Bretton Woods II: Strategic Investment for the Long-Term
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SOCIAL IMPACT INVESTING Bretton Woods II: Strategic Investment for the Long-Term An Interview with Dr. Tomicah Tillemann, Director of Bretton Woods II, an initiative of New America EDITORS’ NOTE Dr. Tomicah exhilarating, but often threaten- and Edelman to deliver policy changes that Tillemann serves as Director of ing, change. Eric Schmidt, Executive will move more resources into social impact the Bretton Woods II initiative at Chairman of Alphabet (formerly investment. We had a huge victory a few New America. He leads a coalition Google), heads New America’s board. months ago when the U.S. Department of of organizations working with the Labor issued rules that will unlock almost $5 world’s largest asset holders to re- What excited you about this op- trillion in U.S. pension assets for potential use duce exposure to volatility through portunity and how have you de- in impact investments. We’re already seeing strategic investments in social im- fined it? remarkable progress. pact and development. Between Opportunities don’t come much The third part of the agenda is finance. 2010 and 2014, Dr. Tillemann bigger. We’re living in a world with As assets come online for use in social im- served under Hillary Clinton and a huge quantum of capital and a pact investment, we want to make sure there John Kerry as a Senior Advisor to huge quantum of problems. Those are compelling, efficient, and effective op- the Secretary of State. He also es- Dr. Tomicah Tillemann problems – climate change, poor portunities to deploy those resources around tablished and chaired the State governance, pandemics – have a the world. That’s why we’ve been working Department’s Global Philanthropy Working devastating impact on their immediate victims with a new effort funded by Canada to cre- Group and the State Department’s Federal and also prove to be very expensive for the ate a marketplace for social impact transac- Advisory Committee on civil society. Dr. world’s largest asset owners. Bretton Woods tions. We’re also harnessing new technologies Tillemann joined the State Department in II grew out of a realization that we could use such as Blockchain – the technology behind 2009 as Secretary Clinton’s speechwriter and strategic investments in social impact and digital currencies – to help solve the gover- collaborated with her on over 200 speeches. development to reduce exposure to risk and nance challenges that sometimes keep inves- Previously, he spent four years on the staff of volatility, and improve investors’ risk-adjusted tors on the sidelines. the Senate Foreign Relations Committee as returns in the process. Mobilizing some of the How do you define social impact an advisor to Chairmen Joe Biden and John world’s largest pools of capital – sovereign investing? Kerry. Dr. Tillemann’s other professional ex- wealth funds, pension funds, endowments, Most people will say that social impact perience includes work with the White House, and family offices – to address these prob- investing is the allocation of capital in ways five U.S. Senate and Congressional cam- lems turns out to be a huge win for everyone. that deliver financial benefits and benefits to paigns, Reuters New Media, and the World It’s the right thing to do and the smart thing society. I’d go beyond that and say that it’s Bank. Dr. Tillemann is a co-holder of four to do. using investment strategy to help shape a patents on advanced clean technologies and What steps have you already taken world with greater social stability, sustain- a co-founder of IRIS Engines. He received his and how far along are you in this process? ability, and potential for long-term growth. B.A. magna cum laude from Yale University The Bretton Woods II initiative is focused We can almost see it as a tool for active risk and holds a Ph.D. with distinction from the on three objectives that can help realize the mitigation in our portfolio. In a few years, School for Advanced International Studies at potential of this new business model for so- we won’t see this approach as social impact Johns Hopkins University (SAIS). cial finance. investing. Instead, it’s just going to be smart First, we need rock-solid data in order investing. ORGANIZATION BRIEF New America to convince asset owners to rethink the How far are traditional institutions (newamerica.org) is an intellectual venture way they invest portions of their portfolios. like banks in moving forward in this area? capital fund, think tank, technology labora- That’s why our first priority is analytics. We’ve The most sophisticated financial insti- tory, and media platform. The organization’s been working with an extraordinary array of tutions are already there. A few weeks ago, hallmarks include big ideas, impartial analysis, partners, including some of the world’s Larry Fink of BlackRock issued a letter to the pragmatic policy solutions, technological in- leading analytic firms and academic institu- CEOs of all S&P 500 companies in which he novation, next generation politics, and cre- tions, to build out a platform that will allow us called for them to do more to incorporate ative engagement with broad audiences. New to take large portfolios of assets, identify the standards of sustainability, good governance, America was founded in 1999 to nurture a key vulnerabilities to volatility within those and environmental stewardship into the way new generation of public intellectuals – schol- portfolios, and make recommendations as they’re conducting business. That’s just the ars, policy experts, and journalists who could to the types of social impact investment beginning. Over the past six months, we can address major social, economic, and political strategies that are going to be most benefi- feel the market moving under our feet. We see challenges in ways that would engage the pub- cial for mitigating risks over the long haul. the Bretton Woods II agenda as an unprec- lic at large, and to provide a set of blueprints The second component is advocacy. With edented opportunity to purchase stock in the for American renewal in an era of global- the right tax and regulatory incentives, we can future of human kind. Big financial actors are ization and digitization. The initial chal- take an investment strategy that is already a already recognizing that it’s an investment op- lenge, which continues today, was to find the compelling proposition for asset owners and portunity none of us can afford to miss, and minds and foster the debates needed to guide turn it into a no-brainer. We have been work- we’re certain that this interest will continue American renewal in an era of profound and ing with partners like Bono’s ONE Campaign to grow.• VOLUME 39, NUMBER 2 POSTED WITH PERMISSION. COPYRIGHT © 2016 LEADERS MAGAZINE, INC. LEADERS 79.