation invests in companies that serve the domestic unbanked and underbanked so I'm wondering if you could talk about what that market is and quantify it if you can and talk about why the sector is growing sure so thanks Fran and it's great to be here I can it came to this after reading a book about a guy named Muhammad Jonas and he was new to me and microfinance was new to me I'd spent a decade building educational software and a bunch of venture backed companies and I was just really genuinely blown away with what they'd done and I'm an immigrant here myself and so I didn't want to go to Bangladesh or India and I was really interested and kind of inspired when Al Gore was sent packing when he went to visit India and talked about global warming and they said you come from the biggest polluter go back home and fix your own backyard and so I've been really inspired to do what we can from our side to fix our own backyard so I went looking for who's doing this kind of stuff in the United States and I found myself in South Side of Chicago visiting with the founders of Shorebank for some of those who know about Shorebank they've from their little corner of things done an incredible amount to really advance community development and financial inclusion not just in Chicago or in the United States but really globally and so while on one hand I was really like deeply inspired by what they'd built I also looked at what that community had done in terms of scale and after about 40 or 50 years the community development movement while it has done remarkable things in local neighborhoods if you add it all up and look at it from a United States perspective is serving about one half of one percent of the population and so it hasn't scaled particularly well and so one aha was gosh there's incredible work very powerful important and powerful work going on but it hasn't scaled at all and so when you look at the United States right the income divide is growing and that represents a dire policy problem many many tens of millions of customers underutilized traditional banks and overutilized alternatives those alternatives are extremely expensive it's expensive to be poor as it sadly turns out and so this is also a dire need and but there's also a flip side to it and that is that is not just the need there's also is incredible opportunity and so as we started looking at how do we reframe this as an opportunity right you start looking at it from a revenue perspective and so the need that we have around financial security for low income people in the United States and financial mobility for low income people in the United States actually represents about a hundred billion dollars on annual revenue that low income people spend on very basic financial products all products that probably almost everyone in this room gets for almost free and so no matter how empathetic we all may be we basically live in a bubble and it is hard to imagine the incredible expense that is incurred by an incredible number of people who live all around us and so looking at it through a market lens was really the aha that led to the creation of core and to the thesis of investing in financial services companies that could serve low income people at scale to the tunes of tens of millions as opposed to hundreds or thousands or maybe tens of thousands and do so in a way that is profitable and uplifting for them economically I spoke yesterday in a session with Kathy Clark about how focused I am on the microfinance movement and global sustainable agriculture lending in emerging markets and you touched on this a little bit but but how those markets in some ways from a lending perspective are ahead of the United States and what can we learn from microfinance and global sustainable agriculture which really look at the rural poor and the urban poor as strong credit risks and what can we do to help build the credit rating of folks at the bottom of the pyramid and just wondering if you can kind of elaborate on that you have roots in both microfinance and community community banking but it just occurs to me in the wake of the financial crisis and subprime lending that the low to moderate income folks have kind of gotten a bad rap in some ways worse than ever before and so can you talk a little bit about those some of those market factors yeah so clearly there's a lot to learn from what's happening around the world and in many very important and annoying ways the United States is antiquated and behind from its financial services offerings however we've and I've been scouring for a decade now to find ways to translate what's happening abroad and apply that here it's very it's been very hard to do that in many cases literally because the financial services infrastructure United States is so different there are other places in the world where they are similar like South Africa or Brazil or more similar than or the UK or the EU than many other places but it's hard to replicate literally and so what what but where there is tremendous power and lessons from abroad to be applied here is more metaphorically speaking and so for example this notion of a social collateral is something that the United States barely utilizes so there's about 70 million Americans who don't have a FICO score and that doesn't mean that they are subprime or irresponsible it just means that there isn't the data in TransUnion, Equifax and Experian that create a FICO score and so they're invisible and so it's a continuous challenge for the United States financial services system to underwrite this customer accurately so they're not risk-adjusted they're basically treating all of these thin file or no file customers as subprime customers at their detriment and so the microfinance world for example has figured out very powerfully how you use your community and your friends and your loved ones and the notion of shame for example to decrease defaults that is hardly utilized in the United States and is a very powerful idea and one of our portfolio companies is actually trying to do that in a very modern way so we invested in a company called Vouch and Vouch is trying to be an alternative to a payday loan payday loan famously costs three-digit APRs it's easy and to get you know riled up about that at a cocktail party but Vouch is trying to address the same customer at one-tenth the price of a payday loan largely by helping people leverage their social collateral so helping the lender Vouch basically determine the the resilience of someone's character and character is really hard to define and so they basically allow you to engage your social community to vouch for you to sponsor you you can either say Fran I think you're responsible and it'd be a kind of a soft vouch or I could if you're trying to borrow five thousand dollars I could say I'll back you for a hundred bucks and you could get ten people to back you for a hundred bucks it's kind of like a cosine and that's a very modern online translation of a very old idea right that's existed in microfinance for a long time and and then you know more old-fashioned forms of borrowing for millennia before that so as an example of how of how we're kind of metaphorically importing some ideas from abroad so I think of the kind of investing you do at core as kind of fintech for good for fintech for impact there's been a lot of discussion around fintech it's it's quote-unquote super hot right now and and and how do you see yourself fitting within the broader trend of fintech in in serving this very particular constituency yeah so we're unique in the United States in that we're a fintech investor that knows the sector well but is decidedly interested in investing in companies that are economically empowering for low-income people so we have a an angle on fintech we play very nicely I think with the broader ecosystem and by and large we co-invest with mainstream investors we'd love to co-invest with more impact investors but I actually have none as co-investors but we do have Andres and Horowitz or Greylock or Google or Venrock or Charles River and many others as co-investors who and who co-invest with us for a variety of reasons they may not call it impact maybe they call it reputation risk management or maybe they just gels with one of the partners or maybe they see it as you know effectively increasing the enterprise value ultimately if our thesis is right we're able to align creating high impact and great returns by investing in companies that are gonna create long term value on lots and lots of customers and that ultimately translates to higher enterprise value and it plays out in financial services that if you look at companies that are more predatory like companies that are publicly traded you actually see that their enterprise value is relatively little on an EBITDA or or revenue basis versus companies that provide much longer term value and so that's how we're trying to marry these two ideas so that they're actually synergistic to each other as opposed to in conflict. So let's move a little bit now bridging to financial returns and you probably know Aileen Lee from Cowboy Ventures who famously coined the term unicorn which is privately held companies that have evaluations of at least a billion dollars and the list is growing of those and so I'm trying to coin the phrase impact unicorn and an impact unicorn and I think you invest in impact unicorns where you can seek to achieve market rates of financial return as well as very very strong impact and that the financial returns are released because of and not in spite of the impact but the true story of impact investing is that it's a spectrum from return of principle to concessionary term to market rate and even premium rates of return. You have have spoken specifically about this dichotomy of missionary to mercenary and I was wondering if you could expand on that dichotomy and say where you think core fits on that spectrum. Sure well and I think of it as a spectrum and not a dichotomy and it's kind of a it's meant as a characterization which is meant to both insults kind of people at either end of the spectrum as a stimulus to get them to think differently and so right I kind of see the spectrum as there are missionaries on one hand and basically the missionaries are you know will give lip service to the business part of it they know they need to talk that language but at the end of the day they're really mission driven nothing wrong with it great very courageous group of people and there's mercenaries which I also don't see as particularly wrong and that's frankly most of society and like you know these are not evil people and you know the good or the impact may be you know an afterthought or kind of you know the community section on their website or something like that nothing wrong with that there's incredible philanthropic dollars and efforts and well-intended people who are on either end of the spectrum but you know what I mean and so from our perspective as we look at entrepreneurs the lion's share in the mercenary category a very small number of them are in the in the missionary category and we've found sadly that the missionaries by and large are not company builders it's difficult for them to raise the kind of capital they need to build the kind of scale that we think is important even though we are agreed with their intentions and the mercenaries basically don't care enough to build in oversampling of value to low-income consumers into their business models and to go through the heartache and the harder work to to make business models that work or to create technology that brings that drives real efficiencies like an order of magnitude type of efficiency where you're 10 times better than what there was there before and so we look for what we call the visionaries who are neither missionary or mercenary but they are the they're driven by the desire to really make deep impact as Deborah referred to I like that framing but they are schooled and effective in the in the in the business of business and those are and often they end up being what we call a kind of accidental social entrepreneurs they many of them don't know what this is or who we are or what is this you know so cap and the so caps of the world but they care deeply and so almost all of our entrepreneurs are accidental social entrepreneurs and I think we should all look beyond our right the converted to see who are the people who can really take us to the next level and many times they will not be right here amongst us okay so moving from financial returns to impact returns it impact assets we largely invest in fund managers and so we have a database of you know 500 600 firms that we follow and we we tend to invest in just a handful a year in the same way that you look at hundreds of deals and maybe only invest in a handful as well and we talk a lot in the space about aligning impact with financial incentives but the truth of the matter is meaning that the is a fund managers financial incentives aligned with the releasing of impact and I will say that I have seen like very few of these in the wild we all see if you know it's a good idea but you know it's it's very rare and core innovation capital is one of the few fund managers that that do this kind of alignment and I'm wondering if you can speak about that sure so we're looking to make market rate returns which in the venture space is actually very difficult because venture capital for those of you who don't know is actually really crappy asset class almost all there's a power curve in venture so almost all venture capitalists underperform S&P 500 let alone get anything close to what people think of as a venture returns and so the notion of concessionary within venture capital I think is a bit of a is a of a misnomer because it is discounting a already you know discounted median performance so for us the challenge was okay how do we combine these two and how do we stay true to being high impact and delivering deep impact and so we clearly have our toes to the fire in terms of creating great financial returns and our LPs bug me about this every day or whenever they get a chance that we should be you know like pushing that harder we've tried to build in into our into our inner fiber into our general partnership agreement and our limited partnership agreement also holding our toes to the fire to create great and scalable social impact and it's something that is unique and it shouldn't be and it's something that I would love to see more in our industry that we don't just rely on our good intentions and everyone here is incredibly well intentioned but good intentions are the road to I forgot but you know setting up an accountability mechanism is very important to help us execute highly against our good intentions and so we've built this system by which we basically tie our compensation to our not just our financial return but our impact and so when we underwrite a company we look for a variety of impact metrics how many low-modern income are they serving can they get the scale can they get can they reach millions are they providing are they saving them something like an order of magnitude over the best alternative and can they help the customer in the long term build assets build credit and find a pathway to the financial mainstream and then every year we create an objective report with data reported from our portfolio companies we have a three-person impact audit committee that is independent from us that scores us from 1 to 100 and that score equals 100% of our bonus and 10% of our carry and that and it's broken down to a number of parts and that practice in very practical ways has really helped us improve the way we execute against that and so you know if we get a score of eight or seven or something like that and part of our in part of our impact metric that is embarrassing right like that is not why we're doing this we're doing this to be in the top 1% the top 5% and so we we've made changes and you know again like I don't need to be reminded why I'm doing this but like having that mechanism is incredibly powerful and it's something that I would really like to see and encourage more people who are investing in funds or met people who are managing funds to self impose right to create a mechanism to follow Peter Drucker's kind of famous mantra of what what's measured gets managed to create excellence not just in great financial returns but social returns as well well thank you behold ladies and gentlemen and impact unicorn thank you all right so we've got our last speaker coming up and this is really a treat so this is about the feet on the ground this is about the people who are actually doing work and having tremendous impact we're about to welcome Prince Emmanuel de Maraud from Varunga National Park I'm gonna tell you a little bit about Prince Emmanuel after training as an anthropologist Dr. Emmanuel de Maraud worked for 20 years in support of Congo's National Parks he spent most of those years in the field supporting Congolese park rangers through the 12-year civil war that claimed the lives of over 5 million civilians and 140 of the Rangers with whom he worked in 2007 after witnessing the slaughter of nine mountain gorillas by armed militias and investigating the root causes of environmental destruction in eastern Congo he decided to focus his efforts on overcoming the illegal trafficking of natural resources in Varunga National Park as a result of these efforts he was appointed as chief warden of Varunga National Park by the Congolese government in 2008 to overcome the various challenges in the post conflict region he helped to develop the Varunga Alliance a Congolese initiative to create an alternative clean development strategy capable of eradicating poverty and bringing stability and peace to eastern Congo based on the sustainable use of water resources for energy and fisheries together with agriculture and tourism it's a real treat please welcome Prince Emmanuel de Maraud. Good morning it's an incredible privilege I'm extremely grateful to be here I think I perhaps more than most need to explain who I am I'm a bit of an outlier with respect to a lot of the discussions that are going on today but actually I'd like over the next few minutes just explain how important the work that people like yourselves are doing to the future of a region that desperately needs change and really the way I would like to do that is through the extraordinary team that I work with and in that to explain who I am I'm essentially what you what you would define as a middle-ranking civil servant in the Congolese public service I work for the government of the Democratic Republic of Congo as a national park warden as the director of a national park that's called Vrunga National Park it's located in the east of the country in a region that has been affected by what is now recognized as the most tragic episode in human history in terms of human suffering since the Second World War a war that's claimed the lives of over six million Congolese people six million people who should not have have died in that way and every single one of those wars has started either in or immediately around this national park that we've been trying to manage now for over 20 years and it's extraordinary team that I work with whose story it is I tell but for me at the beginning growing up in East Africa growing up in Kenya I had this very different image I had this image of this landscape in the center of Africa with these incredible mountains some of the highest mountains on the African continent with glaciers on top and that stretched down through tropical rainforests across these amazing savannas with some of the greatest abundance of large mammals of elephants hippos and buffalos and then through to these extraordinary volcanoes and these these permanently erupting volcanoes that give you a glimpse of the very center of the earth and between these extremes and some of the greatest diversity of wildlife on earth what essentially made it what essentially makes it probably the greatest national park on earth and of course that one species that drew me to Varunga and 23 years ago which is the mountain gorilla and this incredibly vulnerable species that's right on the edge of extinction but when I arrived I bought a motorbike in in Kampala and drove across East Africa and then across the border across the great East African Rift Valley and then down into this this amazing landscape what brought me there were the mountain gorillas and this amazing this amazing national park but what really kept me there was this team of Congolese Rangers and very quickly what I realized is I became over the years a part of that team was just the incredible sacrifice and that they had gone through and over 140 of them had died protecting this park and yet for months and sometimes years on end they hadn't received their salaries they hadn't received any support from the outside world and yet they were continuing this struggle because it was the work that they had always done that their parents had done and that grandparents had done this is the oldest national park in Africa the first to where conservation was born in Africa and this tradition was was continuing in spite of the incredible difficulties and and and it was met with incredible success the mountain gorillas were were increasing they doubled over the last 20 years until this terrible day in 2007 and when we heard gunshots up in the forest and came across the beginning of what was seemingly the end of this this species the mountain gorillas they were being they were being exterminated by militias that were moving into the forest and killing the gorillas and that really was the the event that precipitated a series of decisions that ended up a situation when I was asked by the government to take on this incredible privilege which was to lead Varunga's Rangers as their director and so we continued from there but what I didn't realize was that my work was not going to be about protecting mountain gorillas or wildlife or managing a national park it was about managing a deeply deeply troubled political situation and within weeks of when I was appointed I we discovered that an army was being created a rebel army and very soon that erupted into the third of the great wars of eastern Congo and these wars that killed literally millions of people and of course this was the view just outside my tent and when I wake up in the morning it was a war that came right up to the park headquarters and within within days our staff were forced out on this terrible march towards the city of Goma and into these internally displaced camps suddenly I found myself from being a park director to being somebody who had to manage a refugee camp for the for the Rangers and their families and suddenly we had to re-adapt ourselves to a situation of crisis and this this continued but I was surrounded by these very extraordinary people and it's them really who led me led me forward and helped me with these ideas and the first was this decision never to leave the park and so we spoke to people we spoke to the rebel leaders we spoke to the government and out of that came this agreement that the park would continue its work whatever the political situation and and we were able to continue the work but what really struck us what was a real problem was this struggle with respect to this National Park and there was this one photo this terrible photo that was taken by a good friend of mine of this wimp of this woman at the feet of one of our Rangers and it really captured for me the struggle that we were up against so it's not a simple it's not a simple matter this woman was trying to get into the park to obtain charcoal and of course the victim here is the woman but it's not that simple the the woman is a victim of the armed militias who are trying to extract the resources it's like a protection racket and you've got this economic situation around the park where you have what is essentially what was once a colonial economy based entirely on the extractive industries and that's gradually involved into evolved into a conflict economy and it's based around the extraction of charcoal in the forest destruction of the forest for charcoal this destruction of the water resources for illegal fishing and then more recently is this international corporation that came into the park for illegal oil and and this this economy was essentially based on coercion and patronage and was breeding these armed groups and what we found was this situation where we had 12 armed militias that were drawn to the park around these resources fish on the lake illegal fishing on the lake charcoal in the forests and then this illegal oil and the three together were generating about a hundred million dollars a year for the armed groups and we were completely disempowered in our ability to confront this and you know one way of explaining this is through my my colleagues in Osan and Bruno my my deputy whose brother was killed and protecting the mountain gorillas Rodrigue who spearheaded the investigation into the illegal oil and for his efforts he was illegally detained for 17 days and and and very very badly tortured to the extent that we had to get him out of the country and then a tamar and this this this this dear man who I worked with right from the beginning 23 years ago who moved up through the ranks and became a warden one day when he was coming back to the park he was shot in the back by militias and died of his injuries and so we were losing all these amazing people and we were helping us to protect the park my day came on a on a on a warm day in April when I when I submitted the report on the the investigation into the illegal oil to the state prosecutor this investigation that we've been carrying out for four years into the illegal exploration for oil I believed as I I still do now in my naivety that there is something about the the sanctity of the rule of law what you know what holds that society together and I submitted this report as I was coming back and five men were waiting for me in the forest and they shot me in the in the chest and in the stomach and left me in the forest it was two young Congolese farmers who who saw this happen and as I was alone in the forest they came and picked me up and put me on a on a motorbike and for two hours managed to get me to this local hospital who performed a miracle that enabled me to go back to my work and to really rethink what what we were doing and really what that what that came to was this idea that we were just too small too vulnerable too weak to really confront these big problems that we were facing and this idea of the Varunga Alliance of drawing in other players based on certain values values to do with upholding the needs and the rights of the most vulnerable in the poorest in society of upholding the needs and the rights of future generations and the whole concept of sustainability and of course of upholding the rule of law that the the rules that hold our societies together and but we needed the resources and those resources really focused around three key things for for if you include fishing but the first is energy you know this this idea that you need to recreate a whole new industry a whole new economy and that is based around diverse diversification of the economy and that's based around this idea that you've got to break the conflict economy that has been there for so long and really that is you know one of the very great challenges and it's not that it hasn't been tried you know the international community the world has invested 90 billion dollars in eastern Congo since since 2000 in trying to put an end to the war it's the biggest UN mission in the world and it's failed and the reason it's failed is because of the whole demobilization of the armed militias where we are there are between five and eight thousand of them it's not that much it shouldn't be insurmountable but the demobilization disarmament and reintegration process has failed because of the are in the acronym the reintegration and that has failed because there are no jobs in eastern Congo there's 70 80% unemployment and really the answer lies in the kinds of work that people like yourselves are doing of creating successful enterprise that can create sustainable livelihoods for those people and so we looked at those resources that can provide that and there's there's war the two untapped resources of Congo water and the human resources and you know what can we do with that to turn this economy around the others of course are agribusiness and tourism the traditional industry for a national park and we invested massively in that it's not perhaps not massively by by your standards but for us it was a lot you know we've we've now reached an investment you know committed funds of about ninety two million dollars and to try and get sustainable energy to these to these communities and what we discovered is that in doing that for every megawatt of electricity that you provide to conflict affected communities you can create between 800 and a thousand jobs and the research that we did in the early days demonstrated that we could create between a hundred and a hundred and twenty megawatts that's eighty to a hundred thousand jobs in the community around the park and we're well under we're not well on our way now the you know we've now got the committed funds for 50 megawatts we're halfway there but if you remember the figure five to eight thousand militias that's five to eight percent of those jobs that we're in the process of creating and so really that's that's the answer and it lies right at the heart of the kinds of work that that you are doing you know one one example is the soap factory and that we that has invested in eastern Congo because of the fact that there's electricity and because of the fact that the park is bringing a degree of stability to that region the soap factory has created four hundred jobs it's a five million dollar investment five million four hundred jobs in a conflict affected community but it's also increased the revenue for ten thousand farmers and it's in decrease the price of soap for five million Congolese consumers and so really that's that's the answer to conflict it's a much smaller investment than the ninety billion from the public sector and it really comes from the kinds of ideas that people like yourself are developing today so really that's why I came was just to to thank you for these amazing ideas and for this amazing work that you're doing thank you very much I knew you'd be glad you stayed but we're gonna let you go now so the next session started 11 I want to let you know there is another plenary this evening from 5 30 to 6 30 so please join us back here for that and next up we have a session that sort of continues the theme from the morning that'll start at 11 around impact investing sort of at this tipping point hitting the mainstream if you'd like to stick around thank you so much