An overview of The Responsible Investor Handbook and the drivers pushing a movement of responsible investing around the globe.

1. THE SEVEN EMERGING DRIVERS OF
RESPONSIBLE INVESTMENT

2. Solar Impulse-2 over San Francisco
As the sun rose on March 9, 2015,
a huge solar-powered plane called
Solar Impulse 2, with a wing span
longer than that of a Boeing 747,
took off from the Middle East ,
aiming to fly around the world.
The New Wright Brothers!

3. Solar plane circles the globe!
“Andre Borschberg and Bertrand Piccard aren’t looking
to revolutionize aviation with their solar-powered
aircraft”
“Rather, …they want to raise the profile of a suite of
technologies on their Solar Impulse 2 aircraft—many
commercially available today.”*
They wanted to prove that new solar technologies can
achieve what was considered impossible!
*(CNN)

4. “Investors have an incredible amount of power. They
have the ability to effect huge amounts of change, and
they just need to come together and act.”
Fiona Reynolds
Managing Director
Principles for Responsible Investment

5. The Handbook is a “how-to” manual for capital
stewards.
It is co-authored by Annie Malhotra, a young,
remarkable woman from Toronto who has worked with
impact investors and has her CFA.
The book is being published this Sunday by Greenleaf
Publishing, UK, as the 5th volume in its responsible
investment series!
The Handbook was commissioned by the AFL-CIO and
a small group of generous sponsors, including unions
and responsible investment managers.

6. The Handbook issues a call to action for all of us
to responsibly invest workers’ capital.
It scans responsible investments in the US, UK,
the Netherlands, Sweden and Australia, and
includes examples from other communities.
It upholds the importance of real retirement
benefits, and defends our “Commonwealth.”

7. The Handbook is written for laypeople. We tried
to translate complex financial systems, showing:
• The role of labor in winning social and
retirement benefits across borders, and...
• Shaping and financing responsible
investments.
• Planning pension governance and
management.
• Fighting for good corporate governance.
• Reclaiming fiduciary duty.
• Responsible investing across asset classes.
• Implementing and measuring ESG
performance.

8. Workers’ capital means, simply, our money, the pension funds and
other savings and assets of working people, including 401ks,
insurance funds, bank deposits, etc.
Real pension funds—defined benefit plans—grew from $153 billion
in 1978 to $9 trillion in U.S., including $4 trillion in public and T/H
plans where workers have a voice.
Overall, workers own $22 trillion in institutional investments in the
U.S., and over $36 trillion globally.
What is Workers’ Capital?

9. 6.2 million US
jobs paying
nearly $307
billion in labor
income
$943 billion in
total economic
output
nationwide
$555 billion in
value added
(GDP)
$133 billion in
federal, state and
local tax revenue
The impacts of paying $477 billion to 24 million retired Americans in 2012:
Economic and Financial Impacts – U.S.

10. American know-how pioneered the early development of the modern solar energy.
People’s pension funds provided, directly and through VC funds, the fuel to launch
hundreds of solar entrepreneurs.
Our ancestors--workers, engineers and entrepreneurs– also built our cities,
railroads, highways, schools, homes. They created a mighty industrial commons.
They advanced technology, space travel, and renewable energy. Workers and
societies around the world accomplished many of the same momentous
breakthroughs.
Our own pension funds were significant partners in many of these advances in the
last half of the 20th Century. Our money—saved by teachers, electricians,
steelworkers, firefighters, hotel workers—seeded innovative industries with earth-
changing impacts over the past several decades.
Responsible Investing Aviators

11. • Fought and won the 8-hour workday, weekends and
vacations, and
• Bargained the first pensions
These stewards also:
• Led the charge toward responsible investment
• Established the groundwork for good corporate
governance
Labor’s capital stewards were
the original “crowd-funders.” They not only:

12. There is a long, rich history of intentional and ethical investments in the U.S., going back
to the Quakers decision in the Civil War to divest in the slave trade. The Handbook
highlights the pioneering work of unions in America (and globally):
1920’s –Starting the early 1900s, AFL President Samuel Gompers, Garment Workers
President Sydney Hillman and Mineworkers President John L. Lewis began building social
housing, banks, clinics and co-ops in the U.S.
1960’s – AFL-CIO President George Meany and Martin Luther King joined together to
create housing investment institutions to achieve social and economic justice, partnering
with construction pension funds.
1980’s – Industrial unions began designing shrewd capital strategies, deploying worker-
friendly investment banks and new capital vehicles for turning around or expanding critical
industries.
2000’s – Teachers, public and service employees began investing their pension funds in
energy, transportation, and infrastructure innovations to grow the clean economy.

13. The Momentum Towards International
Responsible Investment
Labor in the Netherlands, Sweden, UK, and Australia began investing in social housing, mutual societies,
banks, co-ops dating as far back as 1850, when Amsterdam’s unions responded to the city’s unlivable
slums.
Labor and social democratic governments historically have provided better protections for citizens and
working families, and many Euro communities foster workforce participation through consultation rights
and “stakeholder companies.” Many of Labor’s institutions—built a century ago--play important roles in
their societies today. In recent decades, peoples’ pension funds began investing in workforce housing,
essential infrastructure and amazing cross-border renewable energy platforms.
When the UN and partners launched the Principles for Responsible Investment (PRI), the founders
included labor capital stewards who, on behalf of workers, aligned the new global ESG (environmental,
social, governance) framework with their consistent humanitarian values.

14. Making the “Boss” More Accountable
The Handbook highlights Labor’s role in the U.S. in active ownership, given the lack of social
democratic and co-determination rights. By mid-century, they were demanding livable wages,
workers’ rights, safe supply chains, independent boards and sustainable investment.
In 1949, independent
telephone unions used their
share ownership in AT&T to
bring shareholder attention to
management’s decision to
cut pension benefits
In the 1970’s, Amalgamated
Clothing & Textile Workers
Union brought unsavory
employment practices to light
at the J.P. Stevens shareholder
meeting (Norma Rae)
For over two decades, labor has
joined national and global
campaigns on broad governance
issues, including human rights,
workplace and environmental
safety, CEO pay, etc.

15. Barriers to Use and Integration of ESG…
Responsible investment advocates in the U.S. still face strong headwinds that prevent
a greater adoption of RI practices:
• Agency separation between beneficiaries and pension managers.
• Regulatory complexities.
• Excessive focus on short-term gains.
• A fear that responsible investing compromises financial returns.
• Lack of knowledge by consultants and trustees, and little in-house staff expertise.
• Limited worker representation on boards of trustees, unless where mandated.
• Lack of inclusion of ESG issues in financial education (PRI, 2013); and
• Minimal collaboration between pension plans, big and small, on responsible investment
initiatives and deals.

16. …& After-effects of 2008 Financial Crisis
• $11 trillion in household wealth
and $4 trillion in savings wiped
out, wages and benefits ravaged,
homes foreclosed.
• Destroyed jobs, as 40 years of
income inequality spiked higher.
• Bank bail-outs crowded out real
stimulus, led to austerity (across the
OECD)…severely damaging cities
and communities.
• As gridlock led to collapse in
infrastructure investments.
• Working poor and more homeless
are still living in tent cities or streets,
marginally surviving.

17. TIME TO
GIVE UP?

18. The Seven Drivers
However, seven powerful drivers are challenging irresponsible short-
termism:
• The growth of the Principles for Responsible Investment (PRI).
• The 2015 U.S. DOL pension guidance on legality of ETIs, strongly advising ESG investing.
• Responsible investment performance studies demonstrating financial outperformance
• Post-2008 market crash reforms (Dodd-Frank Act 2010; SEC “Say on CEO Pay”)
• Paris Climate Change Accords in 2015, leading to landmark commitments.
• The “Fight for $15” and national movements to pay livable wages and reverse income
inequality.
• Labor’s endorsement, aligning labor’s pension investments with global ESG
frameworks.

19. UN-PRI
Globally, there is a sea change in investment policy, signaled by the exponential growth of
the Principles for Responsible Investment (PRI). The PRI has inspired investors to think
more strategically about long-term ESG risks and opportunities.
Launched in 2006, PRI has just over 1500 signatories representing $60 trillion in assets

20. 2015 U.S. DOL Pension Guidance
The DOL guidance – Interpretive Bulletin 2015-01 – re-confirmed the legality of
Economically-Targeted Investments (ETIs) and strongly advised that investors consider
ESG matters. Thus, the evolution from ETIs to ESG.
The new rule annulled the 2008 Bush-era rule and strengthened the responsible
investment case. It not only went back to the future, 1994…
The Bulletin explicitly stated that “plan fiduciaries should appropriately consider factors
that potentially influence risk and return” and that ESG issues “may have a direct
relationship to the economic value of the plan’s investment.”
Such issues are seen as not merely tie-breakers, but “rather are proper components of
the fiduciary’s primary analysis of the economic merits of competing investment
choices”* (*Federal Register, 2015).

21. Responsible Investment & Financial
Performance
Meta-studies, academic & industry reports and sustainability data are proving the financial
advantages of investing responsibly and good corporate governance. Hundreds of studies
are now pointing to financial out-performance. Investors and corporations are showcasing
the positive impacts of ESG considerations on both investment portfolios and corporate
value.

22. New Financial Market Regulations
Post-2008
The after-effects of the 2008 financial crisis shed greater scrutiny on short-termism,
financialization, financial fraud and outright ponzi schemes.
Supported by investors’ concerns, the Dodd-Frank Act of 2010 became law, aiming to
increase corporate board involvement and objectivity and improve accountability to
shareholders. The SEC passed the “Say on CEO Pay” in 2015 to disclose pay ratios.

23. Paris Accords and Global Warming
Paris Climate Change Accords of December 2015 garnered a landmark commitment from 195
countries to address climate change, following many other global compacts. In the U.S., the
SEC began requiring disclosures of material climate change matters.
“You know nothing, Jon Snow!
Winter is coming -- NOT!”

24. Income Inequality
The “Fight for $15” and other national movements to pay livable wages, reverse income
inequality
(fighting for it)
(getting it)

25. Finally, Endorsement by the
U.S. Labor Movement
The AFL-CIO passed Resolution 11 at their 2013 Constitutional Convention.
This measure endorsed the responsible investment of workers’ capital, and moved
beyond the many decades of worker-friendly investments to support the E, S and G in
RI.
Across the globe, unions have worked in a united front to invest
more humanely and sustainably.

26. About Heartland
Heartland was established in 1995 by the Steelworkers, AFL-CIO and SVA to combat the
deindustrialization of America and rebuild our country.
Our purpose is to harness the power of workers’ capital to sustainably rebuild the built
environment, renew the industrial commons, grow the clean economy, and make the boss more
accountable
We advocate for the adoption and growth of responsible investments, particularly responsible
Economic Impact Investments (EIIs), before pension funds and the institutional investment
community at large.
EIIs yield competitive investment returns over the long term; yield positive economic impacts in
a city, region or industry; and integrate ESG criteria into investment decisions.

27. Mobilize the responsible investment of worker’s capital through investments in the real
economy, achieving competitive financial returns and positive ESG impact.
Help workers secure better retirement benefits by sustainably investing in the real economy,
securing good jobs, and ultimately rebuilding and strengthening our communities.
VISION
MISSION

28. Heartland’s Focus Areas
Convene Road
Shows &
Roundtable Events
Educate Trustees
& Capital Stewards
Foster the
Development of a
New Generation of
Responsible
Investors
Communicate Best
Practices in
Responsible
Investments

29. Roadshows & Roundtable Events
 Facilitate the sustainable growth of cities by bringing responsible investment allies—economic impact
investors, entrepreneurs, labor innovators, regional capital stewards --to set a table with Mayors, State
Treasurers, Community Investors.
 Explore collaborations to increase the flow of responsible capital to worthy projects and companies in
the city and region.
 Launch partnerships for community-scale infrastructure, the built environment, responsible enterprises
and clean economy
 Help create jobs and apprenticeship opportunities for union members and local residents, building new
career ladders for women and unemployed youth.
Pics from on the
Road in LA,
Boston,
Washington D.C.,
Chicago, Detroit,
Philadelphia,
Atlanta and
Pittsburgh!

30. Broadcasting Best Practices
Heartland builds public awareness aimed at educating, mobilizing
and accelerating knowledge and support for responsible investing
in our communities. To this end, we:
 Publishes a bi-monthly e-journal, the Thursday Espresso,
featuring news updates and opinion pieces, reaching
thousands of capital stewards and policy leaders
 Operates a robust blog and website
 Creates publicity at Roadshows and Roundtables
 Engages through traditional and social media channels

31. Thought leaders
since 1995
In addition to the Responsible Investor Handbook:
Heartland’s authors and colleagues have contributed
numerous books and papers to the literature of
responsible investment, and inspired other authors.
 Up from Wall Street: The Responsible Alternative, Croft (2009, Cosimo
Books)
 The Next Generation of Responsible Investing, Edited by Tessa Hebb (2012,
Springer Publishing)
 Helping Workers’ Capital Work Harder: A Report on Global ETIs (2009).
Commissioned by the Global Unions Committee on Workers’ Capital (CWC)
 Working Capital: The Power of Labor’s Capital, edited by Tessa Hebb,
Archon Fung and Joel Rogers. (2001, Cornell University Press)
Educating Capital Stewards

32. Growing the NextGen of Impact Investors
Heartland is exploring a responsible
investing training and education platform
for capital stewards and students alike.
We want to expose a younger generation of
investors, students, and citizens to the
responsible investment field…
And create fellowship and internship
diversity opportunities for the impact
investment leaders of tomorrow.

33. There is a New Wave of Responsible
Investors..
Mobilizing capital for:
Smart buildings and affordable housing
Community infrastructure projects
Wind and solar projects
High-speed rail, hybrid buses and electric cars

34. And they are Paying It Forward!
We are at the threshold of the most transformational economic change in a generation!
Capital stewards are reclaiming our cities, as citizens move back to the urban core, where they demand
affordable housing, transit-oriented housing, green jobs and sustainable communities.
They are backing “Making It In America,” which has gained ground from the White House to the coffee
house, and working to re-shore American jobs.
Globally, capital stewards are amalgamating resources and investment capacity to co-invest across borders
and working for a healthier planet.
With our Responsible Investor
Handbook, we hope to spur active
engagement and action to elevate
this new generation of responsible
investors into our national conscience
and conversations.

35. Join Heartland!
 Sponsor and participate - we need contributors! (and buy lots of books!)
 Help us host and organize roadshows and capital roundtables.
 Co-invest and partner with Heartland investment leaders.
 Collaborate to help us create new activist learning programs for trustees and real world
fellowships for student, advancing a cool network of next gen investors.
 Write blogs on projects capitalized with workers’ capital, with an emphasis on ESG.
 Spread the word about the role of workers’ capital, and the importance of investing our money
responsibly in the real economy!
Tom Croft
Managing Director, Heartland Capital Strategies
Email: t.w.croft@steelvalley.org
www.heartlandnetwork.org

36. In closing, we return to Solar Impulse 2, set to end its epic journey by July 26. With its wings covered
with 17,000 solar cells running four electric motors, its energy stored by batteries, one of the pilots said
that the plane: “can fly a day and a night, it can fly a week, it can fly a month—theoretically it can fly a
year.” It might be able to fly forever. Now that’s long-term!