Helping investors put their money where their passion is

Global Business

When you invest in a fund, do you actually know what companies you’re investing in? For a lot of people, the answer is no, and they might not know much about the ethical practices of the companies either. A San Francisco company is looking to change that by making an impact.

CGTN’s Mark Niu reports.

Nearly every day Eva Holman is helping to clean up a beach. We watch as she picks up plastic and other garbage strewn in the sand.

“And of course the ever prevalent cigarette butt,” Holman said. “These are plastic and they capture all the toxins in them. One of these can kill a fish.”

Eva also holds monthly beach cleanups for the Surfrider Foundation and leads its “Rise Above Plastics” program, which helped San Francisco pass a ban on plastic straws.

Her chapter is made up of volunteers, which is why she’s excited to have struck a deal for a direct donation from an investment company.

“Bringing in a corporate partner is always a difficult process because you have to vet them,” said Holman. “Are they supporting the community, the environment and working with a company or a corporation who has the same goals in mind? It’s hard to come by.”

That partner is a startup called Newday, which is taking an approach known as impact investing.

“The big issue is people don’t know what’s in their portfolio,” Alex Meek, President of Newday said. “They’re making value-based decisions everyday with their purchasing, how they are using resources, recycling, that hasn’t translated yet to a very powerful way to reflect your values. And that’s where you are putting your money.”

Newday currently offers six portfolios – Global Health, Ocean Health, Climate Action, Animal Welfare, Fresh Water, Gender Equality. Each is made up of companies that Newday’s research shows are benefiting those causes. They are paired with an NGO that receives a donation from them.

“Our whole thesis is that companies that have these higher reporting metrics around environment, social and governance actually have out-performance characteristics relative to their peers,” said Meek. “And that data has proven back, looking back historically.”

Since Newday launched, five out of its six portfolios have outperformed the overall market.

“What we are looking for is more of those external factors that aren’t readily identifiable on a company’s balance sheet or financial statement,” Doug Heske, Co-Founder & CEO of Newday said. “Things like, how are they making investments back into their customers, their employees, their communities, into the environment that builds long-term value.”

Newday is also taking the idea further by planning to launch a banking service that partners with a bank that puts its deposits into affordable housing development projects.

The idea is that from start to finish, the money customers save and spend should not only earn financial returns, but social returns too.