It wasn’t long after the start of the 2008 financial crisis that I was in a boardroom and our CEO asked me, “How is this going to impact investors going forward?” At the time, I remember thinking, who knows what the lasting impact will be? And now again we are faced with a similar question – only this time it is not just isolated to investors, but more importantly, how it impacts humans going forward.
The global financial crisis was just that – a crisis that started in the sub-prime lending market that then bled into other parts of the economy. Faulty assumptions, governance, and risk-taking all fed into the global financial crisis with an overarching questioning and distrust for Wall Street and its perceived focus on profits to the point of greed. Today’s COVID-19 crisis is almost opposite of 2008. It is first and foremost a human health crisis, which in turn has become a major economic crisis. With this in mind, how do you think this will impact people going forward?
This is a much deeper question today than just isolating it to our financial health. Sure, for those of us with time and an iron clad stomach, it very well could be an amazing buying opportunity. But if that’s where we stop, we are missing the much bigger picture. Whether we agree or disagree with governments who put in quarantine measures that have halted the world economy, it was done with the intentions to ultimately save lives and value people over finance. What a departure from the 2008 crisis. And in fact, what you are seeing is public-private partnerships and collaborations trying to solve this issue. Commercials on TV now focus on social distancing and offering hope as we try to get back to normal. We are in a battle together as human beings.
So, today as CEO of CommonGood, I now ask myself, “How will this impact human beings going forward?” Here are my humble thoughts: First, we are faced with our own vulnerabilities as we continually see increased examples of human need and death. Second, we are watching, anticipating, and experiencing the positive power of capital. Third, we all want to be a part of the solution. What’s unique about this crisis is that it’s forcing us to think as integrated human beings.
With this in mind, and as I try to tease out the financial implications, I’m finding it’s important to be sustainable, to take advantage of the investment recovery opportunities, and align one’s capital and values. Values alignment has traditionally been focused on charities and non-profits, but I believe this crisis will speed up and intensify the growing need to invest with your values as a key input, just like traditional keys like risk, goals, and time frame. Don’t miss the opportunity to reach your clients on a deeper level and integrate their values into the investment process. These are unprecedented times, and so too is this time for impact investing.