Episode S1E2 - Lisa Hayles, Investment Manager, interview on ESG and Coffee Podcast, 22 July 2021

When you enjoy your work, it’s easy. Interview with Lisa Hayles, Investment Manager at Trillium Asset Management by Graham Sinclair on ESG and Coffee Podcast. PHOTOCREDIT: ESG and Coffee Podcast, 2021. — **When you enjoy your work, it’s easy.** Interview with Lisa Hayles, Investment Manager at Trillium Asset Management by Graham Sinclair on ESG and Coffee Podcast.
PHOTOCREDIT: ESG and Coffee Podcast, 2021.

OUR GUEST in S1E2: LISA HAYLES, INVESTMENT MANAGER at TRILLIUM ASSET MANAGEMENT.

I am pleased to welcome to the ESG and Coffee Podcast one of the originals making ESG+ investment happen, Lisa Hayles, Investment Manager at Trillium Asset Management in Boston MA, USA.

HOW WE MET: I first met Lisa in London in the 2000s when she was working for one of the original ESG research and analysis shops (EIRIS, now owned by Moodys ESG) and we once shared a late night black cab ride adventure with colleagues across the City.

WHAT YOU WILL LEARN: In this interview you may be as impressed as I am by Lisa’s thoughtful responses, and her enthusiasm for the work. She sees no trade-off between growing investment returns for her clients by selecting portfolio companies that are meeting the needs of society within the planetary boundaries. She has been a leader in helping create pathways for those who have not had privileged access to the investment field; maybe she has helped you? When I asked Lisa to “go to the edge” at GreenFin 21 in the justice/ equity/ diversity/ inclusion (JEDI!) session, she did. Lisa spoke frankly about her own journey and the poor diversity in our industry in a way I had never heard at an event. She’s on the leadership team of the Racial Justice Investing Network. In this conversation you will hear how Trillium uses a team of 5 in advocacy engaging with 1,089 portfolio companies, including Alphabet in 2021 proxy season when they sought improved whistleblower protections after the drama at the AI unit. Lisa is happy to be the “pesky investor asking questions” as she is an ally with internal changemakers because external voices help the work of internal changemakers, on issues from diversity to waste management to Arctic drilling to NOT financing the climate change. Lisa makes the case for systems-level thinking in that investors need a functioning democracy to ensure better investment prospects.

Listen for all the experience that Lisa shares so generously. Celebrate Lisa’s career highlight when she helped a large family office of three generations shape their sustainable investment strategy.

Here is my interview with Lisa Hayles. She’s one of the originals.

DISCLAIMER: Not investment advice, do you own research.

SELECTED HIGHPOINTS FROM S1E2

Here’s a brief summary of our interview, which I talk through at the end of S1E2.

1. Lisa works to gather assets to be invested by the portfolio managers at Trillium. A long-standing specialist ESG+ firm, Trillium is an active investment manager, not a passive tracker of a shelf of portfolio companies, or a brewing company(!). The active management covers how they select companies to invest in, working with their world view that excludes certain companies or industries because of their negative social or environmental performance, and investing into firms with positive ESG performance. Engagement is her “true love”. The work of active investors who know that ESG factors are not properly weighed in business-as-usual investment valuations, means we need to engage with portfolio companies as well as policymakers. Trillium joined a group of more than 150 businesses calling for the passing of the John Lewis Voting Rights Advancement Act. Trillium is recognized in the investment industry for its shareholder advocacy work. In my Villanova Exec Ed sustainability class this past June, I used the example of Alphabet’s 2021 shareholder meeting (listen on YouTube), where Trillium’s shareholder proposal at seeking a third-party audit of whistleblower protections for workers partly related to events in their AI unit where leaders were fired for publishing (see WSJ story).

2. The Trillium approach is marketed as “ACTIVE PORTFOLIOS, GLOBAL IMPACT: Putting Assets into Action since 1982.” The Trillium SEC filings including Form ADV 2021 describes the process “We begin with a universe of liquid, publicly traded, U.S. stocks and ADRs with market capitalizations greater than $250 million and that pass our base exclusionary ESG criteria...We conduct a financial and business model review, evaluating the following characteristics: Financial Returns on Investment, Business Strategy Strength, Growth and Earnings Quality, Profitability and Efficiency, Financial Leverage.” Trillium Asset Management is now owned by Australian listed financial services firm, Perpetual Ltd, but remains a certified B Corp. With over $4.3 billion in assets under management (as of 3 March 2021), Trillium offers investment strategies and services that “advance humankind towards a global sustainable economy, a just society, and a better world.”

3. Lisa’s favorite investment movie is The Big Short (2015), and especially the cameo explainer segments like Margot Robbie’s memorable scene in the bubble bath. Trillium evaluates and scores companies on their ESG performance, which their analysts use to determine the companies available in our universe and the companies we wish to include in our buy‐list.” according to the SEC Form ADV 2021. And I appreciate her enthusiasm for how Starbucks $SBUX has responded and plans to make drastic reductions in waste by 2030. Let’s track that.

4. Lisa talks about the significant work of mapping diversity at portfolio companies. The highlights of that research is now on their website, Trillium’s 2021 Investment Team Racial Equity Project: Overview and Outcomes advocating diversity “inclusive of gender and race, is essential and a critical attribute of a well-functioning organization.” This work is impressive for having tracked all portfolio companies, benchamrking their diversity practices. Lisa explains that a hero is the human who worked to free inmates on death row whose convictions were suspect, Bryan Stevenson, whose story that became the book and movie, “Just Mercy” (2019). The intersection of issues is reflected also in Trillium’s subsequent SEC filing on June 16, 2021 titled Trillium Responds to SEC’s Request for Input on Climate Change and ESG. Climate, COVID and racism are intertwined crises that affect all investors.

UNEXPECTED: New to me was Trillium Asset Management engaging with 1,089 portfolio companies in the past year. That’s a lot. Trillium was one of the 80 investors representing over $620 billion in assets that led to the decision announced on 13 On July 2020 that the Washington American football team was retiring its name, mascot and logo, a direct result from engagement with sponsors and shareholders as well as decades of Native-led advocacy.

FINALLY: I hope you too were uplifted by Lisa’s positive attitude and optimism. Follow Lisa on Twitter and LinkedIn. She’s very busy, but you can learn a lot from watching her work.

Thank you for listening.
Please follow on Twitter @ESGandCoffee for news on S1E3 and to recommend any compelling humans we may interview in Season 1: The Originals.

GS | @esgarchitect | 22 July 2021.

LINKS

Quarterly update on Trillium strategies https://documents.trilliuminvest.com (including impact reports at the strategy level).

SEC Investment Advisor Info https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=700884

Form ADV https://reports.adviserinfo.sec.gov/reports/ADV/110901/PDF/110901.pdf

Trillium Overview https://www.trilliuminvest.com/documents/firm-overview

Trillium Carbon Footprint Analysis https://www.trilliuminvest.com/global-equity-documents/carbon-footprint-analysis

Trillium Environmental Footprint Analysis https://www.trilliuminvest.com/global-equity-documents/environmental-footprint-analysis

Fossil Fuel Free Core Strategy www.trilliuminvest.com/fossil-fuel-free-core/quarterly-commentary

Sustainable Opportunities strategy www.trilliuminvest.com/sustainable-opportunities-documents/factsheet

PRI Transparency Report https://reporting.unpri.org/surveys/PRI-reporting-framework-2020/F5914509-42F1-43FC-988D-85E914F72C51/79894dbc337a40828d895f9402aa63de/html/2/?lang=en&a=1

Trillium White Papers https://documents.trilliuminvest.com/