2022 Impact Outlook

Written by
Alyssa Farrelly
Published on
January 12, 2022
Category
Impact

It's been another whirlwind year, while still dealing with the pandemic and its effects on society. With all that happened last year, concerning developments such as rising inequality and an uptick in severe natural disasters could have been easily cast aside. Instead, we saw a continued rise in capital flows to sustainable investment strategies, impact investments, and philanthropic organizations to address many of these urgent challenges. We also recognize there is a lot more for us to do alongside others to help shape the world and the financial sector we wish to see.

Fire Capital has been working hard to help clients drive capital for good across their investments and giving. We also made a lot of progress this past year with our efforts to be a more responsible business. Our team is proud to have had the ability to support nonprofit organizations that are moving the needle in areas that our team is passionate about, such as increasing access and diversity in the financial industry, advocating for educational equity and more. We are excited to share these updates with you!

We are a Certified B Corporation!

In September 2021, we officially became a Certified B Corporation (B Corp). B Corps are certified by the nonprofit, B Lab, and meet the highest verified standards of social and environmental performance, transparency, and accountability. Unlike traditional corporations, B Corps are legally required to consider the impact of their decisions on all stakeholders (e.g., workers, suppliers, the community, customers, and the environment). It was a rigorous year-long process to complete and we were proud to receive a score of 120.9 out of 250 (The median score for businesses in our industry is 81.3 and 80 qualifies for B Corp Certification). We challenge ourselves to continue to improve our score in the future. Check out our official announcement for more information.

Fire Capital Impact Fund

As part of the Pledge 1% movement, we’ve committed 1% of our annual revenue and time to causes that we care about. This year, we formalized our impact fund into a Donor Advised Fund and were honored to give back to five great organizations in our targeted cause areas: women & girls empowerment, diversity in the financial industry, education & economic opportunity for all, and the environment.

  • Improve Your Tomorrow (IYT): IYT is based in northern California and advocates for educational equity and provides guidance and support to young men of color, getting them to and through college. Our Managing Partner, Michael Firestone, also spoke at IYT's summer Entrepreneurship Academy for their "REAL Talk - Life of an Entrepreneur" workshop with a group of high school and college students. He shared his entrepreneurship journey, how he got into the financial industry and tips on getting started.
  • Girls Who Invest is dedicated to increasing the number of women in portfolio management and executive leadership in the asset management industry. They are creating a pipeline of talented and motivated young women who are prepared to succeed in the industry through intensive educational programs, a meaningful paid internship, and a robust on-going community.
  • Youth Investors Society (YIS) provides a free online high school enrichment curriculum that teaches financial literacy through interactive courses, lessons and programs that teach the fundamentals of earning money, saving, budgeting, banking, investing, career exploration. The YIS Access Initiative provides these programs to schools in under-resourced communities.
  • Accion International is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. They catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector.
  • Environmental Defense Fund (EDF) is dedicated to protecting the environmental rights of all people. EDF is known for its work on issues including global warming, ecosystem restoration, oceans, and human health, and advocates using sound science, economics and law to find environmental solutions that work.

Sustainability Policy

This past year, we formalized and implemented our Investment Sustainability Policy which describes how we are embedding sustainability into our business and investment practices. To make informed investment decisions, we leverage the use of ESG (Environmental, Social, Governance) data, such as MSCI ESG Research and Morningstar Direct Sustainalytics ESG Ratings, which has become an important and useful tool. Specifically, this data helps provide deeper insights into investments - some of which are financially material factors that will help us achieve better investment outcomes over the long-term. We believe that material sustainability or ESG issues can have a lasting positive or negative financial impact on businesses. Businesses and companies that manage these issues well can avoid negative externalities and minimize reputational and financial risk.

Exhibit A and B below show how our proprietary equity strategies ranked in ESG ratings and our top five UN Sustainable Development Goal (SDG) exposures.

EXHIBIT A

EXHIBIT B

Proxy Voting

Proxy voting is an important component to maximize both shareholder and stakeholder value and can be a powerful method to create positive change in corporate behavior. This year, we hired Institutional Share Services (ISS) and adopted their Sustainability Proxy Voting Guidelines policy to align our client's proxy voting with environmental, social, and governance (ESG) principles. This was a big step to further support our goal to achieve long-term and sustainable growth for our clients.

Philanthropic Support for Our Clients

Outside of managing client portfolios, we also provide services to support our clients with their philanthropic goals through charity research and due diligence, grantmaking strategy, and Donor Advised Funds (DAF) and foundation administration. In 2021, our clients granted out over $1.3M supporting initiatives such as poverty alleviation, women & girls empowerment, health and education.

This year, our team partnered with Geneva Global, a philanthropy consulting company, to support our work with our clients on areas such as developing a global grantmaking strategy and sector & regional landscape research. Our team also worked with 21/64, a nonprofit practice providing multigenerational advising, facilitation, and training for next generation engagement, to participate in their advisor trainings to further develop our own skills and abilities to better serve our clients.

Future Forward

In 2022, we are excited to kick off a workshop series to walk clients through developing their impact vision and how they can make the impact they seek to make with their giving and investments. Themes will include identifying what values motivate your philanthropy, charitable giving tax planning benefits, sustainable investing, and cause area deep dives based on what you are passionate about and how to make a more meaningful impact. Stay tuned for more information soon.

We are so grateful for our community of clients who have a desire to invest toward a better world through their investments and philanthropy. We look forward to all that is to come in 2022 and we will continue to share our journey with you!

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Fire Capital Management is a boutique investment management company that helps people achieve their dreams. We empower our clients to re-imagine what is possible to accomplish with their investments, social impact goals, and legacy. The firm offers private wealth management and multi-family office services to HNW individuals, families, and foundations.

Disclaimer

The information in this report was prepared by Fire Capital Management. Any views, ideas or forecasts expressed in this report are solely the opinions of Fire Capital Management, unless specifically stated otherwise. The information, data, and statements of fact as of the date of this report are for general purposes only and are believed to be accurate from reliable sources, but no representation or guarantee is made as to their completeness or accuracy. Market conditions can change very quickly. Fire Capital Management reserves the right to alter opinions and/or forecasts as of the date of this report without notice.

All investments involve risk and possible loss of principal. There is no assurance that any intended results and/or hypothetical projections will be achieved or that any forecasts expressed will be realized. The information in this report does guarantee future performance of any security, product, or market. Fire Capital Management does not accept any liability for any loss arising from the use of information or opinions stated in this report.

The information in this report may not be suitable or useful to all investors. Every individual has unique circumstances, risk tolerance, financial goals, investment objectives, and investment constraints. This report and its contents should not be used as the sole basis for any investment decision.

Fire Capital Management is a boutique investment management company and operates as a Registered Investment Advisor (RIA). Additional information about the firm and its processes can be found in the company ADV or on the company website (firecapitalmanagement.com).

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Disclaimer

The information in this report was prepared by Fire Capital Management. Any views, ideas or forecasts expressed in this report are solely the opinion of Fire Capital Management, unless specifically stated otherwise. The information, data, and statements of fact as of the date of this report are for general purposes only and are believed to be accurate from reliable sources, but no representation or guarantee is made as to their completeness or accuracy. Market conditions can change very quickly. Fire Capital Management reserves the right to alter opinions and/or forecasts as of the date of this report without notice.

All investments involve risk and possible loss of principal. There is no assurance that any intended results and/or hypothetical projections will be achieved or that any forecasts expressed will be realized. The information in this report does guarantee future performance of any security, product, or market. Fire Capital Management does not accept any liability for any loss arising from the use of information or opinions stated in this report.

The information in this report may not to be suitable or useful to all investors. Every individual has unique circumstances, risk tolerance, financial goals, investment objectives, and investment constraints. This report and its contents should not be used as the sole basis for any investment decision.Fire Capital Management is a boutique investment management company and operates as a Registered Investment Advisor (RIA). Additional information about the firm and its processes can be found in the company ADV or on the company website (firecapitalmanagement.com).

CFA® and Chartered Financial Analyst® are trademarks owned by CFA institute.

Alyssa Farrelly