 Hi guys, welcome back to my YouTube channel. This is Daniel Rosel here. Today we have a professional conversation for a change. This one about impact investing and I had the chance recently to meet Noga who's with me here today who's a really, really important player in the Israeli impact investing ecosystem. Before we get going with the conversation, I'm firstly just a disclaimer that I work in the office of Sir Ronald Cohen who is the founding father of impact investing in Israel and Ronnie and Noga know each other as well. So a bit about Noga, Noga is the CEO of Green Eye and the managing partner of Valued Square investing the responsible investment house. And we want to talk today a little bit about impact investing in Israel, where we are not just the vision for it, but where we actually are today in terms of real awareness in the market, in terms of actual financial instruments. In response to that sort of broad question, where are we with impact investing in Israel right now in well almost 2023? Okay, so first of all, thank you for having me. I think impact investing, if we look at it in the broad way, if we include ESG investments in it, it's in the beginning stage. I think we are 10 years back then lagging from Europe, but we are moving, we are moving and I think we can divide the impact space into two fields. I think if we look at the investors, institutional investors, they are really starting to integrate ESG and starting to see that it's real risks and that's why they integrate it. And from in the startup world, I think people are starting to speak about impact in the not in the private equities, but in startups and all those small investments and impact became also in Israel, a word that everyone speaks about. So the awareness for impact investment is there and tell us a little bit because you're obviously you manage an impact fund. Tell us a little bit about your fund and is it the only impact fund in Israel, at least of its size? So we are managing a family of funds. It's called value squared. It's part of the value squared investment response to investment house and we have funds, a global funds and North America funds and Israeli funds that we provide our investors an option to invest in the public equity world. That's that's a unique part and we are bringing impact into that part of the investments. What we mean by impact, we are come our funds have an integration of ESG. We are taking only companies that are above average on our high in their ESG. But also we are looking for those companies that have SDGs. SDGs sustainable development goals. I'm sure you spoke about it. The whole idea of looking at which companies are potential have already looking at their potential and are creating products and services that are aligned with SDGs with sustainable development goals. So we our company that we invest in or the stock we invest in our first they have ESG second SDGs and the third pillar is financial. So we are looking the third part is that we're looking on those companies that we think will bring returns. So it's not just that it's the combination it's the integration between ESG impact and and financial and that's why when we invest we see that we can measure our impact in our funds. We see that our funds are have a quarter of the carbon footprint of other financial products. We have more in general we have more revenue from SDGs. We have better scores in ESG so we can measure how good our impact is in our value squared funds. I presume you talk with a lot of Israeli companies. The UN SDGs how much do you think you know this whole they are and on the radar of Israeli companies especially do you see a difference maybe between obviously Israel has a crazy startup ecosystem and if less big companies are they on the radar and you know is it something you see all companies having a commitment to certain UN SDGs or is it sort of not really only the more sustainable ones are really sort of thinking about that. So I think in terms of companies I think is as you said we need to divide it. The big companies some of them are very aware and are starting to build their portfolio their impact portfolio their SDGs products and services that they are building and they're structuring but in the majority of the companies if we would ask them what's SDGs I'm not sure if they'll know and then we have the small company some of them are also by the way traded but they started it as startups and then they became public and they are more aware and that's some of them that's their main that's their main flag so we see them but then the problem is that some of those companies don't have ESG so you can see companies that are have the idea is brilliant they are proactive in what they are developing and they're really helping to bring the SDGs into Israel but in terms of management in terms of their corporate governance they're still they're still back and still behind so it's a combination that is sometimes problematic. If you took a company like you mentioned a small Israeli company let's say like a Wix or you know some of the Israeli companies that IPO'd last year do you think it's something that if you know the next Wix or Payoneer or whatever the case may be looking to expand into the US that would be kind of the time where they really have a thought to okay we need to sort of actually you know really have maybe a chief sustainability officer or you know put out voluntary disclosure that's kind of the pivot point for that you do you think that's fair to say? I think first of all yes I think foreign investors always bring the news to Israel so I think it will be something that will make them move I think their awareness is getting better they are getting more becoming more aware I think till now some of them thought that even if they went public two years ago they could just ignore that part of development and we'll do it later and I think once now that the institutional investors are looking at it they understand that they need to catch up and start moving and start managing it it's not that they're not disclosing they're just not managing it they are used to be some of them I'm not saying I'm not I'm trying not to generalize but they are used to be friends bring a friend and then it looks like the management it is not diverse and the way they measure things they is not systematic so it's all those things that I think foreign investments will definitely push them there I think even then it will be I think even the Israeli market itself will push them there something I thought Serrani said at the World Zionist Organization Conference in Basel was this idea of turning startup nation into impact nation Israel leveraging its small size to not just become another you know country with impact but actually sort of a leader but you're saying if Israel is 10 years behind do you see it actually being able to sort of make that jump to actually becoming a leading force in the impact movement I think yes because in the in terms of startups we are we are in the front line and I think the Israeli characteristic of being an initiator and entrepreneurs I think will help us go very will go and jump this part so I think we can be an impact nation as Serrani said and I think it's one of the main things that were very interesting in Basel I also was there is that when they spoke Zionism they spoke impact and that's the next Zionism if we want to be the Zionism 21 is impact is where we bring industry to make to make a better world so I think it's definitely something that we can catch up and I think in terms of investments and in terms of startups we can definitely be there I think there's an amazing parallel that I think Ronnie talks about between tikkun olam and the sort of Jewish mission of up until now maybe Israel has been focused on just you know getting by and from a security standpoint also you know becoming a tech powerhouse but that the next sort of evolution in that movement is actually thinking in a much more international global scale of how we can benefit so I want to talk a little bit about the knowledge of impact you're obviously a financial professional both looking at sort of the general public day to day uh something that sort of I've noticed is you know simply setting up a pension fund myself very very small level of scale for okay do you guys have an ESG track the kind of response that I got back personally was why why would you want that or what's ESG or what's impact the kind of skepticism combined with maybe like a lack of knowledge so do you think that's something widespread and in terms of the general public do you see a changing I think the general public are not aware yet that their money when they're not looking is doing something is impacting in its own way so we are speaking about impact always and we think of the being proactive but what we are saying here is that even if you are not proactive you are impacting you are impacting in a negative way but you are impacting so I think that's our first stage that to explain to people that when you're not involved and you're not choosing you are choosing so that's something that is starting to people for people to be aware of and I think it's there is for example a phone case of Naki fossil fuel a movement that is trying to push company to push investor investments to take it to do to take out a fossil from their from their portfolio but I think what we are trying to explain to them that it's not there it's not only there that's a good way of explaining it because it's been our like it's all fossil fuel or not but I think more and more people have to understand that those company you can you can invest in those companies that are doing good that are have a diverse employment team and they have more they are looking at they are looking better and on the workers and we can see that that's where we impact so if we speak about the general public I think we have a long way to explain to them but once we're asked we'll manage to explain to them why they should care I think they will start asking for it and now let's go to the institutional investors for many many years I'm in the field and I knocked on the doors of so many of them and I met them throughout those years and it was they were reluctant to moving and they and they're not bad people they just you know they're when they're so busy that's the last thing they could do that last thing that they will think of in volunteering but then came the regulator almost a year and a half ago and said to them people it's not for you to decide you need to start looking at those issues and once the regulates said that we see a very interesting move in most of the institutional investors and they are starting to integrate and GreenEye is now providing a database on 600 companies on for a lot of the for many of those institutional investors and they're using it it's a database of Israeli what's in your database it's an ESG database on the Israeli companies and it's a database that didn't exist before because if you look at the international indices ESG indices and ESG databases Israel didn't interest them most of the 600 didn't were in cover the most that in one of the database it was like 50 or 100 so they never really had something to look at those companies so now they do have and they're integrating is it post-public and private companies that you guys look at we look only on the public because that 600 are being traded in the Tel Aviv stock market but what's interesting to see is that it's the evolution like we're not asking and I think people that are asking it's not feasible we're not asking them to move 180 degrees we need them to move very responsible responsibly and move slowly in order to get there because we need to remember that the institutional investors are managing a lot of money and we are that's why I'm I'm more interested of of real changes on the way they work and starting to integrate it in the real day-to-day work then really big announcements that then they find out that it's more difficult to go and to implement so it sounds like you're saying that the kind of understanding of impact at the moment in Israel is a lot like kind of socially responsible investing that you know these are the exclusion criteria we don't invest in fossil fuels I'm trying to move that forward to you know the actual idea of you can do positive things with your with your with your capital I think in terms of institutional investors they are not looking and excluding because in the Israeli market they can't really exclude it's a very small market and it's they have a lot of money to invest and they don't really want to exclude and I understand what we want to do is we we want to first look at the positive part and we want to use another thing that is called engagement because one of the main things that we can see from the world that engagements of investment engagement processes of investors in companies could make a whole difference so I think the only day-to-day engagement that your average Israeli worker a high-tech worker or someone like me you know a personal pension fund has with this whole world is through their own pension right and you don't as you say you don't really think about it you typically in Israel for those watching from other countries your company has a pension agent you take a few boxes usually you sign your name like 20 times on some paperwork and that's it you have your pension set up but no one really looks into it further so something I mentioned earlier that I was looking for an ESG track from the major Israeli pension houses and I read that there was some kind of regulation coming in that as you said it you know not putting that option in the hands of the pension companies that the actual regulator would mandate that these pension houses would have a ESG or sustainable investment or impact track so where exactly is that regulation is it implemented or what happened so in terms of regulation they won't mandate it but they will allow it and that's the move because till now according to the regulation you weren't allowed to call a pension fund an ESG as a track so now that's first a first move from the regulator saying that you are allowed it's it will be starting in 2023 we're not sure if it's January or June but it's the beginning they're starting it should start then but what's important is that now the institutional investors will be able to offer us pension funds in different tracks that if it's a pension it has to have SDGs that's part of the regulation but if it's not a if it's a different part of long-term investments you can also have ESG pension funds so it will start allowing pension funds and institutional investors to give an option of that to the general public and I think that will also help educate because most of the money of the public is through the pension funds and until today the companies investment companies couldn't offer pension funds so now it is going to be on the table so I hope people will understand that it's an option and if they'll do good in terms of financially I'm sure people will move there right because then I guess a processor word of mouse spreads once it's an option and people are happy with their returns and maybe their pension advisor so besides that kind of typical day-to-day world the smaller world of maybe family offices just curious because there's a lot of discussion around the world now that family offices and philanthropy organizations are getting involved in this is that it is that something that exists in Israel and do you see they're also moving towards this yeah I think there are I think we can see family offices that are when they're allocating the money they could see more impact investors in investments in the public world and in the private private investments also so I see I see this kind of investment I think in so in many ways those smaller come smaller financial organizations are it's easier for them because in impact investments and in impact investing you usually don't need a lot of money and one of the things that are problematic in the institutional investors is that every investment is quite big so if it's a different scale it's a problem for them to invest but that's another thing that is is we are creating the market so there will be funds of public of impact companies and it will be funds of funds it's things that are building now and we see more and more of that and we see also an organization called ifi ifie that is helping this ecosystem too that's the Israeli Israeli forum for the impact economy which is the I'm saying this again for context because it is really something I think a very very justifiable criticism of the impact movement generally is what's you know alphabet soup right and something I've heard people saying is that it's actually getting worse over time as as this goes on and it catches on so the GSG is advocating for global impact investment globally it works on the ground through national advisory boards nabs and the Israeli national advisory board who I want to give a shout out to because Vanessa who who runs it does tremendous work is the ifie exactly and I think the fact that this organization exists means that the ecosystem is stop moving because I think that's one of the way we build it we build a cooperation between different parts of the ecosystem and I think that tool will make it different looking towards the future where do you see impact investing going in Israel 2023 is in what like 10 days from now so we're almost in the new calendar year this change in regulation is going to open up the hopefully the discourse of impact among the general public what else do you see happening in impact investing in Israel in this coming calendar year I think it's going to be more and more mainstream I don't know if it will be 2023 I think it's it's a longer process but I think that we'll find more and more companies showing off with their SDGs and where they are impact their impact part that's one thing I think I hope that they'll start measuring more so they'll speak about it more as a measure a measured issue so I think that will be another thing and I think that because of what we see in the pension funds and because of the other things I see that we are seeing more I think that the general public will once will be more aware and they'll have more options of investment so it's going there I think we'll always have to be cautious of greenwashing because when you know when it's starting everyone is when it's when we see a trend at the beginning you see only bits and pieces that are professional people that are all dedicated for that but when it becomes mainstream everyone wants to do it and that's why we need to be cautious from greenwashing not in the sense that people are doing only some of it they will I'm sure that we'll find people also doing things that are they could get away with not doing the real thing but what I'm sure of is that people will become more and more aware so it won't work it won't work for the long term and one you know looking at the future I guess one way of thinking about that is organizing these conferences so you recently attended COP 27 in Sharma Shaikh in Egypt what did you think about that what did you make in terms of the what was discussed there and it's sort of do you think it was uh it's going to move the movement in a good direction um Sharma was my third COP it's uh the climate change yearly conference I've been to Denmark into COP to Copenhagen in 2009 and last year in Glasgow and this year in Sharma if they look at the what happened in Glasgow compared to Sharma Sharma was a disappointment was a disappointment I think in many ways first of all what we what we came out of what came out of Sharma is it is quite a disappointing thing they didn't decide on to keep 1.5 degrees decision to keep that as a target they didn't they didn't cancel it but they didn't speak about trying to understand how we get there um the fossil fuel issue wasn't was discussed but at the end they left it as it is phasing out in a very very way one good thing that happened is that the loss and damages fund that is not is a nice thing but it's it's not it's still far from being implemented it will be implemented this year it's just becoming they are going to build a committee and and and also we need to be aware that the word of loss and damages fund is a bit misleading because it's not really we are not going to compensate them for what we what we what we the developed world did for or did to them but we are going to help them if they have if they have problems while they have like a after hurricanes and stuff like like that they'll have some money to repair so I think it's people look at it as a very big achievement because Americans and America and the EU didn't like didn't want to do it you're saying it's it's ignoring the price the developing world is already paying for the huge amount of emissions contributed way way disproportionately by well the US but also other parts of the developed worlds yeah the whole it's like we we know that the developing world is paying for what the developed world did and it's not this fund is not going to compensate it it's just going to help them deal with a disaster deal with the disaster that is nice but but why do I think it was it was disappointing because I and I think we would know it from the beginning first of all it came after Ukraine they were in Ukraine and the problem of of energy and the price rise of energy of oil and that means that it was very profitable to invest in oil that was the beginning part that's how it started so it wasn't a good start but I think another problem is that I found that was a not not helping if we can say the least is that the Egyptian from the beginning said that they're not they won't allow demonstrations so all the idea of civil society and bringing the issue of urgency didn't exist there right because I think for COP26 that actually made much more headlines than the conference itself was the sheer amount of protests I know like you know almost almost attempting to bring the conference to a halt didn't happen but and you know just looking at 20 a COP 27 that wasn't seen yeah Glasgow spoke climate change it's it spoke urgency if there was in Sun on Sunday there was the big big rally of climate change there it was like 100 of thousands of people rallied on the streets about speaking about climate change and I think the leaders felt it because and then they didn't have the option of not getting into a deal here it was the demonstrations were plastic like they were five people standing in the conference room so it wasn't really and you didn't hear it you didn't feel the urgency so why bother you need to we need to remember leaders they need to make an effort to make it happen they need to see it in their face they need to be hackles eggs thrown at them they need to be pushed they need to understand that if they don't do it they won't get away with it and in in Shanghai we did it wasn't it wasn't there you think that that accountability from the general public it was a missed missed opportunity I yeah I think it it if you'll ask the leaders I don't know if they'll say that's why we didn't do decided but I think there was this idea of we will get away with not deciding allow it to happen but and there's not that long to go until 2030 yeah but the next uh first of all yes we need to start moving I think we just spoke here we just spoke about climate change but I think what we see is that in many many ways through climate change we see so many other problems that we have to deal with and we need to rush and that's why going back to impact investing in responsible investment is so important because that's where money is that's what we'll decide how the economy will move and where will it move to it's the world the world doesn't have time for a bad cop or for a less than ideal cop one thing that is uh did happen in the cop and we we saw a couple of achievements not in the not in the big decisions but in small decisions like first of all the financial financial institution in the world understand that they need to go net zero for 2050 with moving from now so that's one move that we saw in Glasgow and continue now but also as we saw some government things for example the american government decided supply chain will have to go to be all their supply all their big supply chain suppliers meaning 85% I think from their suppliers will have to disclose their climate change their climate change of achievement so it it will start moving there was this I think that compared to the disappointment in the in the high in the decisions part I think we see a lot of movements in the local part local areas and in terms of the big blocks we're obviously also seeing the sec proposal still out there in the EU actually moving quicker to implement it so thank you Nogra firstly for all the insights you shared if people want to follow more about your takes on all matters impact investing where would be the best place I think first of all I'll be happy to join for them to join in LinkedIn but I think www.value2.co.ir is our fund is our investment house website so it could be interesting and we have a lot of things there happening and also the Israeli forum for the impact economy who I mentioned they have a website as well and that's sort of a key bridge builder between all the different parts of the Israeli impact ecosystem so thank you Nogra for your time I really appreciate it hope that was interesting if you are an Israeli if you simply work in Israel and you have a pension even if you're an Atsma'i you now have to have a pension there's no getting it at having a pension as Noga said if your money if you don't know what your money is doing there's no such thing as money just doing nothing it's doing something and keep your eye on developments in 2023 and keep pushing your pension funds for more impact and more ESG because the the the squeaky wheel gets gets oil first right is that how you say it yeah I think every money you invest has to be responsible it could be your five if it's a five shekels or it's your pension funds all of it find out what it does thank you Noga thank you