EPISODE S1E8: INTERVIEW OF Liz simmie, Co-Founder, Honeytree Investment Management

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Written By esg and coffee
 

Liz Simmie, Co-Founder, Honeytree Investment Management is our next guest in conversation with Graham Sinclair on ESG and Coffee Podcast. We do talk bees, the hive mind, adventures of an investment practitioner, and the ESG performance of mega-banks.

PHOTOCREDIT: Liz Simmie via LinkedIn, 2022.

OUR GUEST in S1E8: Liz Simmie, Co-Founder, Honeytree Investment Management.

I am pleased to welcome to the ESG and Coffee Podcast my next investor guest, Liz Simmie, in episode 8 of our series one of long form interviews, “The Originals”. I first met Liz through #fintwit where she was not afraid to speak directly to what investment practitioners do well, and how ESG is and is not meeting the moment. One day we will enjoy a coffee together in one place. She is describe @LizSimmie as: “co-founder @honeytreeinvest - long only concentrated responsible growth - elder millennial - subtweeting and doing real esg and active management” and @LinkedIn: “Advocate for investment industry transparency, strategic leadership, understanding impact, and making decisions based on data”. Like all my interviews, this is no a boring conversation.


HIGHPOINTS:

  1. Context is everything in life, and in investment. I respect the way Honeytree Investment is clear on the historical context of where they base their operations. The website states plainly: “We are proud to live, work, and play on the traditional territory of the Mississaugas of the Credit First Nation, and the ancestral lands of the Haudenosaunee and the Huron-Wendat.” Like the New Zealand and Australia industries, the Canadian investment industry is doing a better job than most jurisdictions in recognizing the history of how the economy was built, by whom, and at what cost. The better approach is looking for routes to include those historically excluded. In Canada the Reconciliation and Responsible Investment Initiative (RRII) is a partnership between NATOA (a charity organization committed to providing opportunities for Indigenous Peoples of Canada) and Shareholder Association for Research & Education (not-for-profit organization for responsible investment services, research and education, based in Vancouver, Canada, where it describes its location as “Unceded territory of the xʷməθkwəy̓əm (Musqueam), Skwxwú7mesh (Squamish), and Səl̓ílwətaʔ/Selilwitulh (Tsleil-Waututh) Nations”. When you launch a new investment firm in the 21st century, you have the opportunity to write a new story, facing all the facts of history and you build from your purpose.

  2. Let’s talk about diversity. You can feel most shrink when Liz talks candidly about the poor state of diversity in the investment profession. Her article “How Bad Is Diversity In The Investment Management Industry?” for Benefits and Pensions Monitor in February 2020 will make most financial firms pause, and look uncomfortable. Is she wrong? The Honeytree quarterly report had an unusual story, on a mid-West USA manufacturing company you may think would be amongst the last one to receive plaudits for its diversity in a 45 name portfolio: “Measurable impact from companies in our Global Equity Strategy. Note that they all impact both stakeholders and the bottom line. Illinois Tool Works (ITW) has made diversity an organizational priority, and they have been able to execute on it. In the two charts on the right, we can see their year over year change in ethnic and gender diversity in leadership roles. This level of organizational change creates real impact on the firm, employees and communities.” In this conversation I find myself quoting Bob Marley’s “Redemption Song” (see the legendary performance in Harare, Zimbabwe 1980) when we discuss Adidas, which enjoyed the hairdryer treatment in the Honeytree Annual Letter To Investors, 2020 despite it doing some good sustainability things: “Companies reacted poorly under stress – this was the case for Adidas which was sold in the fall. Adidas made numerous fumbles in 2020 not limited to having to step back from a government debt offering because it would limit their dividend, and having their head of Diversity resign for a lack of understanding of inclusion.” Ms Simmie was unimpressed with my question on ice hockey, however.

  3. Twitter is where the conversation is at (and ESG and Coffee is there, obvs). Liz laughs when I asked “what app are you most likely to be on” because we both know her voice is clear, loud and present on that free website. See for example her calling on colleagues in the investment profession to see the discrimination, some months after our interview in September 2021: “So while tons of folks care and even know how to change the industry, they are not on positions of power and the folks that are 1 - don’t fully recognize the issues, 2 - don’t know what to do about them.” Twitter remains a forum where one may engage across distance with experts, if one is able to/ remembers to dodge the trolls and the bots and the impostors. Personally, I need Liz to question her ranking pumpkin pie as the best kind of pie, but her idea of perfect happiness seems good around about now. What do you think?

  4. Question everything. Liz’s encouragement is not to believe whatever promises are made or count whatever initiatives investment firms are signed up to. She clearly has experience that asset gathering by investment firms is marketing, and where this is marketing there may be BS. Unless the firm can show you what they do, and how. Liz explains how “stakeholder governance” is the business approach that underpins their approach to investment, their philosophy before the security selection deep dive work begins. Ask the investment firms how they use gender diversity data in security selection process. Liz’s answer to the Goldilocks Question (on that day’s price of $TSLA) was crisp - Honeytree Investment does NOT invest in firms that settle with the SEC (ouch!); Elon Musk settled SEC fraud charges in 2018 by paying $20m fine and losing his Chair position. This is the first episode where a guest talks jargon. I try and have Liz explain what “quantamental” means, as in the Honeytree Global Equity Investment Process, 2021: “quantamental approach uses quantitative tools alongside a fundamental deep dive to find companies who are stakeholder governed, long term focused, and growing consistently. The companies we hold make a net positive impact on the world and outperform as a result of their purpose-driven, stakeholder focused growth.”


Stay after the close for our BONUS TAPE where we kick back with some reflections on the interview. Liz expands on impact and how it applies in the publicly listed company space: every company has negative externalities. And there is a huge amount of opportunity available in solving society’s and Nature’s problems created by conventional business practices.


If you enjoy the podcast, please post a 5 star review wherever you enjoyed it. If not please DM me @esgarchitect.

Let us know on Twitter @ESGandCoffee what compelling investment humans we should interview, and to stay posted on upcoming episodes. 

Thank you for listening.

GS



@esgarchitect

Host of @ESGandCoffee podcast.

esgandcoffee[at]gmail.com



LINKS

Honeytree Investment Management Ltd https://www.honeytreeinvest.com/.

https://twitter.com/honeytreeinvest

Honeytree Investment Management Ltd FORM ADV https://www.honeytreeinvest.com/_files/ugd/37c8e3_b0a5dd5d425c40c3b08b6d14a1b4e1d6.pdf “Honeytree Investment Management Ltd. (“Honeytree”) is a Canadian based advisory firm principally owned by co-founders Paula Glick and Liz Simmie. Honeytree manages segregated investment accounts of its clients with a focus on responsible growth. Honeytree has been in business since 2018 and is organized under the laws of the Province of Ontario as a registered portfolio manager. Honeytree specializes in responsible growth portfolios and has developed and managed equity strategies holding Global, US and Canadian based securities. Honeytree offers two different types of advisory services.”


Liz’s favorite book is “better than any investing book”: The Death and Life of Great American Cities 50TH ANNIVERSARY EDITION By Jane Jacobs, Published by Modern Library. Watch a “book insights” on this book “Jane Jacobs Changed the World: Book Insights Podcast on The Death and Life of Great American Cities”. There’s a connection too: she grew up in Scranton PA, like some of my family, and President Biden. Scranton is famously mostly for being the home of Dunder Mifflin! Considering how much of fighting climate change will involve uncomplicated but difficult changes like energy efficiency in buildings.

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DISCLAIMER: No part of this series constitutes an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Do your own investment research and make up your own mind. Buy advice from professional providers covering financial, tax, legal, accounting, and/ or other advisors before making any investment decisions. ESG and Coffee Podcast, its host and guests are not your guru, fiduciary, advisor, life coach, or soothsayer. They are superb conversation, however.

 
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