LoweDown Podcast PraxisBy: Jody Lowe; Andy Azinger

What does “real impact” mean? Jody Lowe, president and managing director of the Lowe Group, spoke with Praxis Mutual Funds® and Everence Financial® manager of stewardship investing, Stella Tai, and vice president of stewardship investing, Mark Regier, for a behind the scenes conversation on the creation of their 2020 Impact Report.

Duration: 30:09


MUSIC  00:00

[“Brighter Day”]

Mark  00:11

We grew out of a community with very practical needs. It was for the average individual who needed to save for college or retire from being a school teacher or a mission worker. And they wanted investments that match their values.

Stella  00:27

So, we are doing this work, we’re thinking about how can we do this work more to make a difference.

MUSIC  00:35

Andy  00:47

Jody, welcome.

Jody Lowe  00:49

Hey Andy.

Andy  00:51

We’re talking about Praxis’ Impact Report. And there’s a specific reason why you wanted to in this episode, why?

Jody Lowe  00:59

So many of our clients are trying to get across a bigger story about who they are, what they do, and why their work is important to their customers. And I was really impressed with this report that the Praxis Funds put together to provide almost an annual report of their impact. And the ability to weave in some of the core messages about who they are and who they serve, and their really unique faith based sustainable investing approach really got reflected in this one document. How they put it together and how they use it, I think is helpful for other people. And that’s why we wanted to talk about it a little bit.

Andy  01:38

It’s a beautiful piece of work, by the way. It’s a gorgeous report. So let’s jump into your conversation with…

MUSIC  01:45

Mark Regier and Stella Tai.

MUSIC  01:47

Jody Lowe  01:59

Welcome Mark and Stella, I’m so glad that you could join us.

Mark  02:02

Glad to be here.

Stella  02:03

Thank you. Thank you for having us.

Jody Lowe  02:06

Let’s start by focusing on the what of this report. Can you tell me a little bit about the impact report and why you produce this each year? Mark? Do you want to start off?

Mark  02:17

Sure, you know, one of the hallmarks of Praxis Mutual Funds has been a historic commitment for our 25 plus years of trying to deliver real impact to the investors that walk with us and producing an Impact Report is a wonderful way to be able to communicate and assess the types of investments and the types of impact where we’re bringing through the funds. And so this was our first time undertaking, and it’s one that we’re excited to get underway.

Jody Lowe  02:57

And it’s a big undertaking. Stella, can you tell us a little bit about the process of getting all of the inputs from all the different people on your team to create this report?

Stella  03:06

So, we had to look at internally at who was participating in areas where we might consider impact. So our investment managers, our staff that handle marketing, our staff that handle our advocacy efforts, our community development, investing arm, and just thinking through who are all the participants internally, handling investments for us and then being able to get to them through a process of internal interviews, looking at impact methodologies that are out there that our peers are using to be able to report impact–which ones rang true for us? What was most true for what we do in our investment process? And then being able to pick out what might best illustrate the impact that we are making?

Jody Lowe  04:11

You know, I’ve gotten to know Praxis and I’m always impressed by the overall firm commitment to your faith-based stewardship approach and how it flows through the entire organization. And real impact is a phrase that’s often associated associated with Praxis and the work that you do. Mark, can you talk a little bit about real impact and what it means and how you live that every day through your work, but then how you are trying to reflect that through this report?

Mark  04:40

Yeah, thank you. You know, impact is probably, today, one of the most frequently used words in relationship to investments, and simultaneously also probably one of the least commonly understood words. It’s meant so much today that it almost means nothing. And so when we sat down and tried to understand what does impact mean to us, there’s a lot of work going on out there with ratings and with assessments of holdings. And while those elements are certainly important, from a materiality perspective around environmental, social and governance issues, we really believe that when we talk about making a difference through Praxis Mutual Funds, we really are looking to really bring about real change, change that is felt by people, by corporate policies, in the environment itself. And so when we say real impact, it’s that tangible impact, it isn’t just a shading of the investment to greener, to cleaner, away from the negative. Yes, we certainly hope we do that, but it’s how are we really delivering a difference. And, and we try to do that through things like corporate engagement, where we’re changing corporate policy, and working with companies to make their processes better, through investing in catalytic below market investments in disadvantaged communities in the US and around the world, bringing real hope to people who would otherwise not have access to capital. It’s those types of things that we think bring that sort of tangible difference. And we’re trying to report on that, and that’s why we called it real impact, because we want to distinguish it. It isn’t just about a better rated fund from an ESG perspective, it’s about a fund that’s really making a mark on the world.

Jody Lowe  06:33

That’s so interesting. And, you know, in any year, sort of trying to decide what you’re going to highlight in your impact report would be an interesting and significant undertaking, but this is not any year. This is a really unusual year. And I’m wondering if the two of you and your team had internal conversations about changing the direction of the report or focusing on, you know, what was going on in the news with COVID, and the economic crisis, and, and so much more, you know, with social and unrest across the country, and some of the race issues that came up, you know, how did you address those things? And was, was there sort of a specific pivot that you needed to take given the unusual year?

Mark  07:23

Yeah, so I’ll give it a stab at that. I mean, I think one of the unique things, and it’s sort of hard to understand for those who are picking up an impact report for the first time, but there is a really substantial time lag in the data being used. So a 2020 report generally carries data from 2019. So, in essence, the data of this report is pre-COVID, or something that we almost consider a whole other era in our world today. And so I think one of it was trying to figure out how do you report with a straight face, so to speak, at a time when, when the world feels so different? And one of the ways we did that? I think, well, it was it had a couple of implications, I think one was that we made sure in our president’s introduction from Chad Horning, President of the Praxis Mutual Funds, that we highlighted what was going on to not feel completely disconnected from the reality that we’re all experiencing today. So there’s some very helpful highlights of this current year there. The other, on the other side, I think we also really began to see how the work that we’ve been doing literally for years, is laying the foundation for some of the responses doing today. I mean, for us, the social justice movement that we’ve been feeling around racial inequality, wasn’t the first time that we began working on this this year. It is roots going way back. And we can see that in the in the work of the in 2019, and certainly even further back than that. So for part of it was seeing those connections, trying to do what we can to highlight them. And of course, it didn’t help that the very pandemic itself delayed this report even a little, a little further than it would have normally. And so we are coming to this really at the end of the year, rather than a little earlier than we would have liked. So those are things that I saw. I don’t know, Stella, if you saw other other connections.

Stella  09:24

Yeah, I agree with you, Mark. With the advent of COVID-19, and everything that was going on, we also got a lot of questions from people outside of Praxis talking about, well, you are a socially responsible fund. How are you making a difference in this in this crisis? And so it made us go back and take a look at what are our investments doing, where is our money flowing? So one, it really, really reinforced the work that we do, it reinforced that being involved in community development investing is important, because some of the organizations that we’ve invested in, and you will see stories throughout the report, have been very involved in communities of color, in low-to-moderate income communities that have been disproportionately affected by COVID-19. And, and we’ve actually put out separate articles outside of the impact report just talking about low-to-moderate income communities, and sort of synthesizing people in you know, what, what financially does this mean? What are the, how can I say it, what are their experiences during this really rough time? And then as investors, what are some of our options out there? So we are doing this work, we’re thinking about how can we do this work more to make a difference.

Jody Lowe  11:04

That’s really great. Thank you. Stella, you’re in Philadelphia. And Mark, you’re based in Goshen, Indiana. And obviously, impact is different in both of those places. I know Praxis does do community investing. And I’m assuming it looks different in each of your communities. Is that something that you think about as you go through your day-to-day work is the different kinds of impacts you’re having your own communities?

Stella  11:32

Yeah, I’ll take that first. Right here in Philadelphia, I mean, Everence is a larger organization is bringing our presence through federal credit union into the products that we offer at Everence, which includes Praxis Mutual Funds, so especially this year, as we’ve seen COVID-19 happening, I’ve been able to take a look at the work we’re doing in investing here. So what’s the impact on small businesses? What’s the impact on some of the work that our advisors are doing here in pushing out products? And how is that impact being felt locally in communities? So we are in Philadelphia, and the suburbs around Philadelphia, which have been hard hit by COVID-19. And looking at the Everence money flowing into this community has been just wonderful.

Jody Lowe  12:31

Mark anything about what’s going on in Goshen?

Mark  12:35

Yeah, we’re in a different community and Goshen, a small one, a community that’s also heavily religious in a number of ways. And so, in some respects, when we think of impact in this community, we’re often getting questions about some of the broader themes of impact that come from the types of companies we are investing in, the social issues that we’re working at, like, how are we raising, you know, for instance, safety issues for employees on the front line during the COVID crisis? How are we, you know, challenging companies to diversify their boards and senior management, with women and people of color to better reflect the country and to bring greater equality to this country. So, we’re seeing sort of broader themes coming from many of the folks in this community that are seeking investments that reflect the values that they hold.

Andy  13:33

Alright, Jody, well, let’s take a brief break. And now that we’ve learned why Praxis put their impact report together when we come back, we’re going to learn how.

Jody Lowe  13:41

Yeah, and I think we should talk a little bit about how they plan to use it.

Andy  13:45

Great idea.

MUSIC  13:45

Jody Lowe  14:04

We’re back now with Mark Regier and Stella Tai with the Praxis Funds and we’re gonna talk a little bit about how investors can use their impact report but before we get there, it occurred to me that we need to spend a few minutes talking about the pandemic and how we’ve all had to shift to working remotely and, you know, what this meant for the two of you not only in terms of your day to day working life, but also in terms of trying to get a report like this out. So can you talk a little bit about how you work together, you know, in this new remote environment?

Mark  14:35

Yeah, it’s been an interesting experience to develop as complex a document as this impact report with a completely remote staff, so well, much of the stewardship investing and investment team staff is located in Goshen. Stella has always been one of our remote employees and now everybody is sort of sharing in that experience. And so I think it’s really opened our eyes to what can be accomplished through technology. It does require a bit of trust with one another, we can’t just, you know, pop down the hall and see each other. But we have found, found good opportunities to connect via Zoom, via email, text, Zoom chat and other sorts of tools. And it’s, it’s been empowering because I think it encourages us to continue to be able to reach out to employees and new resources in a broader, in a broader way.

Jody Lowe  15:40

Stella, can you tell us a little bit about thoughts on and how this all came together?

Stella  15:44

Yeah, I think we, given the challenges that we faced with making this transition, I feel like we did very, very well. Some of the challenges, were not just that, at Everence, we were working remotely. But pretty much everyone that we needed to give input to this report was also working remotely. So being able to get out there, contact everyone, as they’re also making this transition as they’re probably delayed, and some of the things that they needed to do was interesting. But I think we have discovered a great tool to be able to do future projects and future work like this. They have been gifts in being able to all of us be remote, I think people have been able to pivot quite well. So I think that’ll serve us well, in the years to come.

Jody Lowe  16:46

That’s great. So, you know, you work with a lot of financial advisors who work with their clients on putting together portfolios, investments, including the Praxis fund, and how do you think they can use this report as they consider Praxis funds or think about investing more broadly for their for their clients?

Mark  17:07

Yeah. I mean, one of the things that we hear most frequently from advisors who sell Praxis Mutual Funds is that they are interested in telling the story of the difference that investments can make in the world. And they really, when we tell them, we’re working on our first ever Impact Report, they’ve been very excited about the possibility of having such a sort of substantial document that really clearly focuses on communicating all kinds of difference in, in the environmental impact we’re having in the, the sort of the social, and in other areas as well. So I think there there’s going to be using it with clients, I think it’s going to be helpful, even to institutional investors who are looking at, from an institutional level on how this aligns with the values of their organization.

Jody Lowe  18:05

Kind of brings it to life in a way that they can visualize it. Did you have something to add to that, Stella?

Stella  18:13

Yeah, sure. I would say that, from all the statistics that we see impact investing is growing in popularity. We know that younger investors are demanding more impact investments. We know that with women beginning to have more and more of investments, they are demanding impact investments. So this is, this will be one more tool for us to sort of open people’s eyes to what does impact investing mean, what difference can you make with your investments? And then also just to educate, probably advisors, who are trying to grow into this field a little bit more, and then investors as well.

Jody Lowe  19:04

So, you know, one, sort of delicate topic in the industry now is the topic of greenwashing, that there are a lot of people that realize that there’s a lot of interest in ESG investing, and so they’re trying to get on that bandwagon and represent themselves as sustainable investing investors without having maybe a history of doing this or a process or more robust approaches. And, you know, it’s good if people are beginning to do this, but Praxis has actually been doing this for a long time. And, you know, again, going back to the term we discussed earlier, the real impact, you know, you guys are the real deal.

Mark  19:48

Yeah, I mean, I hope people when they review the report, they will see what we’re doing in this route in this area. But first of all, I think, you know, if you’re a fund that is really making itself claim based on holdings, assessments and ratings, the greenwashing issue is really concerning because there could be companies saying things that are different from what you’re seeing in the ratings or, and you are worried about, you know, basically what is good, what is bad, what is in, what is out. One of the things that makes I think, Praxis Mutual Funds, and our really historic commitment to real impact is that greenwashing to us is primarily an invitation to talk about their practice. Because if you’re going to advertise that you’re doing a good job, when I come and say, well, that’s very interesting. Let’s talk about that. How does that happen? Why am I reading here how you’re not doing so well, when you’re telling me you are? It really, and we don’t shy away from those conversations. And so, and that is where change happens. And so, for us, greenwashing is an invitation to conversation that can lead to change. And so what we hope people see when they see our report is how that gets lived out and lived out in a range of ways that says, you know, being green, being good, being social, whatever label you want to put on it, isn’t really about one thing. It is really about a number of things and doing really everything that you can, you know, functionally do to help make the world a better place through the investments and the processes that are available to you. So, so for us this is an exciting opportunity to, you know, to really reach out to companies and make a claim, that’s fine. And we’ll talk with you about it. And, and these conversations have, at times been very productive in both the fixed income as well as the equity arena.

Jody Lowe  21:49

So we, you know, want to see the recognition for the good work that you do. And this report is one way to do it, but sharing these stories with the media, with clients and with the public, that can help get the story out. Do you think that can also help sort of reinforce the good work and help really make a difference in the community by raising awareness of some of this work?

Mark  22:11

I think it can, I mean, I really think that so many people today still don’t realize that how they invest and with whom they invest really can make a difference in the world, can help bring about change. And doing the work we do with Lowe Group through public relations and communications and marketing efforts, really, I think do help people understand just what’s possible, and that their values that they apply to every other part of their life–raising children, choosing a job, making purchasing decisions can also apply and be equally as effective in the field of investing. And so, I think that’s the exciting work that we’re able to do as we tell those stories and get that message out more fully.

Jody Lowe  23:01

You know, Praxis is clearly a leader in general, as impact investors, and you know, stewarding resources and the environment to good. But specifically, you know, you’ve been a leader, as a faith-based investor, and you know, and there are many different denominations and people who are investing this way. And, and you’ve, this year clearly seen growth and interest and faith-based sustainable investing. Do you expect that to continue? And, you know, can you talk a little bit about the stewardship approach and the sort of particular focus on investors looking to invest with a faith angle to what they’re doing?

Stella  23:51

Yes. I would say that, yes, I could see faithibased investing increasing quite a bit. Because when you think about investors who want to bring their spirituality and their spiritual beliefs into how they invest and what they are seeing is that it’s not just that we are making money from our returns, but how those returns being lead is important to us. So, what are the values that are important to these investors? Some might be, you know, I don’t want to invest in anything that has to do with alcohol or tobacco or pornography and other values that they have. So, faith-based investing is very interesting because it then is looking at the screening, what are the values, what are the things that you want to support that companies are investing in, and then what are the things that we’re avoiding? And faith- based investing does both. They will screen out what investors do not want to be supporting. And then how do we want to build community and societies in our world that we want to see?

Jody Lowe  25:12

I want to add one more question here, and then we can let you two get back to your very good and important work. But one thing that Praxis has done to us, they’ve really tried to create products that are not just for the elite. I mean, traditionally, wealthy families that had a lot of money were able to invest sustainably. But the products that you’ve created are really designed and meant to be for average families that are saving for college or saving for their retirement. These are not, you know, certainly there are many wealthy people who can take advantage of this. But it’s also suited, given the nature of some of the products, low-cost index products that are meant to, you know, work with people’s real lives. Mark, can you talk a little bit about how you’ve done that? I mean, that was intentional, wasn’t it?

Mark  26:01

Yeah, so the Praxis Mutual Funds grew out of a, out of a particular faith community, and now serves a very, very broad portion of the values-driven investor world. But we grew out of a community with very practical needs, as you suggest–it wasn’t endowments, it wasn’t high net worth individuals, it wasn’t private family offices–all of which do incredibly important work through some very sophisticated impact strategies. It was for the average individual who needed to save for college or retire from being a school teacher or a mission worker, and they wanted investments that matched their values. And so we’ve, you know, and, obviously, we aren’t headquartered in the, you know, financial mecca of the world. And so access to, you know, the best active managers was more of a challenge for us than it would be for others. And so we developed, you know, a primarily index based equity strategy, as well as a active fixed income approach, that allowed us to make the most of the resources that we have, while creating products that very consistently provide, you know, the sort of benchmark level returns that our investors need day in, day out over time that really deliver, at the, at a very reasonable cost, while also delivering those, those things that make a difference, that makes them feel like this is what they want to do with their money. And it really is, for us, I think, very satisfying to know that, while of course, we love large accounts, that we just really like many, many small accounts, because it means that we’re delivering high quality, consistent performing investments for people who, people who, just like us want to want to make a difference in the world around them, and, but yet need to make sure that their kids can go to college. So it’s been it’s been a really rewarding experience for us at Praxis to be able to do that and to constantly ask the question, what more can we do to add to the impact that our investors are having?

Jody Lowe  28:19

Well, thank you both for putting together this terrific report and for the good work that you’re doing and taking the time out to talk with us a little bit about it. So congratulations on this Impact Report, and thanks for being with us. Mark Regier and Stella Tai with the Praxis Mutual Funds.

Mark  28:35

Thank you. It was a pleasure.

Stella  28:37

Thank you so much.

Andy  28:39

Jody, this is been an insightful episode. I actually learned a lot, as you know, putting this podcast together actually, and having listened during the recording. Tell me your key takeaways.

Jody Lowe  29:00

One of the key takeaways all of us can learn is the importance of thinking about who you are and what your brand means. And then thinking about ways that you can reflect it, and I think Praxis did such a good job of thinking about their core messages, what they’re trying to accomplish, the impact they’re trying to have and reflect it in this report. You can see why they’re so widely respected in their field by so many faith-based investors, and sustainable investors follow what they do. They’re well-regarded and they’re impactful. And this report reflects that and it’s something that I think they will get a lot of use out of over the coming year.

Andy  29:39

It is. All right, well, Jody, thank you so much for your time and I’m really glad that you brought these two guests to the podcast, but thank you for your time.

Jody Lowe  29:50

It’s always fun.

[Brighter Day]