There Is No Alternative – Interview with Lisa Hayles, part 1

ESG-talks is a series of interviews with ESG professionals with diverse educational and professional backgrounds, whom we regard as role models. This series aims to encourage participation in the ESG and responsible investment (RI) space, to attract talent from different sectors and industries, and to widen the conversation. 

Lisa Hayles is Director of International Stakeholder Advocacy at Trillium Asset Management in Boston, the US. She was born in Canada, where she studied Political Science and History for her BA at the University of Toronto, and International Development at MSc level at the University of Guelph. Lisa has been working for more than 20 years in advising, designing, and building responsible investment approaches, and worked at both EIRIS and Boston Common Asset Management before joining Trillium. She is an avid supporter of social justice, co-founder of the Racial Justice Investing Coalition, and current peer-review board member of the new project: Racial Equity Scorecard in the UK public markets. We asked her about her career spanning different disciplines and continents. 

ESG is an industry that is open to people coming from many different educational backgrounds. You started studying Politics and History, then International Development. How did you turn towards ethical finance in the end?

When I was an undergraduate at the University of Toronto, I had some volunteering opportunities that shaped my interests and choices. I volunteered for Oxfam and was a student coordinator for Amnesty International. We would bring together groups and we would write letters once a week and I would go and drop off the letters at the Amnesty Office, so they could be mailed in bulk. Learning about human rights, about what we could do in developed countries was inspiring.

After I graduated from my first degree I responded to an ad in a newspaper and – I know this is something that does not really happen anymore – that’s how I got my job at the Calmeadow Foundation, which was a resource centre focused on micro enterprise and micro finance, which was very early on, still in the 90ies. I spent two and a half years there, then went to France; I studied and travelled a bit, and when I came back to Canada, I did my MA in International Development Studies, at the University of Guelph. I fully expected to build my career globally in international development.

While I was finishing my degree, I volunteered at a conference on investing, this is where I first learnt about what at the time, was called socially responsible investing (SRI, environmental investments). I heard several speakers, and I became really fascinated by the topic. And while I was finishing my master’s degree, I was invited to apply for a job with the Social Investment Organization (now called the Responsible Investment Association – the Canadian SIF), so I applied for that job, and I got it. It was a tiny organisation only two staff and I was the Assistant Director there. We worked with financial advisors, we provided membership services, including networking and training and education to advisors and fund managers.

Do you feel that you have a different approach to sustainable investment, some added value because you bring a different angle?

Yes. I have always been interested in social justice and the implications of the intersection where private enterprise and social justice meet; how different actors impact each other. We call them rightsholders today, but we did not use that language twenty years ago in finance. And I have always thought that financial markets should be serving us.

I had a professor when I was in Graduate School who told me and all of us should beware of ‘TINA’. TINA is There Is No Alternative and I’ve always remembered what she said. This idea that there’s only one way to the logic of the market and everything must be subsumed to it. You can’t resist it. And I think her framing of that was really freeing, because I never was trained to only look at things from the point of view of finance, so it seemed quite natural to me to consider a whole range of things.

Not having a degree in finance has never been an obstacle to my career. I have built knowledge and experience on many responsible investment topics. I have met regularly with actors across the investment chain -investment consultants, pension fund trustees, portfolio managers, advisers and through my engagement work I’ve talked to C-suite executives and board members of companies about climate change, human rights, diversity. ‘ve learned about asset classes and how companies are valued, and so on. I find it useful to have my different lenses on these topics.

What would you tell someone who never studied finance and starts in in the ESG industry or wants to start? What is the easiest way to get into it or start to learn about it?

I have had many conversations with students over the years and I try to be accessible, because I can remember when I was a student and how hard it was to break into the industry. Now there are many more courses available in impact investing. Also, there are Business School classes and undergraduate degrees on impact and social enterprise, which did not exist when I was a student. So, I think the first question I would ask any student is what are you interested in, and what do you know? Because there are roles and opportunities today that did not exist fifteen-twenty years ago. If you wanted to become an analyst or portfolio manager, I would say you probably need to pursue a CFA (Chartered Finance Analyst) course, but you don’t necessarily even need a finance undergrad to do a CFA.

Here in the US, but I think in the UK, too, there are so many other potential roles; for example, in research and stakeholder engagement both within investment manager firms and within companies themselves. These roles offer you the opportunity to be responsible for some aspect of sustainability performance within the firm. And if you’re interested in environmental stewardship or, you switch to a particular sector and you’re in sustainable packaging, there’s so many ways you could come at the role. Students should always start at what they are studying currently and what they are interested in.

It seems off-topic, but there is a course at Stanford which is called ‘How to design your life’. You can even look up a short presentation of Bill Burnett, the professor who co-designed the course. One of the things that he argues is that somewhere in the world today there’s someone already doing the job that you’re interested in, so part of your strategy is to figure out what it is you’d like to do and find out how to get there from some of those people.

If we put it together your travels and career trajectory, there was Toronto, then France, back to Toronto, then almost ten years with EIRIS in London, and now you live in Boston. What was the drive behind these big changes in your life and career?

I have always been fascinated by global affairs, also travelling; it has always been a little bit of wanderlust there.

Before I started my career in sustainable finance I went to France as a student, and I tried to make the most of it. One of the challenges of France was that it was hard to find a job, so I worked as an au pair with a Franco-Jamaican family. They were looking for someone who spoke English and had knowledge of the Jamaican culture. Those poor kids had just left paradise and moved into a tiny apartment.

What brought you to London and EIRIS later?

I met an employee of EIRIS at a conference, and later a friend sent me a job opening on a lark – I had no intention of moving to London. I casually applied as it seemed interesting. I was visiting a friend finishing up a degree at Oxford, and so I was already planning to visit the UK for her graduation, so the timing worked out perfectly. In London, I had my interviews, I spent an afternoon with that usual three-person panel. Somebody brought me some tea while I was doing a little test. They also asked me to do a presentation. So, I had a good opportunity to learn a bit more, and by the time I was out of there, at the end of my three and a half an hour visit, I really wanted the job.

Once the offer had been made, I was so excited and I really was fortunate to start working at EIRIS at a time shortly after the pension disclosure regulation had passed in the UK, requiring pension funds to disclose the extent to which they used ESG information (on a comply or explain basis). As a result of that regulation, there was huge demand for EIRIS’s services. The industry was exploding with new funds and many more asset owners and fund managers and advisors all wanting to gain access to the kind of information we could give them.

When I joined, I was the twenty-eighth employee and over ten years we trebled in size, and we maybe quadrupled our turnover. So EIRIS grew a lot over that period, and I happened to be in the right place at the right time, when industry growth was explosive.

What was it like leaving again for another job in another country? How would you describe the difference between the two roles at Eiris and at Boston Common Asset Management?

So I think there was some culture shock on moving to the U.S. from the U.K. even though I had visited the U.S regularly while living in London and even before when I was in Canada. Boston was not as cosmopolitan as I was used to and it was also more racially segregated then I realized.  I knew that cities in the U.S. South are segregated but I didn’t realize how laws and federal policy by design had excluded African Americans from full participation in the economy and civil life  –even in the Northeast.  That was a bit shocking honestly. I was fortunate that my colleagues at  Boston Common shared the same values and outlook as me and that they were  committed to sustainable investing and active ownership – I always say that they ‘walked the talk’.

Boston Common had a set of ESG guidelines that they applied, so they were the perfect clients for EIRIS. EIRIS’s definitions and methodology matched up very well with how Boston Common thought about social & environmental issues, and so that was helpful. When I joined Boston Common, I was as an ESG specialist. This was also a kind of relationship manager, meaning that I was someone who could speak more in depth about the ESG research process and the engagement activity. And in addition to the relationship management activities, I also became responsible for engagement on diversity with our portfolio companies.

And then you went to work for Trillium also in Boston. How would you describe the differences among the countries you lived in in terms of their ESG approach?

In the UK and in France a lot of advancements in the ESG area are driven by policy and regulations.  They come about as a result of a consensus built over time around a spectrum activity, and involve civil society, government and the private sector. The private sector and governments both in the UK and France are just a little more responsive to civil society. And then in the US you have wildly divergent regulations and policies. We’ve seen this ESG backlash erupt and at the same time,  huge behind the scenes influence on standards by the private sector. A lot of the ESG initiatives are driven by voluntary actions here, and partially because there’s just an American suspicion of government action – policy or regulation or legislation. The current policy apparatus is frozen; you can barely get even minimal laws passed  or  new policy; it’s still captured by corporate interests and other interests. Corporations are literally being drawn into public policy debates, but it’s understandable because here in the US, so much public policy and regulation is kind of hamstrung, either by the courts, because the Supreme Court has been captured, or at the state level by right- wing state level representatives.

Also, there is probably a cultural difference between the way we approach the investors in the US and the UK. In the US we are much more direct, some would say confrontational. We pose the question to ourselves: How does change happen? There is some reticence perhaps on the part of the UK asset managers of losing their access, their good relationships with  companies if they use some of the more challenging tactics. But we need to use our access as investors to shift the way that companies  behave, not to do this so-called ‘tummy-tickling’ engagement, (shout out to Raj Thamortheram!) when we all feel good, but nothing important changes.

Would you say that it’s more difficult now the situation of the ESG industry in the US than in the UK?

Yes and no. On the upside, there’s a lot more scrutiny and very large investment managers who may have proxy voting policies and participated in various collaborative engagements in the US. I think most companies acknowledge at the very least the importance of ESG issues to their long-term performance, they talk about their commitments upholding high ethical standards. One could argue the extent to which it’s greenwashing or not. Also, the current attacks on ESG have not really resonated with the general public. And that gives this industry a good reason for hope.

Interview taken by Rita Sebestyen