As I previously shared, a lack of standardization exists within the Values-Aligned Investing space. So, we charged our own path and created a proprietary investment framework. The first strategic decision we encountered was whether to take a “lens” or “sleeve” approach when implementing this new investment strategy. A lens approach applies the investment strategy to the entire portfolio; whereas, a sleeve approach carves out a piece of the portfolio and applies the investment strategy solely to that piece, while leaving the balance of the portfolio unaffected. We opted for the sleeve method in order to test this new approach on a piece of the pie to ensure it is a strategic fit for the foundation. This approach is not set in stone and will surely evolve over time alongside the ever-changing investment industry.

Next, we devised a proprietary investment framework. We started by selecting the term “Values-Aligned Investments” (“VAI”) as the overarching header for the newly designated investment sleeve. We chose this terminology because it encompasses any investment that aligns with the values of the foundation. This phrasing is sufficiently descriptive while also affording us the flexibility to incorporate a range of investing styles, which we describe as investment subcategories under the VAI header. All VAI subcategories have one primary feature in common in that that they seek both a financial return and non-financial return. A financial return is a return on investment in the conventional sense. For example, a company’s stock price increases from $10 to $12, thus generating a financial return of 20%. A non-financial return is not as easily measured and can take various forms, including social, environmental, impact, etc. For instance, a company generated 16.7 TWh of renewable energy (wind, hydroelectric and solar), thus avoiding 11.8 million metric tons of CO2 emissions, and ultimately avoiding 0.03% of annual global CO2 emissions (i.e. the environmental return).

More to come on the foundation’s specific VAI subcategories in subsequent blog posts…


Brittany Priester

Brittany Priester

Portfolio Manager