Staying True to Your Investing Values When Markets Are Volatile

Sustainable investors Carol Newell and Annabelle White offer insights into finding – and staying – on an impactful wealth management path

ESG investors may find themselves grappling with their values-led strategies as markets – and particularly sustainable portfolios – experience a downturn.

It’s one thing to align your values and your investments when the markets are good. But how do values-led investors balance returns with impact when turbulence in the markets may leave you with a strong urge to make emotional investing decisions

Carol Newell of Renewal Partners and Annabelle White of Dragonfly Ventures have taken unique values-led approaches to sustainable investing. Here they share how they got their start and what keeps them going – even when markets fluctuate.

Knowing Your Why

Sustainable investing has been the long game for Newell since a large inheritance left her with more money than she admits she needed. As one of Genus’ original fossil-free investment clients, Newell has championed sustainable investing for more than 30 years. “I knew I needed to get my assets actively working on behalf of a mission – to create a sustainable environment and social change for the benefit of all,” she says. “The point for me was to get the assets out the door and invest them in businesses that I was hoping could be part of the solution instead of part of the problem.”

White also inherited a significant chunk of wealth at a young age, and knew she wanted to invest differently. She met Newell at a Play Big wealth management conference, and honed in on the connection between sustainable investing and her interest in the outdoors. “I needed to get involved in managing my own finances,” she says. “I felt that responsibility, but I didn’t know where to start.”

White worked with a coach and tax advisor who were able to guide her toward establishing pillars of interest through which to focus her investments: toxic chemical elimination, climate resilience, freshwater conservation, and land and soil health. “Within that, it’s not just investing for profit, but also investing on the charitable side in people who are super smart and driven, with lots of ideas,” she says. 

Acknowledging Your Circumstances

For both Newell and White, making a profit was never the primary objective of their investment strategies, but balancing a return on investment with goal achievement has always been an essential driver of the ability to do good in the world. 

For many people, including impact investors, profits are crucial, as they make funding positive impact companies and projects possible over the long term. Profit may also be critical for other goals – retirement, raising a family, etc. “There is a continuum of life circumstances,” Newell says. “When you first start out, you may need to prove yourself with investing by driving investments that will support solutions in the world. Or maybe you get married and have kids, which leads to a whole different set of circumstances and creates different kinds of needs. It’s important to acknowledge that.” 

Newell’s personal circumstances allowed her to focus on climate change – “the biggest issue in our lifetime” by way of her charitable foundation, private seed-capital investment company and social purpose real estate company. “We may feel like we’re saving our fortune for the grandkids,” she says. “But if we don’t stay on purpose with tackling climate change, they will lose the game. Money is fuel,” she adds. “What do we want to consciously fuel?”

White’s approach to impact investing was different. “We’re not providing professional services,” she says. “I felt like I could implement a lot more personal screens. For example, with an aging infrastructure and highly dangerous waste, I’m not a fan of nuclear power. Genus has helped me screen out oil and oil-supporting businesses, and has applied other personal screens as well. They’ve been amazing and I’m grateful for that.”

White also actively invests in entrepreneurs and charitable organizations that pique her interest. “One investment I’m excited about is Ananda Devices,” she says. “The founder is an entrepreneur and neuroscientist from Brazil. She’s able to pull out neurological tissue from human blood and grow it in a petri dish. Then it can be used for drug testing. She’s not only crushing it as a highly respected neuroscientist, she’s also an incredibly brilliant business woman.” 

On the charitable side, White has helped to fund a community centre in Clyde River, Nunavut. “Twenty-five years ago, three local women recognized the need to create their own healing practices and community programming under their management and language,” White says. “This community centre is now running 100 programs per year.” White believes in supporting communities directly with unrestricted funding, which allows organizations much greater freedom in self-direction.

Adapting Your Expectations

Markets rise and fall, and so do investment returns, but for decades capitalist principles have dictated that investors must strive for maximum returns at all costs – which isn’t always possible with impact investing. Newell believes this needs to change. 

“Companies used to be about creating a great product or something of service,” she says. “What’s been normalized now is to invest in business and get out in a big exit, and this changes things. We’re all looking for a windfall as opposed to dividends. It’s a new normal of expecting too much.”

“But how much is enough?” she continues. “If you have more than enough, my suggestion is to stay true to your values or we end up being in a situation where the markets are supposed to constantly grow – and they don’t. When we’re trying to control economics, we feel as though we’ve lost the game if we have a setback. To me, we lose if we stop doing values-led investing. We need to not be distracted and not lose heart.” 

Newell recommends working closely with an investment advisor, such as a Genus portfolio manager, who can help you to accomplish your goals – and who understands that profits should not come at all costs. “If you’re able and willing to forgo the quest for maximum return possible on investments, it’s important to give your financial advisors explicit direction, because they are legally obliged to deliver the best rate. We have to let them off the hook or we will forever be caught in a circle of overshooting the capacity of nature to maintain its balance. It’s incumbent on us, as investors, to modify our expectations.”

To help new sustainable investors get started on a path that’s right for them, Newell has created a toolkit called Reweaving Wealth. It’s a deck of cards that facilitates the exploration of various options to connect, energize and mobilize on issues of importance. “It lets you look at issues and strategies to discern how bold you want to be – and how much you might want to risk given the risk of not doing anything,” she says. “It gets us thinking about values and our money.”

Looking to explore a values-led investment strategy that aligns with your priorities? Contact a Genus advisor


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