How Newday Impact is getting clients ‘to put action behind’ climate issues

Newday Impact CEO Doug Heske joins A Time for Change to discuss how the company is helping provide countries with access to clean water, obtaining clients to invest in change, and holding partnering organizations accountable to following through with ESG goals.

Video transcript

ALEXIS CHRISTOFOROUS: Welcome back to "A Time for Change." Let's repeat a number we mentioned earlier because it's a crucial one-- 1.6 billion people worldwide do not have access to clean drinking water at home. That's 19% of the world population. Our next guests are working to change that.

SIBILE MARCELLUS: That's right. Doug Heske is CEO of Newday, an ESG investing platform, that works to support clean water efforts and other initiatives around the world. Now, the pandemic, Doug, had a huge impact on your company. You went from managing $5 million to managing $225 million. Do you find that investors have been more interested in aligning their pocketbooks to their values specifically because of the pandemic?

DOUG HESKE: I think probably quite the converse. I think that, certainly given the escalation of all of these global challenges that we're suffering from right now, is that there is an increased level of focus on wedding profit with purpose. So it is core to our mission not just to serve as an institutional asset management organization around these important issues like clean water and sanitation, but also what is a collective action program related to getting individuals and institutions to really put action behind many of these issues as well.

ALEXIS CHRISTOFOROUS: Now, Doug, I know you have actually aligned your investing platform with a foundation called the Georgie Badiel-- I hope I'm pronouncing her name correctly-- Foundation. She's a former Miss Africa, she's a model, and she started this foundation to help get clean water and sanitation to her hometown in Africa. Tell us a little bit more about that foundation's mission. But also, I'm curious how a platform like yours dealing with for-profit entities are able to support something like this not-for-profit foundation.

DOUG HESKE: Yes, absolutely. So Georgie Badiel is one of the world's leaders associated with clean drinking water and sanitation. As you had mentioned, she has a reputation-- a distinguished reputation-- as a supermodel and, of course, the work that she's done associated with her foundation is critically important.

We aligned ourselves with the Georgie Badiel Foundation given their very relevant work that they're doing serving her home country of Burkina Faso. So they are truly building a model associated with sustainability, not just with reference to well repair, but also with reference to jobs, empowerment for women, and training women to become engineers so that many of those wells can be repaired when they break down.

And that, for us, is a true definition of sustainability. So Newday runs what is an institutional investment management strategy built on clean water and sanitation. So we have aligned ourselves as a B Corporation with the Badiel foundation in order to generate a stream of charitable contributions that we end up directing towards that foundation so that they can continue to do the work that they and only they can do around deep, transformative change.

SIBILE MARCELLUS: Doug, how do you help clients? Be more specific in terms of helping them invest in the change they want to see in the world. How does one go from caring about an issue such as racial justice, education, fighting poverty to investing specifically in achieving that change?

DOUG HESKE: So one of the things that we are committed to doing across our entire set of investment strategies is really identifying those public organizations that are doing real, transformative work associated with a particular impact initiative. So how are they demonstrating out in the work that they do every day, not just writing policy but putting into practice these important initiatives? So they are organizations that are working on behalf of water organizations right here in the United States and in transformative change relative to those communities.

We are aligning ourselves with these impact organizations because our philosophy is that you can't necessarily get direct impact by exchanging one share of a particular portfolio or a particular company to another investor. But you can through the advocacy work that we do encouraging organizations to do this really important work, but also generating revenues for these organizations that are doing the work that they and only they can do. And that ends up becoming particularly meaningful, especially in areas like West Africa that are so desperately in need for capital associated with these really important impact initiatives.

ALEXIS CHRISTOFOROUS: I'm curious if the Biden administration's, you know, multi-trillion dollar infrastructure plan has informed your investment offerings or maybe how you're guiding clients to invest in ESG.

DOUG HESKE: That becomes a very important point right now. And certainly, there's been a lot of criticism across the investment marketplace today for what we define as sort of a lack of authenticity associated with ESG investing. And so ESG is great because it's created this common framework for a lot of people to understand what it is. But it doesn't go nearly far enough. So there's much more work that needs to be done, which begs the importance of the work that we're doing tied to a number of these impact organizations, whether it be the Georgie Badiel foundation, EarthEcho, which is run by Phillipe and Alexandra Cousteau, or Jane Goodall Institute-- and we're doing some work with them as well, as well as a number of other organizations.

SIBILE MARCELLUS: Doug, where do you advise your clients to invest their money to have the biggest impact? In public markets or directly in nonprofit foundations?

DOUG HESKE: It really is a combination of the two. And I think that these two things can be wed in a way that really creates really important change. So if you think about the fact that there's more than $500 billion contributed each year just here in the US to nonprofit organizations, that's amazing. That's really, really important work, especially for 501c3 organizations.

But the other thing that we try to do is you measure the size of the entire public investment market in the tens of trillions of dollars. Even if we're to take a very small portion of that, that can have monumental change for these organizations that are trying to do this work.

ALEXIS CHRISTOFOROUS: And I would imagine this is where it gets pretty challenging for a company like yours. But how do you make sure that these companies, these organizations that you're aligning yourself with are actually staying true to their ESG mission?

DOUG HESKE: You're right-- that's a lot of very in-depth, on the ground, hands-on work that we do with these companies. We consume a massive amount of data that comes from both public and private sources really to determine whether or not these are organizations that are doing this work and not greenwashing. So we go to extensive efforts to relay that and deliver that in the form that is understandable to our client base, whether they be individuals or institutions.

We report on much of this directly to clients, either through the Newday consumer app, which can be found in iOS or an Android, or certainly for institutional clients like family offices, there's a lot of direct reporting that we do around our impact outcomes and metrics associated with all of our investment portfolios.

SIBILE MARCELLUS: Doug Heske, it was great to have you on. Thanks so much.