Botelho: It’s been great, and we are excited about the momentum in this space. David is a pioneer in this field, and I am learning a lot from working with him. I also feel that my voice as a millennial member of the CCM team is heard and considered. As pioneers in impact investing, we understand the need to stay at the forefront of advancements being made in sustainable and impact investing.
Sand: There has been such a big change in impact investing in the last few years. In the early days in this field you had to manifest an example of double bottom line or socially responsible investing when speaking to people about it. For fixed- income strategies, it was literally about building a spreadsheet with the few available metrics.
Today, the reporting of metrics that clients need and care about is part of the work that Jessica is doing at CCM. This is in addition to the already robust database for our holdings. Recently, I was able to speak specifically about portfolio strategies we have implemented locally to a group of potential investors in Minnesota. I had many additional data points available to me because the field of impact investing has grown so much.
Ellis: What does that mean to potential investors and how do they respond to the availability of this data?
Sand: There are two answers to this question. Some people are only interested in the Modern Portfolio Theory data points and we provide that information.
Other clients want the performance data as well as information about where the money went, how is it being used in their communities and what positive impact it is making.
CCM only invests in bonds for which we have all the raw, granular impact data.
Ellis: Jessica, you and David have been developing new reporting capabilities for CCM. Tell our readers about these metrics and why they are important.
Botelho: One of the things that CCM has been doing since it started managing assets in 1999 is providing investors with detailed reports on how these bond proceeds are positively impacting their communities and missions. We analyze what information to provide and what is the best way to do so.
Within our fixed income impact products, we are able to offer clients the option to target their investments by specific impact themes or geographies. Impact themes that we focus on for clients may include affordable housing, education, healthy communities, disaster recovery, job creation and enterprise development. Recently, we have seen a strong upward trend in gender lens investments which benefit women and girls, as well as the broad spectrum of environmental sustainability, which can include infrastructure redevelopment, wind farms and sustainable agriculture among others. For me as a woman and a millennial, it’s exciting to see these trends developing and that they can be measured across multiple impact metrics.
We have also recently implemented a new mapping software which highlights specific loan details for affordable housing and homeownership nationwide. It was featured in our most recent client report, as was a continuation of walk scores for investments. These scores track proximity to public transportation, how safe are the roads for biking and other things of that nature.
Ellis: What other types of value enhancements do you look for in the affordable housing, first mortgage bonds that CCM holds in the portfolio?