Five Questions about the Triple Bottom Line – People, Planet and Profit – Special Interview with Robert Rubinstein, Founder and CEO, TBLI Group™, Amsterdam, The Netherlands – April 1, 2013

On the first Monday of each month Emerging Markets ESG publishes a special interview with an academic, expert or practitioner about a specific topic with relevance to environmental, social and/or governance (ESG) issues.

This month’s interview, the 13th in the special interview series, is about the Triple Bottom Line – People, Planet and Profit, and is with Robert Rubinstein, Founder and CEO, TBLI GROUP™, Amsterdam, the Netherlands.

TBLI GROUP™ is an international knowledge broker, continuously building and expanding a global network for parties who share the same goals. It works to educate a new generation of managers and investors aware of the concept of TBLI, or Triple Bottom Line — investing in “people, planet, and profit” — and its close relative, ESG, or “Environmental, Social and Governance” issues.  The concept behind this company is the introduction of TBLI – Triple Bottom Line Investing. From its early days, the aim of this small company was and is unabashedly global: It seeks nothing less than to re-educate the financial world.  TBLI is a concept that Rubinstein pioneered since 1999, which puts forward the notion that a truly sound investment is one that provides not just financial rewards, but social and environmental ones too. With success, since the concept has now become a household name in the financial world.  For the past twenty years, Rubinstein, the CEO of TBLI GROUP, has been instrumental in integrating ESG and TBLI into the culture and strategy of international corporate business and investment companies. He has taught courses in sustainable finance at the Rotterdam School of Management and currently delivers lectures at international Business Schools and universities, and provides TBLI consulting and training for investment firms, pension funds, hedge funds, and international businesses, through what is now TBLI CONSULTING™, a full daughter-company of TBLI GROUP.  A second daughter-company is TBLI CONFERENCE™, organizer of the largest comprehensive international networking and education opportunity on ESG and investing in the world, held 2 times a year. An inaugural event in the United States, TBLI CONFERENCE USA™ 2013, will take place on June 17-18, 2013 in New York City.

Emerging Markets ESG:  What is the Triple Bottom Line?

RobertRubinsteinRobert Rubenstein:  Triple Bottom Line is achieving a measured performance in all three elements of a company or investment; namely financial, social and environmental return.  Achieving a financial return is what most of the capitalist world has done over centuries – mine, produce, explore oil and gas, and produce retails goods in horrible conditions because there were no regulatory requirements, shareholder or stakeholder pressure, media attention, personnel values or societal expectations. That has significantly changed on all levels – media, regulation, societal expectation, and personnel requirements.  In addition, the calculations make more business sense. If a company has a great sustainable performance according to the triple bottom line (people, planet and profit), then it is a highly effective company with great governance, low resource and material use, and highly motivated staff who stay with the company a long time and are fully committed.  This means low turnover, low sick leave, etc.  All of this translates into high financial performance.

Emerging Markets ESG:  What distinguishes Triple Bottom Line Investing (TBLI) from mainstream investing?

Robert Rubenstein:  Until now, the focus of mainstream investing was to look only at financial returns and not at the social and environmental impact of the investment.  That is now changing as environmental, social and governance (ESG) issues are becoming risk factors for asset owners and managers.  This new thinking will influence all investment decisions, as pressure grows on companies and projects to clearly state and quantify the ESG part of the equation and not only the financial return.  Going forward, sustainability performance will be integrated in the way reporting is done and investment decisions are made.  Believe it or not!

Emerging Markets ESG:  Does the Triple Bottom Line require a paradigm shift?

Robert Rubenstein:  Yes.  Until now, everything within the system was against the institutionalization of ESG and impact investing:

  • Fiduciary responsibility – Asset owners and managers, particularly those involved in the pension fund industry, often say that they can’t do ESG because of fiduciary responsibility.  Freshfields wrote two reports proving that there is no legal obstruction preventing pension funds from embracing sustainability.  In fact, the Freshfields reports state that not looking at climate risk means that pension funds are not fulfilling their fiduciary responsibility.
  • Incentives – Little incentives are given to financial professionals to embrace extra-financial assessment.
  • Media – Media gave little attention to the trillions pouring into ESG and impact investing:  $4.1 trillion in green investments from 2007-2012, according to the Green Transition Scorecard; Euro 6.1 trillion in ESG in Europe in 2012, according to Eurosif.
  • Policy – Products and services didn’t reflect their true cost.
  • Universities – Courses on sustainable finance are still few and far between.
  • Wealth Managers – Wealth managers are not informing their clients about ESG and impact investing.  This group follows, but does not lead.

In spite of everything being against the growth of ESG and impact investing, they continue to grow.  A paradigm shift will happen when they get a boost.

Emerging Markets ESG:  From your long experience in organizing and conducting the TBLI Conferences, please describe how you see TBLI in emerging markets.  How has it developed during the past decade and how do you see it developing during the next decade?

Robert Rubenstein:  The emerging markets have not taken as long to embrace ESG or impact investing as people think.  When I started TBLI 15 years ago, the European financial sector did not embrace what we were trying to achieve, namely, an economy based upon well-being, in which finance would invest according to the triple bottom line – people, planet and profit.  Eurosif did not exist, nor did the Climate Group.  There was no GRI, nor a Carbon Disclosure Project.  All that there was, were our company and a reasonably large Social Investment Forum in the UK.  The entire SRI market was mostly in the UK and mostly ethical investment.  Now, Europe is seen as a leader.  I am sure that TBLI played a significant role in that change of attitude and in building this market.

The same will happen in emerging markets.  TBLI needs to have the resources to develop satellite events in those markets.  Our role is educational outreach and curating this peer to peer learning and networking.  Once that happens, emerging markets will grow as quickly, if not quicker, than Europe.

Emerging Markets ESG:  Please provide a preview about the inaugural conference TBLI CONFERENCE™ USA 2013, which will take place in New York on June 17-18, 2013.

Robert Rubenstein:  The mood in the United States is finally changing with respect to climate change.  Perhaps Hurricane Sandy has played a role in this.  As a result, TBILI CONFERENCE™ USA will be held for the first time and will take place in the heart of the financial sector, Wall Street.

In existence for over 15 years, TBLI CONFERENCE™ consists of two annual conferences. These two-day events bring thought leaders together to learn and network about the state of the art of “sustainable finance”. We cover the liquid side and illiquid side of investment:

  • Liquid Side (stocks and bonds):  ESG (Environmental, social and governance) investing; and
  • Illiquid Side (private equity, infrastructure, micro finance, fuel free energy systems, green real estate, etc.

Conference programs always include keynote speeches to open and close the conference, two plenary sessions and a varying number of workshops to freely choose from. Traditionally, the conferences cover a wide range of sustainability-related issues, but still firmly keep their focus on sustainable investment.  The program is developed in cooperation with network partners and sponsors to ensure it addresses the topics important for the TBLI network and also gives credit to specific issues in the host region or country.  Advance registration to a workshop is not required; attendees are free to choose at the conference itself. Workshops and special breakout sessions may even be convened impromptu. Conference attendees are afforded plenty of opportunity to network, which is the conference’s main “raison d’être.”

The conference boasts a long-standing relationship with asset owners, investors, fund managers, rating agencies, SRI research specialists, sustainable businesses and social entrepreneurs.

During the two conference days, attendees have ample opportunity to network, peer to peer learn, and find new business partners. The first day closes with an invitation-only Grand Dinner, which provides investors and sustainable entrepreneurs with exclusive networking opportunities.

The following topics attracted the most attention in workshops and beyond. TBLI will be following up on these discussions within its network and with the upcoming TBLI conferences:

  •  Impact Investment – clearly the number “one” topic discussed at the conference.
  • Micro–finance – intense discussion about the impact and the role micro–finance can have in the future: What issues need to be addressed to improve access to capital markets in under-served regions? What are promising future business models for micro-finance institutions?
  • Integrated Reporting: A successful and useful integrated report involves more than stapling together a CSR and financial report. It involves a different approach to key performance indicator (KPI) selection, integrating balance scorecards and shared value creation.
  • Integration of ESG into Portfolios: Attendees, especially institutional investors, agreed that there is still a lot of work to be done, especially in the field of wealth management and in educating clients.

Discussions at the conference showed a growing demand for sustainable investment products and services, especially in the field of wealth management, infrastructure, project finance, private equity and social enterprise.