Beth Bafford is the vice president of strategy at Calvert Impact, a global nonprofit investment firm that focuses on impact investing. The firm’s strategy involves “providing positive social and environmental impact and financial returns — without compromising either.”
For as low as $20, individuals can invest in solutions to inequality and climate change in communities worldwide through the firm’s Community Investment Note. Its Cut Carbon Note, which requires a minimum $1,000 investment, allows investors to “help protect the planet by changing the way we build.”
“We’re a nonprofit organization focused on direct, social environmental mission,” Bafford said. “Our focus is really on democratizing access to impact investing for investors, and then making sure those funds are going to direct, social and environmental impact in communities in the U.S. and around the world.”
Here is more of my recent conversation with Bafford from “The Impact” on FinTech TV (Watch the full interview).
Jeff Gitterman: So before we dive into the fund and all the great work that it does, give me a little bit about your aha moment that drove you into Impact.
Beth Bafford: I am from a family of small business owners. My grandfather ran a small jewelry store in Salisbury, Md. My dad built and ran small businesses. My mom was one of the few female stockbrokers in the ’80s and built her business. And their hard work is really what sent me to school and college and allowed me and my sister to have access to an amazing education and opened all the doors that I had opened for me.
But after a brief stint in financial services, I decided to leave and become a community organizer. And when I did that, I was really exposed to people of different backgrounds, experiences, walks of life, and realized that the American dream that my family had access to was not accessible to everyone. And the reason behind that was because of the financial system, how it works, who has access to capital, who has access to credit, who’s able to build and grow businesses and send their kids to college.
So it was at that moment that was my aha moment, what I really wanted to make sure I was devoting my career to making our financial system more equitable, more sustainable.
JG: We’ve seen a lot of large firms, Apollo, KKR, launch energy transition funds, and the billions of dollars, which leaves behind any chance for the small investor to participate in a clean energy transition. How has Calvert Impact trying to address those issues and give accessibility to the average investor?
BB: We want people to have the ability to see the future that they want through their financial portfolios, which is not usually a place where people think to enact change. They think of how they vote, how they purchase things … what car they drive, where they donate. But there’s this enormous amount of latent assets sitting in savings accounts and retirement accounts that have the power for enormous change that are not often activated. And that’s really our job is to provide the tools to activate those dollars.
JG: In the Inflation Reduction Act there was $27 billion that was allocated towards communities most impacted by climate change. Can you talk about that a little bit? I think people don’t hear much about that side of the bill and what Calvert is doing to engage with that.
BB: It’s called the Greenhouse Gas Reduction Fund. It’s a program that’s being administered by the EPA. And the purpose is really to recognize that we have to transition. We have to transition from fossil fuels and go into clean energy future. But when we do so, we have to make sure that that’s an equitable transition. The program recognizes that low income and disadvantaged communities across the country are not just most at risk from the impacts of climate change, but they’re also most potential to benefit from the transition, from clean energy jobs, from small businesses who have opportunities to get contracts from clean air benefits for families and kids, economic savings for people’s pocketbooks when they reduce their energy costs. And those benefits need to accrue to all of us in order to make this transition possible.
JG: So does this fold into Calvert’s launching of Climate United ?
BB: Climate United is a coalition between Calvert Impact and our at the Community Preservation Corporation and Self-Help, which is a family of credit unions and nonprofit loan funds based in the South. And we all came together to put together an application for the $14 billion National Clean Investment Fund competition of the Greenhouse Gas Reduction Fund. Tere’s a competition that is going to be awarded to two to three partners, and it’s essentially capitalizing national investment funds focused on the clean energy transition, particularly in low income and disadvantaged communities.
So how do we make sure that this investment from the federal government is not just one thing that requires ongoing subsidy, but we’re using it to train the credit markets to be more broadly accessible? That’s really the coalition we’ve built.
There’s three focused technologies of the program. One is distributed generation, so largely solar, wind, other forms of renewable energy generation and storage. Two is building decarbonization. looking at how we electrify buildings, reduce electricity usage and electrify all end users in buildings. And then three is electric transportation, how do we put more electric vehicles on the streets and accelerate that transition?
JG: Just trying to help advisers get a sense of when would they introduce their clients to Calvert Impact products? What is the story behind why it’s so important to be funding?
BB: It ends up being a really personal discussion between advisers and clients in terms of what they want to be seeing from their investment portfolios and their philanthropy. And I think that often starts with that values conversation. It starts with what do you care about? What legacy do you want to leave? What do you want to leave for your kids? And what we see a lot of in this space is that those conversations get illuminated when the next generation enters the conversation.
It’s often the younger generations that are coming in looking at how dollars are invested and where there’s a possibility because for most young people across the country, this is not a trade-off. This is a certainty that you want to have a career with an impact, that you want to invest with an impact, that you want to make purchases and life decisions that have an impact. So it’s really become an easier conversation when there’s a multigenerational family looking at what impact they want to make.
JG: What gives you hope in the current environment?
BB: Oh, man. I have a lot of hope. 2023 was a tough year for capital raising. But we and our partners in Climate United and the potential of this program, there’s really so much excitement in 2024 and beyond, because I think we are in this moment of unprecedented federal investment in low-income communities and in trying to support a more transparent and equitable financial system with the SEC disclosures and regulations coming through with obviously the impacts from the European regulations, with new products and a lot of grassroots movement. There are certainly headwinds, but we see just so much opportunity and so many people getting off the sidelines and deciding to do something about it. And I think 2024 is just going to continue that path, and I think we have better days ahead.
Read more: Keeping sustainability front and center in the investing world.
