Innovation

Common Interests is an independent family wealth management practice committed to “empowering the financial wellness of [their] clients and do [so] in a socially responsible manner” (https://www.commoninterestsfinancial.com). This company’s innovation is its business model: direct impact investing. Direct impact investing involves using investing as a tool to shape society in a positive manner. Robert Goellner, founder and senior partner, and his partners specifically seek out smaller, socially-conscious companies and work with them in a very specific way. As Mr. Goellner says, “When we work together, our interests become common.” Rather than simply giving a company money or investing in stock, Common Interests works directly and closely with companies, acting as advisors and coaches. The difference between Common Interests and others is that more than just numbers, they look at how a company governs itself, how it treats the environment and how it treats its employees.

Common Interests is able to run efficiently and successfully through its internal and external stakeholders. It is made up of four employees that are dedicated to their business model and mantra. Mr. Goellner was able to assemble a diverse team of employees with knowledge ranging from, technology, to science, to the arts. The other employees were able to draw upon their past experiences, degrees, and knowledge to heighten Common Interests. Common Interests attracts external stakeholders through the personalized business they offer their clients. “If, for instance, a client doesn't want to have exposure to companies involved in the extraction, processing or heavy consumption of fossil fuels, we offer portfolios that are fully fossil-fuel-free.” (Max Mintz) proves their mission with impact investing. They convince their external stakeholders to believe in sustainable goals that are in line with those of Common Interests’, while also helping them earn money. As Max Mintz, the Junior Partner, said during our second meeting, Common Interests “facilitates clients expressing their values in their investments.”

Common Interests work towards many of the UN Sustainable Development Goals, namely promoting sustained, inclusive, and sustainable economic growth, and protecting, restoring, and promoting sustainable use of terrestrial ecosystems. Common Interests is funded by the companies and clients with whom they work closely. Although the company uses common practices, such as looking at balance sheets and financial statistics, of the companies they invest in, they take their purpose further by allowing their values of social responsibility and empowering financial wellness to lead their investments. Additionally, they have recent partnered with the State of NJ and the NJ Department of Labor to increase the number of Certified Financial Planners in the state with the goal of increasing the reach of financial services into underserved communities.

Inspiration

When Robert J. Goellner first started his company in 1994, it was not popular to work with and invest in only the “good people.” Many people told him he would not get anywhere in business in such a manner. However, this motivated Mr. Goellner to work and invest in companies doing good for the world. He used this to explain a metaphor which was the Blue Ocean and the Red Ocean. The Red Ocean was the old way to invest, which included everyone competing head-to-head. The Blue Ocean is the new way of investing that Mr. Goellner wanted to follow. This version focuses primarily on the companies that Common Interests is working with and looks at the competitors as “totally irrelevant.” This purpose manifests itself in the company logo: ‘the world in an eye’. This saying drives Common Interests, reminding the company to focus on social responsibility and to view the world as a ‘global village’. As Mr. Goellner says, “When we work together, our interests become common.” Common Interests's innovation correlates with their mission to positively impact society as Common Interests seems to care about the impact of their business.

Overall impact

Common Interests innovates through their business model, which in turn impacts the world. In order to do so, they focus primarily on sustainable companies and invest in sustainable goals based on their clients’ preferences. One major component of their business model is the lack of a minimum account size for their clients’ investments accounts. Since many of their competitors require minima before accepting clients, Common Interests gains access to a more diverse array of clients. Even with more lower-income clients than their competitors, Common Interests still finds a way to profit with their fee schedule as their website proclaims: “We’re committed to being a ‘no-minimum’ firm, so we’ve developed this fee schedule to enable us to cover our overhead while still helping those who need our assistance” (commoninterestsfinancial.com). Their Inverted Quantity Discount uses a fee schedule in which their hourly fee is directly proportional to the income of the customer. Under this method, they can still profit while giving their clients relatively affordable rates. In fact, Common Interests received a “Best for Customers 2018” honor form the Certified B Corporations, for their consistently exceptional “Leadership & Outreach” and “Investment Criteria” among other qualifications (bcorporation.net). With a steady stream of clients, Common Interests can remain dedicated to the UN Sustainable Development Goals in the long run. As a Principles for Responsible Investments signatory, Common Interests must “play a role in creating a sustainable global financial system” (commoninterestsfinancial.com). Common Interests is in collaboration with over a thousand other investment firms, all dedicated to the UN goals. The challenge specifically states, “By 2030, the deadline proposed by the UN, that should amount to cumulative 25% of assets under management having a direct positive contribution to the SDGs” (commmoninterestsfinancial.com). Therefore, Common Interests continuously works with clients and partners with other firms in a collective effort towards this long-term goal.

Common Interests’ qualitative impact is shown in how it impacts the workings of other companies. Common Interests’ business model of attracting smaller clients, without requiring minima, shows the immense possibility for any business, whether big or small, to gain financial support and make enough money to sustain its growth targets. This success is possible as long as they are sincere every time they work with their clients who invest with them, in a socially and environmentally conscious manner. Through Common Interests’ achievements and examples of success with its “impact investing” business innovation, other smaller companies may be more eager to participate in the investment scheme and be empowered to grow their business by being more socially aware and friendly to its investors and customers alike. Common Interests’ innovative investments show clients that they can be socially-conscious and work with other socially-conscious companies, whilst still making a profit and an impact.

Business benefit

One business that Common Interests is investing in is Nuveen. This company strives to engage with the community and environment around them by, “helping companies and issuers innovate, attracting new capital, operating more efficiently and managing risks by engaging on Environmental, Social & Governance (ESG) issues” (Nuveen). Nuveen focuses on engaging with clients through following ESG issues and investing using PRI guidelines to ensure that the work they do reflects the utmost in corporate social responsibility. Nuveen engages with a spectrum of strategies to influence and innovate in areas like the power of proxy voting, which is the primary method for influencing company behavior that involves thoughtful, case-by-case voting on management and shareholder proposals; company dialogue, which involves meeting directly with company CEOs, senior management and board of directors; targeted initiative by producing measurable outcomes with company, industry, and country specific initiatives; market initiatives involving collaboration with industry peers to set market leading standards; and policy influence that aims to influence legislation, public policy and global standards of best practices (Nuveen Engagement Flyer, p.2). Nuveen also is an important member of various standard setting policy maker boards such as Global Investing Impact Network, Sustainable Accounting Standards Board, PRI Farmland Guidelines, and the Global Initiative for Sustainability Ratings just to name a few. In 2017, Nuveen made 300 engagements on behalf of more than 250 companies in board related (28%), compensation (25%), diversity and inclusion (19%), sustainability strategy (15%), and corporate governance (13%) areas. Nuveen has signed and agreed to 95% of initiatives to reduce climate risks and being 100% committed to reducing deforestation and conserving water. Nuveen works with a variety of experts, engages with multi-functional teams, holding public companies accountable and being transparent in all the investing and advising activities that they do (Nuveen Engagement Flyer, p.4).

These characteristics of helping the environment through sustainable use of our natural resources, being on important corporate boards, collaborating with teams and working with customers in a transparent way in investing activities are also what our company, Common Interests, holds dear in their day to day operations. Through their partnership and investments in Nuveen and other companies their clients and employees interact with in their daily lives, Common Interest is able to attract more partners with similar sustainable practices and work to achieve a higher following and profile in an attempt to spread the awareness and benefits of those practices to the community around them. They are also more likely to gain more employees and investors willing to invest in their business to build it into a stronger company overall.

Social and environmental benefit

Another one of Common Interests’ investments is their involvement with BMW to help them build electric cars. This investment is sustainable by dealing with and diminishing the use of fossil fuels. The electric cars will also diminish carbon-monoxide emissions which negatively impact our environment. Common Interests partakes by investing in these types of ideas to promote the well-being of the environment and our society by promoting cleaner transportation methods for ordinary citizens to utilize on a daily basis while promoting healthier lives. A quote from the BMW website about one of their electric cars states,

“Sustainability means more than emission-free driving. It starts in Leipzig, where BMW i vehicles are assembled at one of the world’s most modern and eco-friendly factories. The process is entirely powered by the factory’s own wind turbines. And the Moses Lake plant – one of the largest CFRP plants on earth – draws its energy from locally-sourced hydropower. Producing an i3, from first bolts to final inspection, takes 50% less energy and 70% less water.” (bmwusa.com)

This is a great example of the types of companies Common Interests looks to invest in. The companies that promote reducing the use of fossil fuels and lowering carbon emissions are the most appealing to Common Interests. According to the Calvert’s US Large Cap-Core Responsible Index, which bases their findings off of the Russell 1000, Common Interests has 93% lower fossil fuel reserves and 35% lower carbon emissions than the Russell 1000 in their fund holdings.

Interviews

Robert J. Goellner, Founder, Senior Partner, Financial Advisor

Max Mintz, Junior Partner, Chief Investment Officer