“You want to be doing a few things right rather than a lot of things superficially.” — Christy Pham, Senior Principal, British Columbia Investment Management Co.
In the Building Bridges Webinar, co-hosted by Goal 17 Partners, The Fletcher School at Tufts University, and K&L Gates on December 11th, members of the infrastructure investment community sat down virtually to comment on the shifting landscape of integrating societal risks into their investment processes.
Thomas Holt, Partner at K&L Gates opened the session by welcoming the attendees and speakers. The panelists included James Andrus, Investment Manager, CalPERS Investment Office, Rhianydd Griffith, Vice President, Hermes Infrastructure, Jim Pass, Global Head of Project Finance, Guggenheim Investments, Christy Pham, Senior Principal, British Columbia Investment Management Co., and Patrick Schena, Adj. Assistant Professor of International Business at The Fletcher School, Tufts University as the moderator.
The overall message of the conversation was that investments cannot solely be based on financial returns anymore and we must modify expectations to include non-financial returns in the equation.
“During a project, it is important to engage the community around the values they represent… We need to value the risks and the social impact, and it must be an integrated process” — James Andrus, Investment Manager, CalPERS Investment Office
The panelists discussed how the mitigation of societal risks can drive additional value to the projects. James Andrus said that CalPERS Investment Office “earns a larger return when social impact is considered”. However, it is also important to note that sometimes the strategies to mitigate risk can also create unforeseen costs. Christy Pham noted that “thinking proactively and getting ahead “of these potential risks can propel projects forward.
Jim Pass shared key findings from a report done in partnership with The Fletcher School, Tufts University, which set out to understand the dynamic of integrating social risks into the infrastructure investment process.
The speakers unanimously commented on the importance of incorporating consistent reporting metrics to monitor and measure projects across the board. What is not measured cannot be managed. James Andrus discussed this priority as a way to “ensure companies they invest in actually do what they say they are going to do”. The challenge now becomes how the infrastructure investment community can best measure and quantify these metrics.
As an example of how the community could potentially move forward with measurements, Rhianydd Griffith discussed the quantifiable opportunities Hermes Infrastructure has found. She noted that an increase in diversity in the management team quantifiably increases the customer service scores. Additionally, Hermes has found that reduced sexist language in hiring materials increases female applicants by a quantifiable factor, which leads to a larger applicant pool and ultimately a more robust staff.
This conversation provided promising insights into the current and future state of infrastructure investments and the priority to integrate social risks promoting a sustainable future for all stakeholders. We look forward to future conversations and continued progress and collaboration.
Watch the event recording here.