It was during the Houssian Foundation’s recent process of formalizing their investment policy statement that a board member offered a challenge; ‘how can we be more progressive, more nimble and more agile than a traditional investing strategy’? These questions provoked the Foundation to reflect on their role within the impact investing ecosystem and ultimately led to a decision to seek out an investment portfolio fully mission-aligned across all asset classes.
For Jamie Houssian, Principal at Elemental Energy and Director of the Houssian Foundation’s Board of Directors, it’s also about recognizing that this is a very unique time in history and in humanity’s interaction with the natural world – the environment. “We realize that we’re in the midst of an environmental crisis” he explains, “and that we have capabilities at the philanthropic and business level to try and assist in the collective movement towards halting damage to the climate”.
Why climate action and the environment?
Jamie, as the Principal of Elemental Energy, is no stranger to renewable energy and clean energy. Elemental Energy is a renewable energy development company with interests in operating and developing wind, solar, and hydro projects throughout North America.
Naturally, Jamie’s expertise in this space has influenced his investments in climate action and the environment, including the Foundation’s investment in Deetken Impact Sustainable Energy’s Caribbean Basin Sustainable Energy Fund (CABEF), which focuses on investing in sustainable energy infrastructure in Central America and the Caribbean.
“The CABEF fund is one more avenue of exposure to renewable energy and an industry that we believe in, know about and have built some expertise”, says Jamie. “We understand the amount of local work required on these projects. Whether it’s interacting with Indigenous communities or working with landowners, permitting agencies or local governments, we appreciate the extent of ‘boots on the ground’ work required for these projects to be successful. So going beyond North America, we wanted to have exposure to new international markets without necessarily requiring our own internal team”.
The Houssian Foundation’s CIO, Ingrid Leong adds, “it became very apparent in our early conversations with Deetken, the strength of their relationships and their networks in Latin America and the Caribbean, and our ability to access those networks and expertise, through participation in CABEF.”
Guidance for other family offices
Ingrid Leong draws from her experience over the last year to share her guidance on aligning philanthropic and investment goals with impact investing. Her first piece of advice is to encourage others to create a draft investment framework and start executing on that strategy but to remain open to revising your policy, as being too narrowly focused can unnecessarily restrict investment opportunities.
Ingrid also found it particularly helpful to build a network through other family offices and similar organizations. “There’s a lot of knowledge that can be shared within this group,” she says, “including learnings people may be willing to share from their own implementation journey”. Her third recommendation is to invest in the learning around the space by seeking out experts and building resources internally. For the Foundation, this took the form on an investment committee, tasked with evaluating how they shortlist, identify opportunities and conduct due diligence.
A rising trend
Jamie believes the increasing allocation to impact investing by family offices and foundations was inevitable – which is great. “We’re at a time where the alignment of doing good and acting as responsible citizens just makes sense. For me, one of the appeals of renewables is you can make money long term into the future while helping reduce carbon emissions and change the system”.
Ingrid also shares Jamie’s optimism about the rising trend in impact investing by family offices adding that there is a role the investment community needs to play in terms of how they are allocating capital and the questions being asked of portfolio advisors and companies they are invested in. She thinks that collectively, family offices are aware of the role they may play in allocating capital to generate specific social and environmental benefits.
“It’s about time that people start exploring new portfolios and (it’s a bit cliche but) aligning their wallets with their values”, Jamie says. “I mean, I don’t want to wake up in the morning and look at my stock portfolio and realize we’ve made a bunch of money because some companies sold a bunch of cigarettes and weapons around the world – it just doesn’t feel good”.