Interviewed by Cliff Feigenbaum, founder of GreenMoney Journal
One of the more enjoyable tasks at GreenMoney is interviewing true leaders in our world.
This issue features Philippe Cousteau, the son of Jan and Philippe Cousteau Sr. and grandson of Captain Jacques-Yves Cousteau. As a member of this legendary family, Philippe is continuing the work of his father through EarthEcho International (http://www.earthecho.org ), the non-profit organization he founded with his sister and mother and which he serves as President. His goal is to engage and empower people to take action for a brighter future. His tools are simple—education, balanced advocacy, and commitment to action.
In this, his first GMJ interview, he has much to share. He begins with the new venture that brings together business and the environment, and closes with a look at the next 20 years.
GMJ: It is great to hear that you and AdvisorShares are launching the Global Echo ETF this year. Tell us more about it.
PHILIPPE: The Global Echo ETF (GIVE) is the culmination of three years of work where I have tried to find a way to leverage financial markets and Wall Street to do ‘good’. It all started during a casual conversation I had with a friend of mine in New York. I was lamenting the state of the economy and how difficult it is to raise money for important causes. He said to me, “have you ever thought about getting involved in financial markets?” I confessed that I hadn’t thought about it and we moved on to other subjects. But the idea stuck with me and I began asking questions and learning, and realized that there just might be an opportunity. After more than a year of networking and learning about different types of funds, I happened to meet the guys at AdvisorShares. I had decided against hedge funds, or private equity funds or venture funds even though some folks had offered to help me start some simply because I wanted to create something that everyone could participate in, not just wealthy accredited investors. That is when I learned about Exchange Traded Funds (ETF’s). Originally the AdvisorShares team was doing a favor for a mutual friend by telling me about ETF’s as part of my personal research to learn about markets, but it quickly became apparent that we shared a common vision for finding a way to change the world. From the beginning, I wanted to find a way to support sustainable investing but also generate new philanthropic dollars immediately and over the course of a few months the structure of GIVE took shape to do just that.
GMJ: Tell us about the partnership with AdvisorShares. Why them and why an ETF and not a mutual fund?
PHILIPPE: What I really liked about AdvisorShares was that their business model always anticipated some sort of sustainable venture. When we met and learned of our mutual goals it was a match made in heaven. I also liked the fact that they were a young organization, ready to innovative and shake things up. ETF’s appealed to me because they are simple, transparent and easy for anyone to invest in. My life is dedicated to helping people find hope and understand their potential to change the world. From classroom education, to television, to books, live events, and even designing educational and sustainable buildings, I have always looked for ways to help people take action. Now I am turning my attention to financial markets. If you can buy a stock on the NYSE you can buy GIVE. From high net worth individuals to kids who want to start investing with the $100 birthday money from their grandparents, they can invest in the market and change the world.
GMJ: What is the focus of your Global Echo Foundation and how will the new ETF help the foundation further its mission(s)?
PHILIPPE: The Global Echo Foundation is being founded in tandem with the Global Echo ETF. Its goal is to provide funding solutions to many of the challenges facing the world community, from social issues impacting women and children to environmental conservation, as well as to support social entrepreneurship, like micro-credit programs.
GMJ: So, this venture represents a dual mandate in both public and private markets. How will the public product be managed and who will make the investment decisions? Who is this investment product suitable for?
PHILIPPE: Correct, the Global Echo ETF (GIVE) will fund the Global Echo Foundation by contributing 40 basis points of its management fee. AdvisorShares and the four sub-advisors hired to deploy their particular expertise in Sustainable Investment will manage the public product. First Affirmative Financial Network (FAFN) will serve as the allocation manager, deciding when allocations to each manager should be added or subtracted. Each sub-advisor manages very large sums of money for institutional and retail clients and has done so for many years with great success. We have two global equity managers; Reynders McVeigh focuses on publicly traded companies that have sustainable corporate mandates and Baldwin Brothers invests in its High Water Global strategy, with its global sustainability themes based on work by Paul Hawken (clean energy, new technology, etc). Additionally, fixed income manager Community Capital will invest in sustainable fixed income opportunities and FAFN the alternative manager that will employ a long/short strategy that invests in ESG, SRI and sustainability themed ETFs and will short out market beta with inverse or short ETFs. As mentioned previously, this product is designed for any investor who wants to make a difference in the world!
GMJ: What have you seen over the years that has challenged the capital raising environment for not-for-profits and why have you embraced financial markets for this new endeavor?
PHILIPPE: As we struggle with a depressed global economy, philanthropic dollars have dried up. Even though the non-profit industry employs more people than the financial services and car industries combined, we never got a bailout. The old model of raising money is insufficient to drive the kind of dollars we need to solve our greatest challenges so we need to find new and innovative models.
GMJ: We’ve heard so much about Business and Environment as an either/or. How do you see Business and the Environment working together for a sustainable, even restorative, future?
PHILIPPE: It is true that this absurd notion still plagues the world but I believe that is changing. We are not just investing in green energy and technology. There are a lot of companies out there with responsible environmental, social, and governance (ESG) policies and yet they are large successful companies and great investments. A sustainable company manages risk well because public and governments around the world are becoming more aware and responsible, and they expect corporations to do the same. A good ESG policy is just good business. It leads to higher employee retention, less risk of legal action, cheaper mitigation costs, and better marketing opportunities. Often, initiatives like energy efficiency, water efficiency, etc., lead to lower operating costs and fatter bottom lines. They just make good sense.
GMJ: You are on the front lines in the environment, specifically in our oceans. What are you seeing out there? How can we better protect the oceans?
PHILIPPE: It’s simple; the oceans are the life support system of our planet. They provide most of our oxygen and a huge percentage of our protein, and they regulate our climate. Without healthy oceans, humans will be unable to thrive on this planet. My father and grandfather had a simple dream “That every child born has the right to breath fresh air, drink clean water and walk on green grass under a blue sky.” I share that dream and know that if we don’t ensure that healthy oceans exist, that dream won’t happen. The world’s population is 7 billion this year, with an estimated 2 billion more people coming to this planet in the next 40 years. If we are going to feed, clothe and power these people we have to find a better way. There just isn’t enough stuff to maintain the status quo, – not enough food, water, or raw materials. For example, food production will have to rise by seventy percent by 2050 to keep pace with population growth. Old solutions like adding fertilizer are less effective; there are no new water sources and people are eating more meat while wasting more food. Unless these problems are solved we will add 2 billion more people to the current 1 billion that go to sleep every night hungry. Businesses who solve those problems will own the markets of the future.
GMJ: With the Cousteau family legacy of raising awareness and protection of the Natural World, what do you see as the steps we need to take in the next 20 years to ensure a healthy global ecosystem?
PHILIPPE: The fundamental challenge today is population; most of the coming two billion people will be born into poverty near the regions of the world that will be most affected by climate change; we cannot have environmental sustainability unless we have human sustainability. That is why the Global Echo Foundation is focused on three critical solutions. The first is investing in social entrepreneurship with a focus on micro-credit, essentially the old adage of teaching a human to fish, not just giving them a fish. We believe in the desire of people to build a better life for their families and we want to build on the success of that movement to help them do so. Second, we are investing in environmental education; we cannot have a sustainable world without generations of youth who understand their responsibility and power to change the world. The third is investing in women. My grandfather always told me that the key to sustainability is investing in women. We know that women invest their money in educating themselves, their children and feeding and supporting their families. It’s about empowering women with respect and choice. Those are the key solutions, in my opinion, to the problems facing this world. These are the solutions that investing in GIVE will support. It is a simple way for people to invest in the market and change the world at no cost to themselves because the fund’s money comes out of management fees that they would pay anyway. For responsible investors, it is the closest thing to having your cake and eating it too.
Photos courtesy of Philippe Cousteau
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