4 Neobanks Show Up for Their Communities

Spencer Tierney
Fri, June 18, 2021

Big banks design their services for a broad customer base, but in doing so, they can fall short of serving the needs of historically marginalized communities. That gap is creating opportunities for new financial technology firms with roots in these communities.

“Representation matters so much in fintech,” says Asya Bradley, co-founder and chief operating officer of First Boulevard, a Black-owned firm offering financial education and services. “If you have a whole bunch of people who haven’t faced [a certain] situation, no one’s going to build [solutions] for that.”

Fintech firms that offer banking services, often referred to as neobanks, have certain advantages in the banking industry. By partnering with licensed banks, they can offer their typically digital-only banking accounts nationwide and avoid the costs of managing branches. That can benefit their customers in the form of lower fees and more robust perks than at traditional banks.

Here’s a look at four neobanks on a mission to make a difference for people of different communities.

First Boulevard: For Black Americans

Nationwide protests following the deaths of George Floyd and Breonna Taylor at the hands of police motivated fintech industry veterans Donald Hawkins and Asya Bradley to build First Boulevard to support their community.

"We literally quit our day jobs, [and] we didn’t know if anyone would fund us. We honestly felt like it was our children’s lives on the line," Bradley says.

Bolstered by an initial $5 million from investors, First Boulevard takes a personalized approach to financial guidance and offerings based on transactions and other data, so different recommendations would be given when someone's paying off student loans compared with when they're buying a house. The firm has an education platform that Bradley says has a collection of short audio clips about personal finance. And First Boulevard provides bank accounts with such features as real-time spending insights, no monthly or overdraft fees, cryptocurrency debit card rewards, free ATM access nationwide, and cash back when buying at Black-owned businesses.

“We’re all about people building generational wealth” and keeping “funds circulated within the [Black] community,” says Hawkins, president and CEO.

The typical white family has eight times as much wealth as the typical Black family, according to Federal Reserve data. That wealth gap partly stems from banks and government programs discriminating against generations of Black Americans, such as through redlining.

First Boulevard planned to start accepting some customers from its waitlist on Juneteenth, observed June 19, which celebrates the end of slavery in the U.S. The neobank joins a growing list of Black-owned banking firms, including such companies as Greenwood, MoCaFi, and Wicket.

Cheese: For Asian Americans

Ken Lian, co-founder and CEO of Cheese, created this platform to help Asian Americans who have had similarly difficult banking experiences to his own.

“Over the years, I paid thousands of dollars in [banking] fees and got rejected countless times for basic bank accounts, even though my FICO score was well over 800,” Lian says. Scores over 800 are considered excellent and usually qualify customers for most banking products, as well as for better rates. Lian says he doesn't know why he was turned down.

Cheese, named after a slang term for money, offers a rewards checking account with a 0.3% annual percentage yield, no monthly fees, two-day early direct deposit and a free national ATM network. Customer support is in English and Chinese, with more languages on the way, and people can contact the bank through the popular messaging app WeChat.

Cheese comes at a time when hate crimes against Asian Americans are in a national spotlight. The neobank encourages customers to support Asian-owned businesses by giving up to 10% cash back from debit card purchases at specific retailers, which was a feature added by popular demand.

Lian says the platform is working on accepting forms of identity verification besides Social Security numbers, making accounts obtainable for recent immigrants. Cheese’s app is available for iOS, and an Android version will launch this summer.

Purple: For people with disabilities

Purple seeks to help people in the disability community save money without risking the loss of government benefits. The Supplemental Security Income program provides monthly payments to nearly 8 million people, most of them with a disability. And being in the program is a big way many people qualify for health insurance through Medicaid. But to get SSI, individuals cannot have more than $2,000, or $3,000 for couples, in total value across many assets, including bank accounts.

“Traditional banks’ monthly deposit [or] balance requirements are unsustainable for families who have to navigate the asset limit,” says John Ciocca, founder and CEO of Purple.

He and his brother Christian are the team behind Purple and youBelong, a social media network that connects people with special needs and their families. Purple started as a way to address the money management challenges that Christian and others in the community are grappling with.

Purple provides a tax-advantaged savings account known as an Achieving a Better Life Experience account. Created under a 2014 law, ABLE accounts let people with disabilities save beyond SSI limits and withdraw penalty-free for purchases that improve their lives, such as housing and education. Unlike state programs that offer ABLE accounts, Purple hopes to be a national brand that makes this saving solution more popular and at a low cost of $3 monthly. Purple also offers a free checking account where every debit card swipe sends money to the Special Olympics.

Daylight: For the LGBTQ community

About 5.6% of American adults, or at least 18 million people, identify as lesbian, gay, bisexual or transgender, according to a 2020 Gallup poll. That percentage has increased from 4.5% in 2017. But barriers still exist, especially for transgender and gender noncomforming Americans and how banks identify them.

Daylight is a mobile-first banking account that makes a priority of calling people by their chosen name, even if it differs from their IDs. The chosen name shows up on debit cards and in customer support channels. This service can protect transgender Americans from being deadnamed, or called by a name given at birth that doesn’t reflect their gender identity. Daylight also asks for customers’ pronouns to ensure they’re gendered correctly in any communications.

The neobank, led by Rob Curtis, a gay man, and Billie Simmons, a trans woman, curates content for the LGBTQ community such as blog posts about the costs of surrogacy, adoption and fertility for queer families. Customers can also get advice from a network of financial coaches who understand the needs of LGBTQ individuals. Daylight launched last year in a limited test phase; people looking to sign up can join a waitlist.

"We do see some fintechs, Daylight as a great example, with products that you can’t get at a traditional bank,” says Hannah Calhoon, vice president of innovations at the Financial Health Network, a nonprofit that focuses on financial stability for low- to moderate-income communities.

“We often find that the folks closest to the problems are closest to the solutions,” Calhoon says.


Spencer Tierney writes for NerdWallet. Email: spencer.tierney@nerdwallet.com. Twitter: @SpencerNerd.

The article 4 Neobanks Show Up for Their Communities originally appeared on NerdWallet.

Big banks want communities of color to trust them. But it's not so simple

Samantha Masunaga, Jackeline Luna
Sat, June 19, 2021

Sylvia Adetona has deposited checks at the same financial institution for more than 25 years. That doesn't mean she trusts banks.

Over the decades, the 68-year-old South Los Angeles resident has seen the unequal treatment banks gave communities of color and low-income customers.

In the leadup to the Great Recession, banks issued a disproportionate number of subprime mortgage loans to Black and Latino borrowers. Adetona remembers the for-sale signs dotting her neighborhood — those families lost their homes when they couldn't afford to make their mortgage payments, yet many of the banks were bailed out. Someone she knew had a decent credit score but was still denied a loan. Bank branches shut in her neighborhood, forcing her and others to travel farther when they want to interact with tellers.


"I wouldn't say I have an absolute great relationship with the bank," Adetona said.

Communities of color have many reasons to distrust large national banks. In some cases, the wariness stems from racist practices in the financial system, such as redlining, or from past bank failures. In others, it arose from a lack of transparency about fees or a feeling that national banks want only certain kinds of customers.

Some people have embraced alternatives to America's big financial institutions, turning toward Black-owned banks, payday lenders, credit unions and cash-only solutions.

How — and whether — big banks can build trust is a major question.

"There has been systemic financial exclusion of certain demographics,” said Charles Danso, an assistant professor of finance at Cal State L.A. To truly serve those communities, banks need to "put some thought into generating financial products that will meet the needs" of these individuals.

After the murder of George Floyd and the subsequent uprisings for racial equity, national banks — like many other large corporate institutions — pledged to help reduce the racial wealth gap by investing in Black and Latino communities.

U.S. Bank said it would offer $116 million in community grants and investments in small businesses and organizations owned and led by Black people, among other programs. JPMorgan Chase said it would invest $30 billion over five years into Black and Latino communities through funding for businesses, home loans and opening "community center" branches in underserved areas that provide additional services aimed at unbanked or underbanked households.

Last month, one of those Chase community center branches opened in Los Angeles' Hyde Park neighborhood. To oversee the branch's new services, the bank selected Jordan King, who lived in South L.A. for several years as a child while his mother, a Jamaican immigrant, was a doctor at Martin Luther King Jr./Drew Medical Center.

"I can’t say that we had really any sort of relationship with bankers and, equally as important, didn’t know any bankers that could identify with my mother’s story and us as a Black family," he said, adding that his family didn't have access to complex banking services that fit his mother's high income level.

The community branch is a renovation of a preexisting Chase bank branch, with space and equipment for community meetings, financial literacy sessions and other gatherings. It also added new staff positions including a community home lending group focused on guiding unqualified borrowers toward their first home purchases and minority business consultants to advise South L.A. business owners.

"We want to give people that access to those bankers, to those experts that we know have been missing in South L.A., at least at this scale, and be that change and be that ecosystem to support the folks that are here now," King said.

The hope is that, with workers embedded in and coming from the area, the bank will be woven into the community.

Branch manager Christanne Fuston walks though the new community room at Chase Bank in the Hyde Park neighborhood. (Francine Orr / Los Angeles Times)

“Trust is predicated on really being aware of what a community needs, really aware of how people are receiving us, how people are experiencing us," said Jonathan Morales, Chase's head of community banking for California. "There's a lot of sentiment out there that people may not necessarily trust banks. This team is really predicated upon listening."

Some community members say just being there is not enough. Around the corner, the Sole Folks retail cooperative provides a place for local artists to show and sell their wares without the high cost of renting their own storefronts. Sole Folks also has an art gallery and art lab where artists can work or hold classes on making such items as ceramics, candles and soap. Co-op vendors and class instructors pay a small percentage back into the co-op and lab.

“It’s really based on group economics and kind of raising each other," said Akil West, Sole Folks' chief executive.

The idea was born out of the pandemic, when foundation and grant funding for the art community in Leimert Park dried up and galleries and studios closed, leaving artists no place to show their art, West said.

"It was hard for these people to keep their studios, have shows and make a living," he said.

West said he sees the organization becoming the "Black think tank" where corporations and other groups will come and speak to the community about what's needed there. The group has also attracted attention from banks and community development financial institutions.

"I want the community to recognize their position, to recognize their power,” he said. "In order for [banks] to survive, they’re going to have to provide services to us.”

Shoppers look through racks of clothes at the August 2020 grand opening of Sole Folks in Leimert Park. (Gary Coronado / Los Angeles Times)

What those services look like — and how they're offered — is another thorny aspect of trust-building.

A Federal Deposit Insurance Corp. survey found that in 2019, 5.4% of U.S. households — about 7.1 million — did not have a checking or savings account at a bank or credit union. Although the rate of unbanked households has trended downward in recent years, it continues to be high among households of color.

About 13.8% of Black households and 12.2% of Hispanic households were unbanked in 2019, compared with 2.5% of white households and 1.7% of Asian American households, according to the FDIC survey. The most cited reasons for not having an account were an inability to meet minimum balance requirements and distrust of banks.

“There’s probably no simple or easy solution you could implement overnight" to build trust in banks, said Leonard Chanin, deputy to the FDIC chairman. "If people are suspicious or lack trust or know someone who had a bad experience, I think it's going to take a while to persuade people.”

Lakiarra Lofton, 30, has spent most of her adult life without a bank account. As an 18-year-old college student working part time, she opened an account at one of the nation's largest banks. Lofton remembers not being responsible with her money. She would use her card to pay for gasoline, movie tickets and clothes. The transactions would go through regardless of whether she had the funds. Then the fees would follow.

“Before I knew it, I had to not use that card again and walk away because it just sucks having to look at your bank statement and be in the red,” she said.

Years later, she tried to open a new account at a different big bank. But there was a complication. She says the banker handed her the phone and her old bank was on the line, asking that she repay $200 that she owed from the previous account. She hung up immediately and rushed out the door.

Some banks use services that check applicants' banking history. If that report turns up a history of unpaid fees or mishandling of a bank account, customers' account applications can be denied.

“I was really embarrassed, and I just never looked back,” Lofton said.

Lofton turned to check cashing places, prepaid debit cards and, most recently, fee-free mobile banking services.

Although many alternatives to traditional banking can be expensive, there are exceptions. Cirenia Perez, 48, has organized condinas, an interest-free way of saving money, with friends and family members for 30 years. Each week, a set number of participants each chip in $250 and take turns bringing home the pooled money. Perez says condinas have helped those around her save up for a car, pay off high-interest credit cards and buy holiday gifts.

“When you get your paycheck, you spend it,” she said. “But when you’ve committed to saving a set amount every week, you know you can’t spend that money.”

A Federal Reserve report found that as of 2018, 16% of the U.S. adult population was underbanked, meaning that they had a traditional bank account but also used services such as payday loans, money orders, paycheck advances or check cashing services.

On a recent Friday afternoon, Ernesto Huinac, 35, who works in construction, stopped by ACE Cash Express, a check-cashing store and payday lender on the corner of Western and Slauson avenues in L.A.'s Harvard Park neighborhood. He said he comes in every month to purchase a money order for his rent ever since his landlord stopped accepting cash.

Depending on the money order's dollar amount, the fee can run $1.09 to $3.39. But that didn’t seem to bother him. As far as he knows, his bank does not offer money orders.

Some big banks have begun offering such services — opting to provide underbanked people with what they're seeking rather than trying to force a fit with traditional bank products.

Chase and U.S. Bank both offer a simple checking account that provides electronic payments through debit cards, mobile banking services and access to ATMs but doesn't offer paper checks. OneUnited Bank, the largest Black-owned bank in the country, is among those that offer second-chance checking accounts or a secured credit card that enable people to build or rebuild their credit before moving on to an unsecured card.

"You have all these financial structures in place; it’s possible to come up with services our community needs," said Teri Williams, president and chief operating officer of OneUnited. "But it does take work.”

Black-owned and -led banks were founded to help Black Americans get access to banking services, small-business loans and home mortgages when other, larger financial institutions discriminated against them. But many of these banks don't have enough capital to help their communities build wealth, which — in a vicious cycle — means not very much money flows into the banks.

Credit unions are an alternative to banks and often provide services with lower fees and penalties, though they usually are not open to all members of the general public. For example, USC Credit Union serves university employees, students and alumni, as well as Los Angeles residents who live within five miles of USC's main campus or health sciences campus.

Credit unions also sometimes face a name recognition problem.

"Most people don't know what a credit union is," said Gary Perez, president and chief executive of USC Credit Union. "The overwhelming majority of people who don't work for an entity that has a credit union, they just don't know what distinguishes a credit union from a commercial bank."

Banks make money off fees and loan interest, which could make some of these community banking initiatives run contrary to the main goal of profitability, said Danso, the Cal State L.A. professor. Then it becomes more of a moral question.

"Banks, given enough incentive, could develop products for these communities to benefit and to help them move toward a higher economic success," he said. "If somebody doesn't have money, do you not take care of them because they don't have money, especially if it's due to systemic issues?”

Alice Rodriguez, head of community impact at Chase, said serving the needs of communities and turning a profit don't have to be mutually exclusive.

"Can you do both? Yes," she said. "I just think you have to be very intentional about how you approach it."

Adetona of South L.A. wants banks to focus not just on flashy initiatives but also on caring about the individuals in the communities they say they want to help. She'd like longstanding personal relationships to count for something when the bank weighs a loan application. She'd like for banks to figure out how to provide straightforward opportunities and services to more people without the looming specter of surprise penalties.

"If they would do that, then they wouldn't need to say, 'I’m going to spend such and such money to invest in the community," she said. "That's good, but just do right."

This story originally appeared in Los Angeles Times

How the Bitcoin Industry Is Responding to Wall Street’s ESG Concerns

Lyllah Ledesma
Fri, June 18, 2021


One cryptocurrency asset manager is buying emission offsets. A digital-asset trading platform says it wants to be “carbon negative” within 18 months. A new token would wrap bitcoin with carbon credits so that they could trade together as a single asset.

Just a month after Tesla CEO Elon Musk tweeted his concerns about the potential environmental harm from bitcoin mining, sending the cryptocurrency’s price into a tailspin, some industry players are rushing to respond. They’re looking at ways to address the environmental, social and governance (ESG) issues that might deter big institutional investors from embracing bitcoin.

“They are doing it out of the sense of survival,” said John Reed Stark, a former chief of the U.S. Securities and Exchange Commission’s Office of Internet Enforcement who now works as a consultant.

Related: Market Wrap: Bitcoin Drops Ahead of Looming ‘Death Cross’

Though some experts had been warning for years that the bitcoin market’s narrative of “institutional adoption” was on a collision course with the ESG mandate that now dominates the activities of big money managers like BlackRock, it’s too early to tell how much of a difference the latest efforts might make. Will the bitcoin mining industry actually shrink its carbon footprint or just announce ambitious goals and make peripheral adjustments to give big investors cover?

“Bitcoin in its current form is not good for the environment,” said Campbell R. Harvey, an economist and professor at Duke University. “Nobody can argue that this isn’t a true statement.”

Some industry executives have criticized the narrative that bitcoin is particularly bad for the environment, arguing that the adverse climate effects are overblown. As MicroStrategy CEO Michael Saylor said at a meeting this week of the newly formed Bitcoin Mining Council, “We are not trying to fix bitcoin” but trying to counter the threat that “people don’t understand bitcoin.”

Another position is that the digital currency’s value to the economy and society justifies the energy consumption.

Related: Mining Council: We Must Counter ‘Misinformation’ About Bitcoin’s Environmental Damage

Jesse Powell, CEO of the cryptocurrency exchange Kraken, told Bloomberg in an interview published this week that bitcoin is “a lot greener than people give it credit for.” Early Thursday, Bitcoin Magazine tweeted out a screen grab of the interview, and Musk tweeted in response: “Based on what data?”

The issue doesn’t seem to be going away, with bitcoin now changing hands at around $37,500, well off the all-time high near $65,000 reached in April.

So some big players are moving beyond the rhetoric and denial toward business changes that might help to address or remedy any environmental ills.

Here’s a rundown:

Crypto.com wants to be “carbon negative.” Crypto.com, an app for trading cryptocurrencies, announced in a blog post on May 27 that it had set a goal for the next 18 months of becoming “carbon negative.” “Starting immediately, the first phase will focus on an assessment of the carbon generated through cryptocurrency trading, deposit and withdrawal activities across all of Crypto.com’s platforms (App, Exchange, NFT, DeFi, and Crypto.org Chain),” according to the post. “The second phase will identify the most effective ways to offset the carbon generated, with the support of accredited organizations specializing in carbon offsetting and sequestration.” A third-party auditor will be retained to offer accountability. “The climate crisis is the most pressing issue of our time” CEO Kris Marszalek said in the post.


One River Digital and “tokenized carbon credits.” The asset management firm has filed for a bitcoin exchange-traded fund (ETF) that would be carbon neutral. The company said last week that an overwhelming majority of assets in an existing institutional bitcoin fund had chosen to switch to a new “carbon neutrality share class.” The firm has “developed an index (BTC.X) based on the estimated carbon emitted per bitcoin and the market price of the offset required to neutralize that emission,” according to a press release. “At today’s prices and estimated carbon emissions, this is equivalent to $55 per year, or 0.15% of the cost of a bitcoin. One River buys tokenized carbon credits, validated on a blockchain.”


CoinShares and the “ESG crypto mining product.” CoinShares, a digital asset investment firm, said in a May 27 press release that it had made a strategic investment in Viridi Funds and that it will advise the manager on “the first ESG crypto mining product in the U.S.” According to the press release, the move will help “meet emerging client appetite for these types of products.”


Tokensoft and the “carbon-neutral bitcoin-backed asset.” Wrapped, a collaboration between tokenization specialist Tokensoft and digital-asset custodian Anchorage, announced a “carbon-neutral bitcoin-backed-asset” called Eco BTC (eBTC). According to a press release, the asset will combine bitcoin and carbon credits into a single digital asset, built atop the Celo blockchain platform. The deal will allow “institutional investors to add bitcoin to their portfolio and meet their fund’s sustainability goals,” Tokensoft CEO Mason Borda said in the statement.

Of course, bitcoin mining represents just one of many industries struggling to adapt to the ESG concerns. According to the Wall Street Journal, General Motors and Ford are boosting investments in electric vehicles to reduce emissions, while utilities including Xcel Energy and CenterPoint Energy are producing more renewable power.

“The auto industry in America is tackling ESG concerns at the moment,” said Steve Ehrlich, CEO of Voyager Digital. “However, it doesn’t come under the same level of scrutiny as the crypto industry does.”

Harvey, the Duke professor, says some investors might latch onto the idea that their bitcoin-related investments could be sanitized via carbon credits, but he notes that other investors might not care at all – preferring the returns that might come from fast-moving cryptocurrency markets and disregarding the potential environmental impact.

In the long run, Harvey says, the concerns might be mitigated because “eventually energy production won’t be dirty,”

“Then bitcoin will no longer have this problem,” he said.

None other than Arthur Hayes, founder of the BitMEX exchange (and also a defendant in U.S. federal charges over alleged violations of the Bank Secrecy Act) noted in a blog post last week how crucial the issue had become.

“The ESG narrative is front and center because the most desirable locations for mining bitcoin are those that appear to be ESG-compliant,” Hayes wrote on June 10. “That stamp of approval allows institutional money to check their box, and invest.”

Sam Bankman-Fried, CEO of the cryptocurrency exchange FTX, told Bloomberg this week in an interview that solutions to address investors’ concerns might be “something the industry could pay without really setting itself back that much.”

“The answer is that it’s not free to mitigate, but it’s not that expensive,” Bankman-Fried said.

COMPASSIONATE CAPITALI$M

SG, SRI, and Impact Investing: What's the Difference?

By MICHELLE ZHOU
Updated Jun 20, 2021
TABLE OF CONTENTS
ESG vs. SRI vs. Impact Investing
ESG
SRI
Impact Investing
The Bottom Line

ESG, SRI, and Impact Investing: What's the Difference?

The value of an investment is no longer just about returns. An increasing number of investors are also calling for their money to make a positive impact on society and the world at large.


In fact, socially responsible investing and one of its subsets, impact investing, accounted for more than $1 out of every $3 under professional management in the U.S., according to the 2020 survey by the U.S. Forum for Sustainable and Responsible Investment. This amounts to over $17 trillion in assets under management yearly, an increase of 42% from 2018.1


Accompanying the growing demand is a proliferation of funds and strategies that integrate ethical considerations into the investment process. Environmental, social, and governance (ESG), socially responsible investing (SRI), and impact investing are industry terms often used interchangeably by clients and professionals alike, with the assumption that they all match in meaning and approach. However, distinct differences exist that will affect how client portfolios should be structured and which investments are suitable for meeting social impact goals.


KEY TAKEAWAYS

A growing number of investors want to see their money go toward stocks or funds that are both profitable and reflective of their social values.

Three styles of investing fulfill this: Environmental, social, and governance (ESG), socially responsible investing (SRI), and impact investing.

ESG looks at the company's environmental, social, and governance practices, alongside more traditional financial measures.

Socially responsible investing involves actively removing or choosing investments based on specific ethical guidelines.

Impact investing looks to help a business or organization complete a project or develop a program or do something positive to benefit society.
ESG

ESG refers to the environmental, social, and governance practices of an investment that may have a material impact on the performance of that investment. The integration of ESG factors is used to enhance traditional financial analysis by identifying potential risks and opportunities beyond technical valuations. While there is an overlay of social consciousness, the main objective of ESG valuation remains financial performance.

The table below lists common ESG factors that are considered. Investments with good ESG scores have the potential to drive returns, while those with poor ESG scores may inhibit returns.



Environmental

Social

Governance


Energy consumption

Human rights

Quality of management

Pollution

Child and forced labor

Board independence

Climate change

Community engagement

Conflicts of interest

Waste production

Health and safety

Executive compensation

Natural resource preservation

Stakeholder relations

Transparency & disclosure

Animal welfare

Employee relations

Shareholder rights



SRI

Socially responsible investing goes one step further than ESG by actively eliminating or selecting investments according to specific ethical guidelines. The underlying motive could be religion, personal values, or political beliefs. Unlike ESG analysis which shapes valuations, SRI uses ESG factors to apply negative or positive screens on the investment universe. For example, an investor may wish to avoid any mutual fund or exchange traded fund (ETF) that invests in companies engaged in firearms production because they hold anti-conflict beliefs. Alternatively, an investor may opt to allocate a fixed portion of their portfolio to companies that contribute to charitable causes.


Other negative SRI screens include:

Alcohol, tobacco, and other addictive substances
Gambling
Production of weapons and defense tools
Terrorism affiliations
Human rights and labor violations
Environmental damage

For clients engaged in socially responsible investing, making a profit is still important, but must be balanced against principles. The goal is to generate returns without violating one’s social conscience.

Between 2018 and 2020, sustainable, responsible, and impact investing grew at a more than 42% rate, rising from $12 trillion in 2016 to $17.1 trillion in 2020, according to the U.S. Forum for Sustainable and Responsible Investment.1
Impact Investing

In impact or thematic investing, positive outcomes are of the utmost importance—meaning the investments need to have a positive impact in some way. So the objective of impact investing is to help a business or organization accomplish specific goals that are beneficial to society or the environment. Investing in a nonprofit dedicated to the research and development of clean energy, regardless of whether success is guaranteed, is an example.

The Bottom Line

About half of investors currently own responsible investments, and about the same number would be willing to convert their entire portfolio to be responsible, according to a recent survey conducted by TIAA. The desire to invest ethically is especially pronounced among millennials, the study showed. Implementing that desire, however, may be no easy task, given the growing complexity of investment concepts and products catering to this sector, which is why advisors must be well prepared to step in and help.

Online >> The US SIF Foundation’s Biennial “Trends Report” Finds That Sustainable Investing Assets Reach $17.1 Trillion

investor_interest_in_responsible_investing_soars.pdf (tiaa.org)

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GREEN CAPITALI$M

Goldman to RBC See a Slow-But-Sure European Green Stocks Revival

Sam Unsted

BLOOMBERG
Sat, June 19, 2021



(Bloomberg) -- European renewable-energy stocks, battered for much of this year, present a buying opportunity because their growth story remains intact. That pitch from Goldman Sachs is luring some investors -- those not in a hurry, that is.

The way Goldman tells it, with governments promising to phase out fossil fuels and the environmental, social and governance mantra still resonating, the sector is bound to eventually provide rich rewards for the long-term investor. RBC Wealth Management concurs.

“For us, the recent correction represents a good opportunity to build strategic positions in these stocks which should benefit from strong secular growth,” said Frederique Carrier, head of investment strategy at the firm. But “patience may be required,” she said.


After a stellar rise last year, renewables have fallen out of favor. The European Renewable Energy index is down 27% from its January peak, and three of the 10 worst-performing Stoxx 600 constituents in 2021 are renewable-energy plays -- tumbling an average of 35%. Last year, they were among the best performers in the index, with Norwegian electrolyzer company Nel ASA more than tripling and solar power firm Scatec ASA more than doubling.Many factors have coalesced to pull the sector down, leaving renewable-energy equities trading at a discount to other growth stocks. As the economy rebounds after the pandemic, cheaper value stocks are outperforming pricier growth shares. Also, prominent clean-energy exchange-traded funds are rebalancing holdings, putting technical pressure on some high-flying renewable names. Added to that are rising bond yields, inflation jitters and increasing competition in a sector where, as Carrier says, valuations got “a bit stretched.”

“Renewable companies have just been stuck in with all the other growth stocks,” said Randeep Somel, portfolio manager on the M&G Climate Solutions fund, suggesting that’s a mistake. Unlike tech stocks that benefited from a pandemic-driven demand boost, “it is the one area where you are guaranteed a positive growth trajectory,” he said.

That may be, but some still see renewables as pricey. For instance, even after declines this year, wind-turbine maker Vestas Wind Systems A/S trades at around 34-times forward earnings, while Siemens Gamesa Renewable Energy SA is at nearly 43-times, according to Bloomberg data. That compares with around 17 times for the Stoxx 600 Europe benchmark.

“What we’re not doing is just buying the very expensive pure-plays,” said James Sym, head of European equities at investment firm River & Mercantile. “They’re still expensive. I have no idea, and nor does anyone else, whether inflation proves to be transitory.” If it doesn’t, pricey clean-energy stocks could be “very vulnerable,” he said.

To investors like Martin Todd, those concerns look “misplaced” given the underlying growth story for renewables and as inflation fears and commodity prices ease.

“If anything, the investment case has strengthened,” said the portfolio manager at Federated Hermes.

Hints of a recovery are starting to emerge. A global basket of “green transformation” stocks created by Saxo Bank has risen more than 10% in the past five weeks. Analysts are also turning positive. UBS AG upgraded its rating on Orsted and Berenberg said Vestas is among its top clean-energy picks, with both brokers saying the stocks are attractive after falling this year.

“Now is a good entry point for investors looking for a long-term play given the momentum is growing and we are likely to see multiple decades of growth,” said Harrison Williams, an analyst at Quilter Cheviot. His preferred stocks are Vestas and Portuguese renewable utility EDP Renovaveis SA.

The European Union reached an agreement on its Green Deal in April and U.S. President Joe Biden has set out a $2.25 trillion plan to invest in clean power and electric vehicles. Bloomberg New Energy Finance forecasts two years of record onshore wind builds in Europe in 2021 and 2022, plus a record year for solar builds in 2021 too. Then there’s the November United Nations Climate Change Conference, which could help to boost sentiment, M&G’s Somel said.

That said, anyone looking for a quick rebound may be in for a disappointment. For starters, the market backdrop of economic recovery will be more conducive to value stocks. Also, while renewables have strong winds in their sails, much of them are on the horizon.

“We won’t necessarily see a bounce back within six months, but this ultimately does not matter as it is a theme that is going to dominate for years to come,” said Williams.

Renewable stocks could rebound in the fourth quarter, said Adeline Diab, head of ESG and thematic investing in EMEA for Bloomberg Intelligence.

Investors may “rush into” clean-energy names before the end of the year as they align with the EU Taxonomy, the bloc’s sustainable investment framework, she said. The “most direct and quick way” to do this is to invest in pure-play names like Vestas or wind-farm operator Orsted A/S, Diab said.

“Despite elevated equity valuations, investors cannot overlook one of the biggest transformations of our society since industrialization,” said Peter Garnry, Saxo Bank’s head of equity strategy.

Forecast predicts global increase in coastal overtopping


When waves, tides or storm surges breach natural or artificial barriers, whether dunes or a flood wall, it is called coastal overtopping. Photo courtesy of the government of Guadeloupe

June 18 (UPI) -- Coastal overtopping is expected to accelerate during the coming decades, exposing more of Earth's coastline to the risk of flooding.

Coastal overtopping, or wave overtopping, occurs when waves, storm surges or extreme tides breach natural or artificial coastal barriers, whether a reef or flood wall.

As sea levels rise and coastal storms become more frequent and intense, the risk of coastal overtopping predictably increases.

To anticipate global increases in coastal overtopping, researchers combined satellite images with sophisticated models.

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The results, published Friday in the journal Nature Communications, suggest coastal overtopping will accelerate through the end of the century, especially in the tropics.

Scientists began by estimating the number of global submersion events between 1993 and 2015.

Using satellite data, researchers measured the slope of coastlines around the world, as well as the highest points along a coastline.

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Armed with timestamped measurements of local sea levels, researchers estimated how often and for how long coastal defenses were at risk of being overtopped.

"The combination of tides and episodes of large waves is the main contributor to episodes of coastal overflow," study coordinator Rafaël Almar said in a press release.

"We identified hot-spots, where the increase in risks of overtopping is higher, such as in the Gulf of Mexico, the Southern Mediterranean, West Africa, Madagascar and the Baltic Sea," said Almar, a researcher in coastal dynamics at the French Institute for Sustainable Development, IRD.

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Next, scientists used computer models to simulate coastal overtopping increases under various sea level rise scenarios.

The simulations showed increases in the risk of coastal overtopping are likely to outpace rates of sea level rise.

"The frequency of overtopping is accelerating exponentially and will be clearly perceptible as early as 2050, regardless of the climate scenario," Rafaël Almar said. "By the end of the century, the intensity of the acceleration will depend on the future trajectories of greenhouse gas emissions and therefore the rise in sea-level."

Researchers found that under the high emissions scenario, the risk of coastal overtopping could increase by 50 fold.

"As we go along the 21st century, more and more regions will be exposed to overtopping and consequent coastal flooding, especially in the tropics, north-western United States, Scandinavia and the Far East of Russia," Rafaël Almar said.

Researchers suggest additional studies are necessary to home in on more precise coastal overtopping forecasts for regions and stretches of coastline.

CAPITALI$M IN SPACE: BALLOON FLIGHTS

Space tourism startup flies test balloon 20 miles high over Florida


Space Perspective's test article for a planned passenger airship called Neptune is shown during a test on Friday at Space Coast Regional Airport. Photo courtesy of Space Perspective



A conceptual image shows the Spaceship Neptune, a project of aerospace firm Space Perspective, suspended from a hydrogen balloon in the stratosphere. Image courtesy of Space Perspective

ORLANDO, Fla., June 18 (UPI) -- Space tourism company Space Perspective successfully flew a prototype of its giant stratospheric balloon 20 miles high over Florida early Friday, the company announced.

The balloon lifted off at 5:23 a.m. EDT from the Space Coast Regional Airport near Kennedy Space Center and splashed down 6 hours and 39 minutes later in the Gulf of Mexico, the company reported. Crews recovered the balloon and a test article representing the Neptune capsule that eventually may carry people

The test of the prototype, Neptune One, kicks off an extensive test campaign, company co-founder Jane Poynter said in an interview before the test. She said Space Perspective aims for its first crewed flight in 2023 and first commercial flight in 2024.

"These test flights are designed to make sure that the particular geometry that we using, the shape of the capsule, will fly as we plan it to and splash down as planned, so there's nothing to take us by surprise later," Poynter said.

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Exciting Announcement! We successfully completed our first, historic #Spaceship #NeptuneOne #TestFlight reaching 100,000 feet!

Making the first steps for #SpacePerspective towards flying #SpaceExplorers to space for an unrivaled experience.https://t.co/lcWuGKPtDP pic.twitter.com/Iz5ayCzavz— Space Perspective (@SpacePerspectiv) June 18, 2021

Space Perspective has joined a growing number of companies that plan to conduct space tourism, with the important qualifier that it would only bring passengers to the edge of space. The test flight height of 20 miles falls short of the definition of space -- which is the Kármán line at 62 miles high.

RELATED Balloon firm plans test to later take tourists to edge of space

The leaders are Blue Origin, which intends to fly its CEO, Amazon founder Jeff Bezos, to space in July, Elon Musk's SpaceX and Richard Branson's Virgin Galactic.

Space Perspective intends to be the most affordable option at roughly $125,000 per ticket, whereas Blue Origin and SpaceX so far have multimillion-dollar seat prices, and Virgin Galactic proposes prices over $250,000. Space Perspective plans leisurely, six-hour flights, whereas the other companies launch on rocket engines.

The test flight on Friday also carried a few science payloads, such as an ozone sensor for the physics department at the University of Northern Florida in Jacksonville and experiments proposed by high school students that were selected through Virginia-based non-profit Higher Orbits, according to Space Perspective.

The company's announcement also carried a note of congratulations from Frank DiBello, president and CEO of Space Florida, the state's development agency for space.

"We look forward to the coming milestones for Space Perspective as they prepare to take private citizens to space," DiBello said.

WHAT ABOUT DEATH PENALTY SUPPORTERS
Nearly 60 House Democrats oppose denial of communion to abortion supporters


A group of nearly 60 House Democrats signed a "Statement of Principles" opposing a plan by the U.S. Conference of Catholic Bishops to deny communion to lawmakers who support abortion rights. File Photo by Tasos Katopodis/UPI | License Photo

June 19 (UPI) -- Nearly 60 House Democrats signed a document opposing the Catholic church's plan to deny the sacrament to elected officials who support abortion rights.

In a "Statement of Principles" released on Friday, the lawmakers led by Reps. Rosa DeLauro, D-Conn.; Sylvia Garcia, D-Texas, and Brendan Boyle, D-Pa., described the vote by Catholic bishops in favor of a proposal to deny some lawmakers the right to participate in the tradition as "weaponization of the eucharist."

The document states that government "has a moral purpose" and noted that the co-signers are committed to Catholic principles such as reducing poverty and increasing access to education and healthcare.

They also said they support a separation of church and state, noting lawmakers have not been denied access to the sacrament for other stances that clash with the church's teachings.

"No elected officials have been threatened with being denied the Eucharist as they support and have supported policies contrary to the Church teachings, including supporting the death penalty, separating migrant children from their parents, denying asylum to those seeking safety in the United States, limiting assistance for the hungry and food insecure and denying rights and dignity to immigrants," they wrote.

Rep. Ted Lieu, D-Calif., called the Catholic church "hypocrites" for not seeking to deny former Attorney General William Barr communion for expanding use of the death penalty in a tweet on Friday.

"You are being nakedly partisan and you should be ashamed. Another reason you are losing membership," he wrote.

RELATED US Supreme Court rules Catholic adoption agency can refuse LGBT couples

The statement came in response to the U.S. Conference of Catholic Bishops voting 168-55 with six abstentions in favor of drafting a document to examine the "meaning of the eucharist in the life of the church," earlier on Friday.

The bishops debate surrounding the eucharist comes as President Joe Biden, just the second Catholic to hold the office, proposed a healthcare plan that would expand access to contraception and abortion and restore funding to Planned Parenthood, during his campaign.

US Catholic bishops vote to approve new guidance on communion



Rev. Bob Evans gives communion to parishioners at the Holy Spirit Catholic Church in Maryland Heights, Missouri. File Photo by Bill Greenblatt/UPI | License Photo

June 18 (UPI) -- Catholic bishops on Friday voted to develop new guidelines on communion in a possible step toward denying the sacrament to elected officials such as President Joe Biden who support abortion rights.

The U.S. Conference of Catholic Bishops, meeting virtually for its 2021 Spring General Assembly, voted 168-55 with six abstentions in favor of drafting a document to examine the "meaning of the eucharist in the life of the church."

The vote came following a lengthy and often emotional debate in which some bishops expressed strong reservations about the potential for the new guidelines to politicize the sacrament by denying it to Catholic politicians such as Biden who back abortion rights.

While campaigning for the presidency, Biden proposed a healthcare plan that would expand access to contraception and abortion and restore funding to Planned Parenthood. In addition, the plan sought to prevent states from passing laws to outlaw abortion.

RELATED Catholic bishops to consider communion guidance over abortion views

In a prerecorded opening statement, Bishop Kevin Rhoades of Fort Wayne-South Bend, Ind., chairman of the bishops' doctrine committee, said it was never their intention to "produce national norms for denying Catholics holy communion" but rather "to present a clear understanding as to why the church has these laws."

The proposed guidelines -- part of a larger effort to revive the institution of the eucharist among Catholics -- are also not meant as "a statement about any one individual or about any one category of sinful behavior," he added.

But Cardinal Blase Cupich, archbishop of Chicago, said there was "significant ambiguity" about the actual intention of the effort.

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"We have heard a number of bishops ... indicate, in fact, that it's time that we take a position with regard to these public officials receiving communion. So it's hard to know what direction you're going to go."

San Diego Archbishop Robert McElroy, meanwhile, warned that it will be "impossible to prevent [the eucharist's] weaponization, even if everyone wants to do so" and that it could become "a tool in vicious partisan turmoil."

If the church legitimizes "public policy-based exclusion" from communion, McElroy said, "we'll invite all political animosity into the heart of the Eucharistic celebration."

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The vote allows the bishops' doctrine committee to proceed with drafting the document and present it for discussion when the bishops reconvene in person in Novembe

LGBTQ RIGHTS ARE HUMAN RIGHTS

Thousands march in LGBT Equality Parade in Poland

Thousands of people participated in an LGBTQ Equality Parade in Warsaw Saturday amid what marchers described as rising homophobia in Poland. Photo by Leszek Szymanski/EPA-EFE

June 19 (UPI) -- Thousands of LGBT people and allies marched through the streets for the 20th Equality Parade in Warsaw on Saturday.

Participants waved rainbow flags outside of the neo-Gothic Palace of Culture and Science as a DJ played dance music while marchers sought to combat what they described as rising homophobia throughout Poland in recent years.

"The equality parade is a celebration of LGBT people and all those who have to fight for their rights," Sylwester Cimochowski, a 22-year-old marcher, told The Guardian. "Homophobia is a huge problem in Poland ... there are lots of people who can't cope with it, they kill themselves. The situation of LGBT people in Poland is tragic and that's why I'm here -- to support them."

Rafal Wojtczak, a representative of the Voluntary Service for Equality Foundation, expressed the opposition LGBT people have felt in recent years from police and the government under the role of the conservative United Right coalition.

"After two years, during which we have been hurt as the LGBT community of Warsaw, we are going out stronger, we are united," said Wojtczak.

Foreign ambassadors and several members of the Polish parliament took part in the march on Saturday, along with Warsaw Mayor Rafal Trzaskowski.

"This is a place where everyone smiles, no aggression," Trzaskowski said. "This the place where the heart of a smiling Poland is beating."

The 2020 Equality Parade was canceled as a result of the COVID-19 pandemic and in 2019 police used tear gas on crowds and arrested nearly 30 people in a September LGBT March.

Warsaw pride parade returns amid LGBT rights backlash


Issued on: 19/06/2021 

People with rainbow flags cool off in a sprinkler ahead of the Equality Parade, the largest LGBT pride parade in Central and Eastern Europe, in Warsaw, Poland, June 19, 2021. © Czarek Sokolowski, AP

Text by: NEWS WIRES

The largest gay pride parade in central Europe took place again in Warsaw for the first time in two years after a pandemic-induced break — and amid a backlash in Poland and Hungary against LGBT rights.

Warsaw Mayor Rafal Trzaskowski walked at the head of the Equality Parade on Saturday — a sign of support for LGBT rights by the liberal politician. Thousands of people joined the march and were cheered on by others waving rainbow flags from their apartment balconies.

But that level of acceptance is not universal in Poland, a heavily Catholic, largely conservative nation.

The joyful and colorful celebration was tinged with fear of what the future holds for the rights of gay men, lesbians, bisexuals and transgender people after setbacks first in Russia and now in Hungary.

“The day of the parade is always a bitter-sweet moment for our community," said Rafal Wojtczak, a spokesman for the organizers. He described feelings of sadness and helplessness that LGBT people have not achieved rights like same-sex partnership or marriage in Poland, while also facing new threats.

The parade comes days after Hungary's parliament passed a law that makes it illegal to show any materials about LGBT issues to people under 18.

Hungary's conservative ruling party portrayed the law as an effort to fight pedophilia. But human rights groups see it as a cynical tool that will stigmatize and discriminate against LGBT people, and prevent youth from accessing critical information.

Poland's populist ruling party has taken a political direction very similar to that of Hungary under Prime Minister Viktor Orban in past years, pushing conservative policies and tightening ruling party control over courts and media. The European Union has denounced both these two member nations, accusing them of eroding democratic norms.

One prominent Polish activist, Bart Staszewski, carried a Hungarian flag in Saturday's march. He said it was a message to the EU to act in defense of LGBT people because he fears that “Poland will be next.”

A year ago, the Polish LGBT community faced a backlash from ruling conservative politicians, local communities and the church. In his successful bid for reelection against a challenge from Trzaskowski, President Andrzej Duda declared that “LGBT is not people; it's an ideology” while also claiming that it was “even more destructive” than communism.

A Polish archbishop warned of a “rainbow plague.” And dozens of local communities in Poland were passing resolutions against "LGBT ideology” in what was described as an attempt to protect the traditional family. These were strongly denounced by EU officials and a handful have since been rescinded.

“We’ve been through a very, very rough time, but at the same time we are going out in the streets and we are saying we are stronger and we are not going to give up,” said Miroslawa Makuchowska, vice director of Campaign Against Homophobia.

Wojtczak said “our community has been used in a political war.”

At the start of the march, some people chanted a vulgarity against Poland's ruling party.

This weekend’s Equality Parade comes 20 years since the event was first held in the Polish capital. It was banned twice in its early years by a conservative mayor, Lech Kaczynski, who feared it would promote homosexuality, and last year it was canceled due to the coronavirus pandemic.

Since the first event in 2001, Polish society has become largely more open on the issue of gay rights, shaped by EU membership and cultural influences from the West.

This year's parade was smaller than the one in 2019 due to some pandemic restrictions.

(AP)

THIRD WORLD USA
Many 'high priority' patients not making it onto kidney transplant lists

By Amy Norton, HealthDay News

Many Americans who stand to benefit most from a kidney transplant may be missing a key window of opportunity, a new study finds.

The study focused on kidney failure patients who would be expected to live many years after receiving a kidney transplant. That generally includes relatively younger people without other major medical conditions.

In 2014, the U.S. kidney allocation system made changes to help ensure those patients receive a donor kidney that is likely to function for many years -- which typically means from a young, healthy donor.

A scoring system, called the estimated post-transplant survival, or EPTS, score, was introduced. Once transplant candidates are placed on the waitlist, they are given an EPTS score; those in the "top 20%" get priority whenever a particularly high-quality kidney becomes available.

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But the new study found that many patients who would fall into that category are not making it onto the transplant waitlist in a timely manner.

Of more than 42,000 U.S. patients who would score in the top 20%, fewer than half were on the waitlist. And among the 34,000-plus who'd started kidney dialysis, only 37% were waitlisted for a transplant within three years.

"It's extremely discouraging," said study leader Jesse Schold, a researcher at the Cleveland Clinic in Ohio.

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These are patients who are very likely to do well after a transplant, he said. But by the time they get on the transplant list, many will no longer have a top EPTS score.

In fact, Schold's team found, of dialysis patients, 61% fell out of the top 20% group within 30 months. And, as seen throughout U.S. health care, there were disparities: Black patients and those from low-income groups were less likely to be waitlisted.

The findings were published online this week in the Journal of the American Society of Nephrology.

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Kidney transplant is considered the best option for most people with end-stage kidney disease, or kidney failure. Currently, more than 90,000 Americans are on the donor-kidney waitlist, according to the United Network for Organ Sharing, or UNOS, the nonprofit that manages the nation's donor organ system.

"It's much better to be referred for a transplant before you need dialysis, which is called preemptive waitlisting," said Dr. Joseph Vassalotti, chief medical officer of the nonprofit National Kidney Foundation. "Unfortunately, that doesn't happen enough."

The current study, he noted, looked at patients who would be optimal transplant candidates -- all with EPTS scores in the top 20% and an average age of 38.

"They should have a very high percentage of placement on the waitlist," Vassalotti said.

Yet of the 42,445 patients, only about 7,900 were preemptively waitlisted. The rest -- more than 34,500 -- started dialysis sometime between 2015 and 2017, and only 37% moved onto the transplant waitlist within three years.

Ideally, the issue needs to be addressed far "upstream," Schold said -- meaning more Americans with kidney disease need access to optimal care well before their kidneys fail.

Vassalotti said racial and income disparities in waitlisting might, at least in part, be related to lack of access to specialized kidney, or nephrology, care -- whether it's because primary care doctors are not referring patients, patients cannot afford it, or there are few specialists in patients' local areas.

But Vassalotti also said doctors need to do a better job of communicating about the benefits and risks of transplant versus dialysis. And those discussions, he said, should happen early, so patients can be "empowered" to plan for what they want when their disease progresses.

Darren Stewart, principal research scientist with UNOS, said the EPTS score has helped better "longevity match" transplant candidates with donor kidneys. Donor kidneys, themselves, are also subject to a scoring system.

"But this study highlights the disparities in access to the waitlist in the first place," Stewart said.

He noted that UNOS does not have the ability to create policies on what happens before patients are waitlisted. But he agreed that both better access to nephrology care, and better patient education about transplants, are needed.

Schold also said that education is critical, but the process of getting on the waitlist could be made less cumbersome, too.

He pointed to the idea of an automated system that refers all patients with late-stage kidney disease for a transplant - or at least a subset of patients, such as those who would have a top 20% EPTS score.

"We have to make these processes easier," Schold said.More information

The National Kidney Foundation has more on kidney transplantation.

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