Vienna, June 26, 2018 - Austrian-born Dr Christin ter Braak-Forstinger LL.M. is the author of the book “CONSCIOUS INVESTING – Practitioners’ views on holistic investing approaches that benefit people and the planet.” A Duke Law School and Harvard Law School graduate, Braak-Forstinger is dedicated to strategic philanthropy and impact investing advisory strategies. She is the founder of PVA Advisory (2011) and co-founder of Chi Impact Capital (2017). In her book, she advocates a holistic and conscious approach to investing and a regenerative capital market. Braak-Forstinger worked among others for the Financial Market Authority Austria. She is also the co-founder and president of BRAVEAURORA, a distinguished Austrian, Swiss and Ghana-based NGO (founded in 2009) that aims to reintegrate orphans and vulnerable children into their extended families, abolish illegal orphanages, and undertakes collaborative community development work in Northern Ghana.
Conscious Investing - A Systemic Perspective
Christin ter Braak-Forstinger advocates a fundamental shift away from traditional economic and investment strategies and towards a regenerative economy as well as regenerative forms of investing. In an article for Zürich-based “Finanznews” (June 19, 2018), she explained in greater detail her approach which goes one step further than impact investing. By pursuing a “multiple-value-approach,” which not only includes the achievement of ecological, social, ethical or personal values, conscious investing reflects “an inclusive systemic perspective.”
What exactly, is this systemic approach, though? What makes “conscious investors” different from traditional impact investors? According to Braak-Forstinger, conscious investors start with the same intention as impact investors in that they “are interested solutions that aim at solving the most pressing challenges of our times, as for instance climate change.” Like impact investors, they emphasize the importance of the UN SDGs and the Agenda 2030, taking those as their point of orientation.
However, conscious investors would then move one step further and ask the question of whether their well-intended investments might have negative impacts as well. If that were the case, a conscious investor would not invest. To illustrate this important point, the author cites as an example the project of a new on-shore wind energy park that is apparently a good investment, both from an ecological (clean energy) as well as a financial angle. However, upon closer inspection, it may turn out that this project has serious disadvantages - perhaps a large forest area would have to be cleared or the local residents of a village would have to be displaced to make room for the wind park. In this case, conscious investors would insist on an additional “Social- and Environmental Due Diligence” process,” noted Braak-Forstinger.
EU Push for Fiduciary Duty and ESG
In her article, she also raised the important issue of fiduciary duty which institutional investors have towards their customers and which comes into play when long-term ESG (environmental, social and governance) factors are not integrated into investment portfolios. Here, she referred to an EU Commission Report from December 2015 which revealed that a considerable degree of scepticism still prevailed among institutional investors with regard to integrating ESG indicators and there is still a lack of respective know-how and training opportunities. A new EU action plan for “Financing Sustainable Growth,” issued in March 2018, is supposed to remedy this deficit. The action plan stipulates that a European draft bill is to be presented by the end of June, which clarifies the investment companies and asset managers' responsibilities regarding fiduciary duty and sustainability issues. The goal is to hold them accountable for taking into consideration the ESG preferences of their customers when putting together their financial and insurance portfolios.
SDGs Still Largely Unknown
Christin ter Braak-Forstinger's book received wide-spread media attention, among others also from Austrian regional daily “Oberösterreichische Nachrichten (OÖ)” which published an interview with the author on June 25, 2018. Here, Braak-Forstinger noted her book addressed chiefly private individuals who were either altogether new to the topic was new or who already had some experience in conscious investing. Her primary goal was to raise awareness, since “most people still know far too little about [conscious investing].” Her talks at universities or even at the most recent Forum Alpbach revealed large parts of the audience lacked information even about the UN SDGs, which are to be implemented by 2030. “Mostly, you can count those who know about them off on one hand,” Braak-Forstinger said. This was especially deplorable since “the SDGs offer nearly endless possibilities for innovative enterprises to implement holistic business ideas.”
Change Is Ahead
Still, the author is optimistic the situation will improve, since “more and more people recognize the seriousness of our situation and are aware that our well-being depends on the preservation of our ecosystems. … If we all believe that we will achieve the global goals by 2030, we can do it.” In this respect, she attributes a key role to the so-called millennials (people born between 1980 and 2000). Their value system was different from that of their parents and grandparents, underscored Braak-Forstinger. “For this generation, it is values and not valuables that make the difference.”
The author gives a large part of the credit for the success of her book to her very cooperative co-authors who contributed knowledge and experience in the form of insightful personal investment stories. In the interview, the author also reflected on her own commitment to NGO Braveaurora, which enlarged her personal horizon and without which she would probably still be working in the traditional financial industry whose products she ultimately “nearly failed to comprehend,” as she admitted to OÖ. Her commitment to conscious investing has led her to set new priorities for herself, said Christin ter Braak-Forstinger: “When my children ask me 20 years from now: “Mom, which side where you on when the big energy turnaround happened?,” I want to be able to come up with a clear answer. For instance, solar panels – in 2016, for the first time, they were cheaper than comparable investments in coal or natural gas. The era of fossil fuels is over.”
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