Introduction
In a recent episode of the Planet Profits Podcast, host Joe Pelusi sat down with Gabe Rissman, co-founder and President of YourStake, to explore the dynamic world of sustainable investing and values based investing.
Gabe, known for his innovative approach to aligning investments with personal values, shared insights on everything from the role of AI in finance to the intersection of investing and activism. In this Q&A, we dive into the highlights of their conversation, offering a glimpse into the future of value-driven finance.
Q: How did you get into sustainable investing?
A: My journey into sustainable investing really started in college. I was interested in climate change but had very little understanding of most of life, to be honest. I got involved with the student environmental coalition, led by Patrick Reed, who later became my co-founder.
I did a lot of reading on climate change and its impacts. Back then, it was more about future impacts, but now we're seeing them in real-time. I was compelled by how climate change acts as a force multiplier for many other issues, like resource wars.
The main way student activism around climate change was expressing itself in 2012 was through fossil fuel divestment. I had no real background in finance or investing, but I learned about it as a vehicle to support climate activism. This led me to dive into the whole space of financial services, financial advising, and investment management.
As a student, I realized there was a big challenge in the lack of data to make informed decisions and recommendations about investment portfolios. With my background in computational astrophysics and Patrick's in econometrics, we set out to make values-aligned investing more transparent and understandable.
Q: What are some common values that investors care about beyond climate change?
A: The number one thing people are looking for, even after 10 years, is fossil fuel exposure. After that, there's a grouping of different issues:
- Gender equality in leadership
- Tobacco exposure
- Weapons exposure
- Geographical exposures (like investments in Russia or Israel)
- Human rights issues, particularly forced labor
We're also seeing a lot of interest in groupings like the sustainable development goals, Sharia-compliant investments, and Catholic-aligned investments.
It's interesting to note how much of this is event-driven. When there's a new IPCC report, people look at greenhouse gas emissions. During elections, there's an explosion of interest in political contributions of companies in portfolios.
Q: How can investors make an impact on climate change?
A: There are several ways investors can make an impact:
- Divestment movements: These can raise awareness and lead to broader political action. Historically, divestment movements have often been followed by legislation.
- Private market investing: This allows for direct investment in sustainable infrastructure projects.
- Shareholder engagement and proxy voting: This involves using investor power to influence company behavior. There's strong academic backing for its effectiveness.
- Supporting disclosure laws: Advocating for regulations that require companies to report on their emissions and climate-related risks can drive change.
It's important to note that these strategies often work best in combination with other forms of activism and political engagement.
Q: What problem is YourStake trying to solve?
A: At YourStake, we're addressing two main issues:
- The lack of data to make informed decisions about values-aligned investing. We're trying to make this type of investing more transparent and understandable.
- The limitations of existing ESG rating systems. These often use a one-size-fits-all approach, which doesn't work when everyone has different values and priorities.
Our goal is to reflect anyone's values and help people understand if their portfolios align with what they care about, whether it's climate change, human rights, faith-based investing, or any other issue.
Q: How do you see AI transforming sustainable investing and financial advising?
A: We've been really interested in artificial intelligence and how it can make financial advisors' lives easier in a whole bunch of areas. This includes values-aligned investing, but also generally day-to-day practice management.
For example, AI can help with:
- Extracting key information from complex documents like bond prospectuses.
- Automating the analysis of brokerage statements to provide quick insights aligned with an investor's values.
- Integrating various financial documents (like mortgages, taxes, estate plans) to offer a more holistic view of an individual's financial situation.
The goal is to reduce manual entry and make advisors' lives easier, freeing up time for more strategic analysis and client interaction. We’re currently focused on solving these problems through Advisor Core that we launched about a year ago.
Q: What motivated you to focus on sustainable investing and finance?
A: For me, it's really about two things coming together:
- The mathematical side: Grappling with the gravity and scale of problems like climate change.
- The emotional side: Trying to figure out what the best expression of love would be.
These two aspects converge in sustainable investing. It allows me to address significant global challenges using financial tools as a lever for positive change.
A key moment for me was reading the Stern Review on the Economics of Climate Change in college. It transformed my understanding of climate change from just an environmental issue about polar bears to a massive human crisis. That's when I knew this was the field for me – where I could combine my analytical skills with my passion for making a real difference in the world.
Conclusion
The intersection of sustainable investing, AI, and personal values is reshaping the financial landscape, offering exciting opportunities for positive impact.
But we've only scratched the surface in this Q&A. To dive deeper into these topics, including more personal anecdotes and actionable strategies for aligning your investments with your values, I invite you to listen to the full episode of the Planet Profits Podcast. Whether you're an experienced investor, a financial professional, or simply curious about making your money matter, you'll find valuable insights to help you navigate the future of finance.
Listen to the Full Episode of the Planet Profits Podcast
About Gabe Rissman
Gabe Rissman is the President and Co-Founder of YourStake, a AI leading platform for portfolio management and values-based investing. With a B.S. in computational astrophysics from Yale, Gabe's expertise spans data science, AI, and ethical finance.
Gabe’s work and thought leadership in AI and values-aligned investing have been recognized by industry-leading publications, including WealthManagement.com, Financial Planning, Advisor Perspectives, and Investment News. He was named one of WealthManagement.com’s 2022 Ten to Watch, is a 30 Under 30 honoree in Socially Responsible Investing, and serves on the board of the Intentional Endowments Network and the Adasina Social Justice Index Committee. Gabe has also published several academic papers on values-based investing, further solidifying his reputation as a visionary in the space.
While at Yale, Gabe led the university’s fossil fuel divestment movement and spearheaded the Socially Responsible Investing fund, which became the first-ever student fund to file a shareholder resolution under his leadership.
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