If you wish to create an investment portfolio focused on social values, IMPACT makes it easier for you to find and invest in companies that share your values. Brought to you by Interactive Brokers, the platform helps you create a sustainable investment for you, your community, and the planet. Will Peterffy, ESG Director at Interactive Brokers will be sharing more details with us in this interview with TechBullion.
Please tell us about yourself and your experience at Interactive Brokers?
Well, that is a very meta question, and I will answer it to the best of my ability. I grew up very entrenched in capitalism due to my father being who he is, learning about how markets work, supply and demand, and having the laws of our economic system engrained in me. But I personally, have always been drawn to the outdoors and the natural world. Growing up at the time that I did, I witnessed the destruction of the natural world at a rate we have never seen. Because of that, I spent a lot of time in intentional farming communities, studying permaculture, community development and environmental studies. Being in these communities I was living a very healthy, happy lifestyle, but I became dissatisfied with that because the world was continuing in a destructive way, and I began to see that our economy and capital system was the biggest driver of this destruction. Seeing this, I moved into the financial world to gain a deeper understanding of how this worked. After working for hedge funds for three years in New York, I left disheartened, and I ended up working for a non-profit called Bioneers. Working in this environment, I started to understand externalities in a deeper way and how these externalities were having detrimental effects on our world. So, I committed myself to figuring out how we move towards a regenerative economy by solving for these externalities in our financial system.
What is IMPACT and what inspired Interactive Brokers to create this project?
The IMPACT app is a new revolutionary and easy-to-use investment platform that is really focused on aligning the clients’ investments with their values or what they care about. The inspiration for the idea came out of my experience working with finance, and really acknowledging a large void in the financial ecosystem that could be summed up with the word heart. You know, the financial world was really missing the human component of what’s valuable. And I started to see how our world was reflecting this void in our financial system and that a lot of what people truly do care about isn’t being reflected in how corporations are operating. The inspiration was that if we gave people the transparent information, as well as the tools in order to make decisions based on that information, that people would begin to support companies that are operating in ways that are aligned with their values and move their capital away from companies that were not.
Tell us more about your company Interactive Brokers. What makes you the best for this project and what is the level of market demand for a platform like IMPACT?
Over the past 30 some years since my father founded the company, Interactive Brokers has had the best technology and the best prices, and we’ve always made that available to anybody who wanted to trade. We, as a company, have never been in the business of telling people what to invest in or how to invest, but we have always been, in my opinion, the best at offering a platform for people to be able to take whatever financial action they want to. In our current time we are witnessing mass environmental and social issues and I started to connect how the gaps in our economic system were allowing this to happen. Based on that, I came up with the idea to fill in the gaps, include externalities and give people the tools to express their values with their financial decisions. And from this the IMPACT App was born. These new tools being backed by Interactive Brokers as a long-time trusted and reliable technology is incredibly valuable. And consumers are going to love this technology because not only is it is it heart-aligned, but it will work.
The demand for an app like IMPACT is large. If you want statistics, the ESG marketplace is evaluated at $73 billion right now. However, the statistic that I was really thinking about when we created the IMPACT app was that millennials are four times more likely to buy an eco-friendlier product, even if it’s more expensive than a cheaper mass-produced product. Coupling that with the statistics that over the next 10 years, we’re going to witness the biggest wealth transfer that this world has ever seen. Something in the realm of $60 trillion, is going to be transferring into millennial hands. As a millennial who has a finger on the pulse of what millennial’s care about as well as the statistics I mentioned, it shows that there’s going to be massive demand for this type of investment platform.
A mobile trading platform based on values; how do these 2 work together, could you give us a walkthrough of the ecosystem?
Indeed! We chose a mobile app, mainly because this next generation of investors is operating on a mobile device. We wanted to make it accessible to anybody with a smartphone.
The way that the values component functions is when you log on to the app for the first time, it’s going to ask you to fill out your values profile. And based on that you’ll select companies that you want to blacklist from your potential portfolio, and then it will ask you a series of 13 values-oriented questions about what you care about. We then couple that data with the ESG data and that gives us the ability to match a client’s financial decisions with what they stand for in the world. And that’s how it functions. The idea of it is that the smaller the gap is between what people care about and how they’re able to express and create that value outside of themselves with their finances will bring us into a more harmonious and aligned planet.
What are the core values an investor can choose?
IMPACT allows investors to select their personal investment criteria from 13 impact values and principles: clean air, pure water, ocean life, land health, consumer safety, ethical leadership, gender equality, racial equality, LGBTQ inclusion, company transparency, sustainable product lifecycle, mindful business models, and fair labor & thriving communities. Investors can also exclude investments based on 10 categories: animal testing, business ethics controversies, corporate political spending and lobbying, energy-intensive, fossil fuels, greenhouse emissions, hazardous waste, high water usage, tobacco, alcohol and gambling, and weapons and gun manufacturers.
Tell us more about your organization “One Small Planet” and your mission to harmonize the wealth of people and the planet?
Wow, I’m so happy that you asked. I didn’t know that you were aware of that. One Small Planet is the exterior professional manifestation of me, so it is really my baby. It’s something that I’ve built over the past seven years of my personal work, and at a certain point I realized that work deserved more than just me—that it needed to be its own entity out in the world. The premise for the organization is: How do we create a regenerative future, that is based in in systems thinking? We are addressing the fact that a lot of the issues that we’re seeing right now, environmentally and socially, stem from systemic problems that we have collectively created. Today, we need to use philanthropy to address a lot of these issues. One Small Planet has a philanthropic arm and it gives grants out to people in places that are in need of that philanthropic support. It is playing a role that can be thought of as defense.
One Small Planet is also on the offense with our impact investment fund which we like to think of as a Vital Capital Group, as opposed to venture because what we invest in is vital, meaning that it is important to the health and thriving of all life on this planet. We invest where we can create a positive impact and have returns from that, so that not only can people like myself invest in it and support it, but it’s something that’s sustainable and reasonable for the whole world to be able to invest in. So those are the areas where we see ourselves really creating systemic change.
The other aspects of our work is boots on the ground, tangible land regeneration. We’re currently working on two land projects. One is transitioning a large farm in Kansas from conventional, pesticide ridden, monocrop agriculture to a regenerative ranch using rotational grazing practices to sequester more carbon and create higher levels of biodiversity. One Small Planet is working to create economic systems to account for the health of the planet so that our economy can incentivize the good work of creating healthy ecosystems.
While we’re doing this work on the ground, we’re also making strategic investment plays to bring about currency systems on the blockchain that are incentivizing behavior that will create healthy ecosystems, clean air, clean water, and make this system equitable for all people.
We hope to tell the story of our work, of the indigenous people stewarding vital lands, of farmers and technologists working to regenerate land, and of our collective consciously choosing life. We will share these stories through visual and written media, conferences and community events.
We all find ourselves on this One Small Planet and it is our highest gift to be able to take care of her. This business is the best thing I could come up with to do that.
It seems you have a great passion for environmental causes. Could you share more of your success stories with us on other projects you worked on?
At IBKR we have seen so much growth from our ESG department in just two years. Launching the IMPACT app was a huge mark of success, just to see it out there and how it’s already starting to change the way some people think about investment. Internally at IB we have greatly reduced our waste and carbon footprint, we have begun to give charitably annually, we now match our employees’ charitable contributions as well. We are balancing the ratio of men and women within the firm and have added diversity to the board. The biggest success I see within the firm is the excitement and enthusiasm to contribute and to be a part of a company that is growing like this. It brings a real smile to my face when I see people so pumped up about the changes we are making, management included. We have also begun to be recognized for our efforts within ESG community being a finalist in Fast Company’s World Changing Ideas award; #1 new trading tool by Stockbrokers.com; our Interactive Advisors subsidiary has won best for sustainable investing portfolios; Benzinga awarded us best trading technology for 2020 in large part due to our Impact Dashboard; as well as winning in the Finder Australia’s Innovation Award in their Best Investment category for our Impact Dashboard.
Launching my organization One Small Planet has also been a huge success in itself. The team that has rallied around this work and intention is a huge win. To work in an environment where everybody works overtime, happily because it is passion-driven is such a gift in my life. Through OSP we’ve had many small successes already in our first year.
Through our foundation we have built deep and trusted personal relationships with our grantees on the ground in Brazil, Arkansas and Peru supporting sovereignty and empowerment of the indigenous cultures here. We have supported them in getting them access to good clean water, helping them to create a culture-based economy, and building healthy land-based community spaces owned and run by them in their traditional ways. These relationships, first off, are a huge success for me. I see that so many people working in philanthropy largely don’t have very reciprocal honest and trusted relationships with the people on the ground they are supporting. Bringing this work to the relational level, I believe, is half the work. Not only do we have to heal and transform these systems outside of us, but so much of the work is internal. By building trust, brotherhood and alliance with people whose trust has been very broken over the years but finding those points of similarity and spending the time to really listen and understand and be understood has been so powerful. I am very grateful for Marcus Briggs-Cloud, Yube, Bane and many other indigenous leaders who have spent the time with me and the trust in me to work together.
In our land project in Kansas, we have successfully cleared the lands of mono-cropped, pesticide-ridden agriculture and the land is currently regenerating, sequestering carbon, and providing a home for 350 head of cattle who are doing that work for us.
And what’s most exciting to me and success itself within the journey is how many people are behind and developing an economy based in natural value. It’s growing by the day the number of new systems being developed to be able to account for the health of our planet using sensing technologies. I consider it “fitbitting” the globe. We have realized seeing these data points for our own organism is very helpful to keep track of and improve our health. At this point, I believe it is a collective truth that we must track and improve the health of our shared organism, the Earth. In working in that world, I have witnessed such creativity, dedication, authenticity, and it’s wonderful to see what can happen when a group of people work in cooperation to solve a shared problem. I have started to see currencies on the blockchain that are tied to carbon in the ground and these currencies are raising in value. This to me means that humans are beginning to believe in these forms of value and are putting their money where their mouth is. This is a huge win for us all. The more our economy can reflect the importance of our natural world the happier I am. Healthy land makes healthy people and healthy people make healthy land. 🙂
At what stage of development is the IMPACT platform and what should we expect next on your roadmap?
Great question. The IMPACT platform is in its MVP, or minimal viable product stage. We are excited about the impact this can have and how happy our clients will be with it. And at the same time, we’re very excited about all of the other functionality that is in the pipeline to be added to this base MVP product. We plan on evolving our crypto offering, building a social component so that people can share and learn from each other through a social networking aspect of the platform, financial lens is also going to be added to give clients added visibility to the more traditional components of their investment strategy. And that is all I will share for now. The sky’s the limit with the opportunity for expansion of this platform. We’re committed to bringing all financial vehicles to the table for our clients to be able to access and express their values with their finances.
Do you have any available opportunities for investors and partners on IMPACT?
Yes, first download and put your money with your heart is! Talk about it to your community, on your social media and tell people what you think about it. And, if so inclined support our ongoing ESG initiatives and buy IBKR stock.
In the future, we’re going to be developing a social media aspect of the platform. So, once we go live with that, you will be able to share your strategies, share what you’ve learned, and to learn from other people that share your values. We’re really excited about that in the future.
Currently, we’re very excited that it’s out. We really hope the market receives it the way we think it’s going to. We are excited to bring this new functionality to the public. It’s something that I personally have identified as a major issue in our world for a long time. And it’s an exciting time to be able to help to solve that problem.
Any other information you would like to share with our readers today on IMPACT?
We encourage investors to try out the IMPACT app. Visit our website at https://impact.interactivebrokers.com/ and put your money where your heart is!