It’s Spring and we feel more than ever motivated to contribute to initiatives aimed at aligning private wealth and financial markets to our society’s sustainable development goals! On top of what we can contribute through our consulting work, we therefore engage in collaborative initiatives and fora aimed at innovating, growing and mainstreaming sustainable approaches. New engagements include the active role of Ivo Knoepfel in the Advisory Board of the Center for Sustainable Finance and Private Wealth at the University of Zürich and his role as speaker and moderator at this year’s pymwymic Impact Days, a gathering of leading European wealthholders engaged in investing for positive impact. Ivo Knoepfel has also recently become a trustee of the PeaceNexus Foundation , whose aim it is to strengthen organisations committed to preventing conflict and building peace, and continues to act as an advisor to WWF Switzerland in relation to their benchmarking of Swiss pension funds’ responsible investment commitments.
Investing in sectors and companies with a high impact on the global climate is “dangerous for your portfolio’s health”, if we express it in similar terms as health warnings on cigarette packs. It is not only governments’ policies aimed at maintaining global warming within the 2°C mark, but also the rise of the shared economy, on-demand transportation and the new price competitiveness of renewable energies that will lead to tectonic shifts in the power, automobile, oil and other sectors. onValues helps clients align their wealth to the challenges ahead by focusing on investments that are part of the solution and not part of the climate change problem. We believe that it is not enough to avoid high-risk companies and to lower the portfolio’s carbon footprint (current emissions of portfolio companies). The main focus should be on investing in winning companies providing break-through products and services needed for a low-carbon future. Long-term investors will be able to generate superior financial returns and contribute to a better world.
On behalf of our clients, onValues has recently assessed the role of gold as part of a long-term investment strategy. Results of our analysis using price data for the last 20 years indicate that gold (measured in US-Dollars) did not outperform other ‘safe haven’ assets such as high quality government bonds in periods of pronounced stock market volatility. For non-US investors a volatile and generally weakening US-Dollar introduced exchange rate risks, frequently wiping out the occasional gains of gold holdings. We therefore cannot validate the common belief that gold is a good portfolio insurance based on recent history – especially for European investors. Moreover, the environmental and social impact of the gold industry needs to be taken into account. In extreme crisis situations, such as a global war or the collapse of global financial systems, gold could play a role as a store of value. For clients attaching a high likelihood to such events it could make sense to hold significant amounts of gold, but this would require a well thought through implementation plan, factoring in choices like physical denomination (coins, bars, jewellery), storage location (bank, external storage, at home) and security aspects when accessing and using the gold during crisis times.
Toniic Institute, the global action community for impact investors, has recently released “T100: Insights from the Frontier of Impact Investing”, a study showing aggregated data from 51 high net worth individuals, foundations, and family offices (including onValues clients). The data analyzed reveals that 100% values alignment can be achieved today in the portfolios of different types of investors, including those seeking market-rate returns. As part of the T100 project, Toniic also announced the launch of the Toniic Diirectory, a publicly accessible, peer-sourced catalogue of more than 1’000 impact investments made by its members, upon which the T100 findings are based. The directory is searchable by impact categories, impact themes, asset classes, management structure, liquidity profile, and impact geography.
Toniic also recently launched “T100: Insights from Impact Advisors and Consultants 2017” which shows the global landscape of dedicated impact investment consultants and advisors. 37 organisations from 12 countries, who work for 38 of Toniic’s members, open the door to their impact practices to demystify, inspire and activate both investors and the financial services industry. “What we see is a dedicated, articulate, optimistic, innovative, and definitely persistent group of entrepreneurial founders as well as large company intrapreneurs,” said Lisa Kleissner, co-founder of Toniic and its 100% Impact Network. “Beyond fulfilling their clients’ impact needs, they are building new impact products and services, and volunteering their time to strengthen and grow the impact ecosystem. All of them, while cognizant of the challenges, are optimistic there are solutions and a bright future for impact.”