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Executive MBA project by Luke Gillott (EMBA 2015) leads to chapter in book on Conscious Investing.

Social purpose investing

Luke Gillott

Luke Gillott

A student project on investing with social purpose, undertaken as part of the Executive MBA (EMBA) programme at Cambridge Judge Business School, has been adapted to form part of a new book entitled Conscious Investing.

The book, published by Harriman House, includes 12 chapters based on practitioners’ views on “holistic investing approaches that benefit people and the planet”, according to the book’s subtitle. Luke Gillott, a member of the Executive MBA Class of 2015 at Cambridge Judge, looked at social elements of investing as part of his Individual Project on the EMBA, and this formed the basis of the book chapter entitled “The Practices of Conscious Companies”.

Luke is co-founder of Chi Impact Capital, a Zurich-based impact investment advisory and management firm assisting investors channel their capital into conscious and impactful investment solutions designed to achieve financial returns while simultaneously enabling positive change.

Luke shares some of his thoughts on conscious investing:

  1. Millennials are more demanding consumers, and this should help address challenges such as climate change and inequality that were overlooked as companies focused too much on profits and shareholder value. Surveys show that millennials (those born between around 1980 and 2000) will pay a premium to companies committed to positive social impact, and want to invest in such firms. This has led to new firms that certify the environmental, social and transparency standards of companies, and that’s all to the good.
  2. It may sound like a no-brainer, but every company needs to have a clearly thought out answer to some basic questions: why do we exist, what do we seek to achieve, and which shareholders should we create value for? This translates into doing well and not just doing good, as research shows that purpose-driven firms outperform in terms of share price, profits and employment.
  3. Enlightened companies apply a holistic approach to identifying and interacting with key stakeholders. Firms should look beyond their area of direct expertise to find people, companies and other types of organisations that can help form a beneficial business ecosystem. This can create value not only for the initial company involved, but for the broader community as well.
  4. To create a truly differentiated and superior service for customers, companies must first understand and segment their customer base. By knowing a customer’s needs and distinct proposition to its customers, a company can deliver better value and generate trust at the same time.
  5. Firms can create multiple value by educating suppliers and other stakeholders. This can take the form of sharing technology to improve both quality and productivity, or developing simpler procurement and distribution systems that cut distance and cost.
  6. Better management begins with self-awareness. If managers have a broad understanding of their own style, personality, strengths and weaknesses, this often translates into better understanding of the work patterns and other behaviour of team members. This can then boost motivation and development of the entire team.
  7. Company culture starts with the founders – and their communication skills. The fundamental beliefs, values and assumptions of a firm’s founders and top managers filter throughout an organisation. These in turn inform a firm’s secondary characteristics including trust, integrity, empowerment and accountability.
  8. Conscious companies are self-organising, self-motivating and self-managing organisations. Structures such as Holacracy, a self-management practice for organisations, distribute authority and increase transparency, accountability and organisational agility.
  9. The power of inclusive management teams and boards should not be underestimated. They not only encourage better leadership and governance, but also further contribute to better all-round management and board performance.
  10. Measure it to manage it. When it comes to social and environmental standards, it’s important to record and monitor performance. This helps ensure self-awareness within companies, but also acts as an early warning system for risk, waste and lost opportunities that might easily be avoided or managed better.