Transcript of Erika Karp

Gino Borges:

In the impact space, a lot of us just see our front-facing personas and a lot of our public successes, but there’s also a part of us who are in the impact investing space that are often confused and trying to make decisions in the midst of fog and doing our best. This series is to share notes, best practices and the human journey. A lot of us come at this journey from different vantage points, and some of us are just beginning the journey. Some of us are halfway through and some of us don’t even know where we’re at in this process. It’s been a very successful series so far and continues to be as we’re here with Erika Karp, the founder and CEO of Cornerstone Capital. Before she began as founder and CEO of Cornerstone Capital, she was managing director and head of global security research and UBS Investment Bank and also as a founding member of sustainability accounting, a standards board. Erika, you’re in a lot of top 50, and top 100s. Amongst them, a top 50 Women in Wealth by Adviser One, one of the Purpose Economy 100. Also, part of the top 100 of the Good 100 and one of the 50 Conscious Capitalists who are transforming Wall Street. I’m sure there’s other top 100s you’re part of you probably don’t even know about. I’d like to jump in on what life looked like way before you even verbalize this word, impact investing. Take us back to that world before this evocation of consciousness and then we’ll work our way forward.

Erika Karp:

I’m going to take you way back. I’ll take you way back when I was about five years old, and my dad was a lawyer. He did securities work and was a very fine lawyer. He cared a lot about people and was very smart. One day I remember he was on the phone with clients and they were talking about some kind of deal. I remember my father looked at me; he was in a good mood and he showed me, putting his hands up. He said, “the stock market is so wonderful. It’s so beautiful that on your word, you can do millions of dollars of business – on your honor.”  I just always remembered that.

Then, from the time I was five years old, somebody would ask me, what are you going to do when you grow up? I’d say, I’m going to be a stockbroker. Now, I had no idea what a stockbroker was, but I knew that I was going to be a stockbroker. Over the years, I learned the value of money as a tool, as an instrument, and that helping people is honorable. So again, over the years I learned, I studied economics, and I studied finance. I really do think, since then I’ve always thought that capitalism, it can be beautiful, it can be good. I went to Wharton Undergrad and I read the basic books that you read as an economics major, Adam Smith on the Wealth of Nations.

I remember people would talk more recently about Adam Smith and the Wealth of Nations. It’s economics about maximizing profits. Before the Wealth of Nations,Adam Smith wrote about the theory of moral sentiments, and that’s about people. It’s really humanistic. He talks about the extent to which people care about the circumstances of other human beings. You think about traveling, and you think about globalization, and all the good stuff about capitalism. It’s a bummer that Adam Smith didn’t warn us about the negative externalities that happen with capitalism. I think about those things a lot. Then I went to Wall Street. This is now 25, 30 years ago.

Most recently before founding Cornerstone, I was at UBS and I was managing global research. I got to see global industries and global economics and the capital market structures. I realize that I can use what I know about capitalism and the wonderful research organization but that I had to learn more to understand those pivotal environmental, social, and governance factors that have to go into the investment process.

Gino Borges:

I know conventional Wall Street and likely your training at Wharton didn’t use three- dimensional thinking about finance. At that particular period of time it was very one dimensional, maximizing shareholder value. Where did your awareness of the limitations come into play and your edge to these limitations? Take us through that process where all of a sudden you’re a woman at a Wall Street firm, trained in one dimensionality, but yet you could feel and were living with those the limitations still doing the work at Wall Street. What happened? Was this a specific room that you’re in, specific conversations, a specific deal that you recommended that you realize “Oh No!,” nobody paid attention to the environment here and we just allocated X millions of dollars toward this particular funding.

Erika Karp:

There wasn’t a single moment, but I’ve always cared about people. I’ve always been sensitive to how stuff feels. I was the first out-lesbian on a Wall Street trading floor. That was a first. What I have to say is that was really, really hard at the time, about 25 years ago. There were a lot of times I feel like in my life that I felt stuff that maybe was a little different, feelings I felt that other people hadn’t felt. I’ll give you an example, and this isn’t about sustainability. I remember in my first year or two, I was at Credit Suisse before I was at UBS. I was an institutional equity salesperson on the desk, and they were pushing me to pitch a deal. I knew I had done a really good job on it and they were kind of pushing me to go a little further than I otherwise thought I should. And I did, I pushed too hard. I went against my gut and it was a mistake. So what I learned early on was I don’t go against my gut.

Then when you see something that’s not quite right, you question it. You’re always walking a line. How hard do I question? How hard do I push back? I remember there was one announcement at one of my former firms that our research analyst was now going to be reporting to the head of banking. I thought, wait a second, that’s not okay. I would always ask questions and look with a critical eye at things. That’s always what’s made the difference.

I remember I was with a research analyst. I was taking her out to see a client and this was a very senior portfolio manager in tech. The analyst said something really interesting and the portfolio manager was Peter. I remember Peter looked up, saying, I hadn’t thought about that before. I have to tell you, I actually got goose bumps. “Oh my God, I have learned about Peter’s decision-making process.” I learned that finding those really interesting questions that somebody hadn’t thought about, that’s great. That was the start of 25 years of looking for questions that people hadn’t thought about. That’s what gets us to ESG, right? It’s not  a semiconductor analyst’s first thought to ask about water when a semiconductor company is putting up a $3 billion Fab, but they have to ask about water, right?

We know that it’s not your first question of a shipping company to ask about the safety track record and their fuel economy. Rather, you’re probably going to ask about pricing and revenues and all that. So ESG analysis and again, this is what started it for me, is a matter of finding different questions that you have to pursue. They don’t come to mind first. All the externalities associated with capitalism, people weren’t trained to look at them. I was fortunate enough that I started becoming trained to look at them, and then I was part of training others and everyone to look at these things. We can talk about the true cost of business and then we can talk about financial capital and human capital and natural capital, all of them. That desire to ask questions and to understand the impact of investment decisions on the whole world, that’s core to me. Maybe that comes from having some diverse experiences.

Gino Borges:

How much has your coming out as the first lesbian on Wall Street influenced your idea of what it means to bring your whole self to the investing equation? It’s like you’re looking at the whole investment now, but how about the whole self? How has that really influenced your approach day to day at this point? It might seem long time ago, but obviously culture’s made headways with sexual orientation with a long ways to go obviously. Contextualize it for me. What does it mean in the impact investing space and how has it shaped how you conduct yourself today?

Erika Karp:

The experience has influenced and shaped everything. I was married to a man at the time when I figured myself out and later I was with the woman who became my wife. I also have three children. I’m as different as any other lesbian as people are from each other. One of the big things is that you learn a lot about respect. You learn a lot about self confidence. Being closeted takes up an enormous amount of psychic energy when you’re changing pronouns, when you’re making up stuff about where you were or where you weren’t. When you’re genuinely worried about your career, your colleagues, your boss, your clients, it takes up a huge amount of energy.

It was probably a year long process between when I decided I’m coming out and when I actually did it. In that process, I had to gear myself up to make sacrifices. That’s one thing about understanding and real respect for LGBTQ rights. It has to start from respect. In the corporate world, the company has to be willing at times to make tradeoffs and sacrifices. I’m not going to put a plant in Saudi Arabia because you won’t respect human rights, those type of decisions. Since I’ve been out, I have never been more creative or engaged or innovative or articulate. I couldn’t imagine not being out. But I do remember the stress of coming out. One day, not for this call, but I’ll tell you a fun story.

Gino Borges:

I’ve met your partner and one of your three kids as she was in the office one day when I was there visiting with you. One of my interests is, as an impact investor, is also understanding, creating impact families. Meaning that it’s not that this individual “Gino Borges” that just goes to an impact gathering to come back and report on it. Rather I try to see my living with impact also as integrating my family into it. Take us through how they have been integrated and how they haven’t or how you wish it might be a little different. How does your family and your partner approach these conversations? How do you talk about your work with your family and what level of interest and engagement do they have in what you’re doing?

Erika Karp:

For me, my personal life and my work life are really very integrated. Of course, we have the normal fights that families do. I work too hard, I travel too much. But there’s some really great stuff. Sari is a professional jazz singer and a clinical psychologist. On the jazz singer side, it’s so interesting to learn from. Jazz is about collaboration and it’s about experimentation and it’s about respect. It’s about communication. I actually interviewed Sari for an article that we wrote called Jazz Inspired Finance. I’ll show you the article after the call, but you know, the best of jazz, the characteristics like I just mentioned, are the same as the best of finance. My point is, I can find inspiration everywhere. Sometimes,  musicians and artists do not feel the kind of respect and certainly not the commercial appreciation that they should.

Sometimes in the sustainability world, when we get to do stuff that fixes that through investing in the creative economy, we actually write about it. We show examples that we do events around. Sari and I completely combined when it comes to our children, or the making of the children. Our children are three different ways, single donor, but three different ways to make these babies.

I remember, and this was when I was at UBS, that each time we had a baby, we would ask for a benefit that UBS was like, hmm, I don’t know if we do that. They said, we’ll be back. Then they came back and they said yes. I’d ask, will you pay for the sperm that we need to buy for me, but I’m not infertile. Will you cover it? Yes. We need to have maternity leave for me, even though Sari gave birth to the baby, that’s okay. Right? Yes. We need your adoption reimbursement payments because I have to adopt my own baby because we’re in the state of New York. You’re ok with that? Yes, yes. And each time it was precedent, right? Each time there was no rule. They didn’t know that each time they came back and said yes. From the standpoint of human rights, labor rights, and diversity and inclusion; each time I was very fortunate to work in a company that made the right decision. So that’s another very explicit example of how I bring the personal into the business.

Gino Borges:

Take us into that area of how jazz has shaped your insights into creating this impact advisory firm from scratch. It’s not easy. Give us a little bit of a behind-the-scenes look at what it was like to say I want to do this and what followed after; the first couple of steps.

Erika Karp:

That’s really interesting to think of it together. With jazz experimentation, communication is a back and forth thing as it relates to respect and collaboration. Some of the things that I just said are not present to the degree that they should be in large institutions. With the founding of Cornerstone, it was very progressive. It breaks down the silos on traditional Wall Street. It breaks down silos between investment banks and asset managers and asset owners. It brings transparency, and it basically transforms the existing norms. Progressive jazz is about experimentation and making something beautiful, making something that people can feel. When it comes to getting people to feel, you can align people’s values, their priorities, and their aspirations with their finances and their assets. That feels great and that’s progressive, but you need to know how to do it well. In founding the company, we brought together some of the best pieces of the capital markets and turned it into something that I think is transformational, a platform for growth and a platform to turn different pieces into something beautiful like jazz.

Gino Borges:

Who is it that you help? Where is your firm currently at in the process of its experimentation?

Erika Karp:

When you’re building a new highly regulated firm, it takes a while. So you find the people and the pieces that you need. You’re building your back office capability, you’re building your front office reporting capability, you’re getting your SEC registration, and you’re getting all the pieces together to figure out the advisory proposition that you want to create. Then it’s an ongoing process. At Cornerstone, we advise individuals and families and foundations. We have about  $1 billion in assets under management and we’re going to continue evolving that business so we can figure out how to scale impact investing. We want to figure out how to really democratize impact investing, give access to the whole world, to the kind of investing that’s really progressive. It’s going to make a difference to achieve and whether you want to call it the sustainable development goals or personal aspirations of our clients, it will be an ongoing experiment. Our job is to lead the way and stay ahead of things. An example of that is our new access impact framework, which is again, our vision of how you report on people’s social impact. Given their portfolios, access to us is the key.

Gino Borges:

A lot of us from the outside don’t understand really what’s happening in the advisory world, but we read articles about Robo-advising and ETFs and index funds. How are advisors going to stay relevant in five, ten, fifteen years from now with artificial intelligence and these algorithms that really can check a lot of boxes in essence? How’s Cornerstone going to carve out a moat per se in an advisory world that’s largely being commodified?

Erika Karp:

It’s very challenging and we’re seeing huge pressures. That said, I believe there will always be a part of the asset owner world that will need genuine human advice, thought and reasoning. I believe that there are two things in life that don’t become a commodity. One is ideas, new ideas; the second is relationships. Everything else, yes, becomes a commodity. When I think of our new access impact framework, this is a framework that’s intended to bring humanity back to the idea of impact and sustainability. In looking at the sustainable development goals, these seventeen big audacious goals, the goals are great, but they’re un-investible. Thus, it takes human beings to think about, how do we get to that?

You can do that with AI and machine learning, but the core of it still is a human sensibility. What we do is think, is there a single common denominator around the sustainable development goals? The only thing that we could think of that is a denominator for all of them is the idea of access. If you don’t have access to water, you’re dead. You don’t have access to food, you’re dead. If you don’t have access to capital, you’re not going to scale solutions. If you don’t have access to broadband, well you don’t have access to education. Right? So access, access, access, that’s what it’s about. When we sit down with a client and say, look, let’s talk about what you care about most and then if we take those sustainable development goals and use that access as a roadmap, what are the access points that industries give you, that different companies give you, that different portfolios give you and we’re going to be able to show you a heat map for where your values align via the idea of access with your portfolio. When we talk about this, it’s very human. It’s not just analytical. We think you need both. If you can’t move people, you can’t move money, and we’re trying to move money for impact.

Gino Borges:

How is access relevant to the products and services that you find yourself aligning? Do you assess the degree of access? For example, if I’m a client, how does access play out in those conversations?

Erika Karp:

Client by client, we know what they care about. Let’s say we have a client who says I really care about the oceans, the health of the seas and the health of life below water. I think that’s the SDG 14 but it’s not in front of me. We go to our framework and say, SDG 14, what gets you there? What are the things that are necessary to have healthy life below the seas? And then you go back and you look at the other SDGs and you’re like, oh look at the number again. Look at number 12, which is about the circular economy, plastics and recycling and the manufacturing process.

You start with one of these big SDGs, then you’ve go to one that is more investible, more clear. Then we find products and funds that are serving that different SDG than the one you said you were interested in. You have to know what the connections are. You have to know the next issues and then you have to have products. You have to have companies with fund managers that are addressing recycling or the culture of recycling, the closed-loop-type economy. It’s a matter of playing around with the connection and the way we use connection through the idea of access. It’s our roadmap to get each of the SDGs to align with clients. Then obviously we diligence the hell out of hundreds and hundreds and hundreds of managers to take a look at their holdings to see what kind of acts that manager is giving to a particular SDG.

Gino Borges:

People repeat ad nauseum without being reflective and they’ve just normalized the language of impact investment being measurable by blank, blank, blank. They use the word measurable maybe because it just feels safe and secure. I know that there’s a certain amount of measurement. Where does measurement begin and then where does its limitations start to emerge? Where does it have to actually choke out more expansive ways of seeing an impact?

Erika Karp:

It depends on where measurements begin. Again, that’s my economics training. It depends. You can’t measure something that you don’t know what it is you want to get to. First, we say here’s my objective and then I can figure out how am I going to measure it. The objective has to come first. When people throw it out there, it’s measurable. The intentionality as it were. Now here’s the second part of your question – the measurability. Looking at hard metrics is problematic because the data out there from corporate disclosures on material factors or even not material factors, the data is really poor quality still.

We’re getting better at that with standards for disclosure and the work of GRI. But the reality is the quality and the data still remain weak and not comfortable. You can’t really make projections off it. So we have a problem. If you try to give a hard number for some measure of something,  I’ll pretty much guarantee that you’re wrong. So if somebody you’re going to create a million liters of water and this is going to affect ultimately the GDP of some nation by X, again, it’s going to be wrong.  I would rather see a concerted effort to move towards the idea of measurement while we know the objectives that we’re looking for. I’m not waiting for the perfect wheel. We all know what Aristotle said.

With regard to our measurement system, we are admitting and we’re not trying to get perfect data out of what’s out there on public ratings, rankings and data. We’re saying, here’s our objective on behalf of our clients and we’re going to have a really strong roadmap so we can start getting there. Ours is like, quantum mental. It’s part qualitative and part quantitative with a reasonable structure for how to do it. We’re not pretending to have accurate data. By the way, I would argue thinking about access is just as much a more humanistic approach than just telling us how much carbon emissions we’ve delayed. I’m not resigned, but I’m not waiting until we move perfect data forward.

Gino Borges:

There’s a particular article for you guys in that. I think that’s very nuanced yet, communicatively available to people to understand. We haven’t gotten there as a space yet, but I’ve really liked your idea of access as a humanistic lens and then it’s part of the objective. I liked the idea of starting off with the objective, understanding where the quantitative begins and ends. Yet it’s like the massaging happens with the access. I’ve been thinking about it. Are we trending in a certain direction? Do we need to know everything down to the third decimal point? I think if the impact space can just get really comfortable and hold itself responsible for trending in a certain direction rather than going down to the third decimal point, I think that we can stay out in front of the movement and we can capture more of the expanding universe that way as opposed to the mindset of wanting to appropriate the one dimensional tools, the reductionist tools.

It really has me thinking about another issue that’s related to this idea, the connection between sustainability and growth. On the surface it seems sort of contradictory. I’m wondering how you have come to grips and manage these terms that we use in impact investing space and then the geopolitical realities of the larger economy. How do you box and weave and dance with this idea of an obsessive growth mentality on a geopolitical level? Yet at an impact level, we still use that language because there’s our financial value. It’s still tied to economic growth and yet sometimes it really cuts in the sustainability if we were authentic and genuine about it.

Erika Karp:

I love this discussion. This is about the markets and how the markets and sustainability are tied, and they are. The big issue is timing. By the way, sustainability is not enough. We need to go beyond sustainability. We need to be regenerative, we need to be inclusive. So if you go back to economics, it’s tricky with regards to some things because there’s always a debate. We believe that income inequality and wealth inequality is a drag on economic growth over the long term. We believe that globalization and global trade is additive to economic growth over the long term. We believe that diversity is just an absolute imperative for economic growth. So, we have these fundamental views and you take those and you apply them to whatever else you’re doing, but the timeframe does matter. For instance, when we talk about market structures. People talk about short term trading or statistical arbitrage or anything like that. There are people in sustainability that say that’s terrible, or people talk about derivatives, and some sustainable investors are like, that’s terrible. Both of those examples of market structure realities, I don’t think there’s anything wrong with them unless they undermine the structure and the operations of the market. Then there’s a problem. Then you need regulation. But just by virtue of some people being short term traders, that’s okay. The reason I use those examples is because we’re talking about economics and capital markets and I think it’s good to sometimes separate value judgments and make it practical. Again, I spent a lot of years almost being subversive to talk about issues of ESG and sustainability to mainstream analysts that didn’t want to think about stuff that was ideological or divisive or politicized.

You talk about fundamentals and when it comes to the stuff that we all know is critically important among the ESG factors, to a company’s long-term behavior. That’s how you can feel that even if someone’s going against you, you know you’ve got your principles, you’ve got your views of how the economy and how markets work. Let me give you something else that to me is a perfect example of a political and economic mess up. I don’t want to talk about politics much, but Obama should have gone after infrastructure as a huge policy; the biggest thing he should’ve gone for, because the word infrastructure is not political. It’s not divisive. It engages everybody and a great infrastructure program would’ve been incredibly stimulative economically. By virtue of technology it would have been built out in a much more sound way in terms of sustainability. The new installations are more sustainable. We’ve got the technology. We do have the capital to do what we need to do, to have a sustainable or even regenerative economy. We just don’t have the force of will and we don’t have the political force of will to do it. For me it’s still with sustainability economics simultaneous, it’s not one or the other. It’s a matter of understanding what you’re doing. And it’s a matter of conviction.

Gino Borges:

Can you articulate the difference between sustainability versus regenerative?

Erika Karp:

With sustainability, we can sustain. We can keep doing this well with where the world is right now. If we keep doing this, we’re done. We’re screwed. By the way, the earth really doesn’t give a damn about whether or not human beings are here. We’re in the sixth great extinction, we’re losing thousands of species a year and when’s it going to be human beings. The earth doesn’t care. If we keep going on sustaining what we’re doing, we’re done. Regenerative, that’s a big aspiration. You had John Fullerton on here, so he would have more to say than I do about this, but we are talking about major systems change. The idea of the circular economy – systems change.

That’s what gets us towards being able to give back and not just extracting, which is where we are now. One day we don’t even have to have the concept of waste. That’s where we can get to. That’s super exciting. Unfortunately, I don’t think that’s going to happen in my lifetime, but it is a nice aspiration. When I talk about humanity’s relationship to capitalism and to finance and to investing, it’s one of the reasons we really do think that access is the way. It makes people feel that they can give back. It’s not just I give my money, I get a return, and that’s the end of it. It’s I invest my money, I get a financial return, and look what I am trying to give to the world.

Gino Borges:

How are you helping people get to the feeling part? What do you do practically to get people to feel?

Erika Karp:

This is why the ETFs and AI and all these other things out there won’t entirely replace an advisory proposition. When you’re with someone, when you’re sitting there, there is energy, there are signals. There is learning. That’s how it gets to feeling. This is the whole thing about the next generation of wealth. They’ll be damned if they sit there and talk to somebody that there’s no authenticity and no feeling and no kind of urgency. That’s not what people are ultimately are going to want. When you sit there with someone and sometimes people, investors don’t actually even know what they want for themselves. But you start to see energy, you start to feel energy around something that you’re talking about. You look for the heat, and we found with access that it’s resonating with people. I think there’s one answer to how you make people feel. My wife’s a psychologist and reminds me that I need to do active listening and it needs to be empathic. So I do my job.

Gino Borges:

What really makes the impact space unique besides considering externalities would be social governance and environment and so forth. What have you noticed as the difference between the kinds of people that tend to gravitate and gather with the impact intentionality versus the kinds of people that gravitated toward your previous investment banking experience?

Erika Karp:

I make more friends every six months to a year than I did in 25 years. I think what’s cool about our discipline is that you almost immediately know that you’re meeting someone who’s aligned in their sensibilities to you. Right away you have stuff that connects you. I think that’s the biggest thing, that it’s an early connection. It doesn’t take as long to feel and sniff somebody out in terms of their priorities. It’s almost the opposite of mainstream Wall Street. You meet someone on a trading floor in New York and you can assume they’re probably an asshole. In our discipline, you meet someone and you find out what they’re interested in. What that means is that relationships are built even faster, which is why the discipline, and those of us in it, can accelerate the impact frankly. So again, that’s another thing that’s emotional.

Gino Borges:

Yeah. Where do you see it evolving five to ten years from now? What does this space look like?

Erika Karp:

Hopefully, we’ll have seen the quality of the data dramatically improve. Hopefully we will have aligned along the idea of the data reporting and the form and nature of it. Purism in this case I think is not helpful. There are those in impact investing who I think may be purist in the context of, you can only do impact with private equity, private deals. Now, I don’t believe that personally. I think you can get impact from everywhere. You have that intentionality. I will see that the purest maybe come around because if we’re going to move the quantum of capital, the trillions, we need the public equity markets and the private markets as well.

With regard to the language, hopefully we’ll see a language that is more pragmatic and analytical than ideological. One day, we won’t have to have impact and sustainability in double bottom line value, it’s just investing. I don’t know how long it’s going to take, but it’s just investing. I also hope that we can side step some of the risks that are going on right now. We’re in a place where there is a bunch of green-washing in places. There is the introduction of a huge number of so-called sustainability or impact products. The problem with that is they’re not vetted to the same degree. Sometimes it is just marketing. Sometimes it’s purposeful, sometimes it’s not. But there is the risk of a bad product being introduced and that potentially undermines everything we’re trying to do. So we’re at a risky point here. We have to sidestep that and diligence in managers again is what we do all day long and it’s really important. But again, we’ll be in a place hopefully where this is what people do and hopefully firms like mine can keep moving the ball forward. In terms of both qualitative and quantitative aspects of sustainable investment.

Gino Borges:

When talking to multiple generations, when you’re speaking to families, do you notice any key distinctions between millennials versus the elder generation in the same families? Take us through what you’re seeing trending. What difference in questions are they asking?

Erika Karp:

There are traumatic differences between the generations, even third or second generations are very different. What we’re seeing in the older generation is still a high level of skepticism if you can invest both for competitive financial returns and social impact, a high level of skepticism still. In the younger generations, you’re feeling this is what makes it good for me. You’re feeling the urgency. That’s great. They’re pushing the urgency through. They’re demanding the authenticity. They are very knowledgeable and educated about what’s out there. They are very cynical about the kind of heritage, legacy investment banks, and the large wire houses, which is understandable. They’re working very hard to bring the older generation along in terms of what has to happen in the world. It’s quite a different conversation. We are seeing in the good situations that the older generation is giving more and more control to the younger generation.

And they’re starting to, at least that I see, the smart ones are starting to be willing to be educated. This is an interesting thing at big investment firms and the big investment banks and wealth managers. The older executives don’t think they have anything to learn from the younger executives. That is just stupid. When I think about my little one, the one you met Molly, who’s 11, I have so much to learn from my 11 year old. It’s wonderful. I think the most engaged families realize that the younger generation has a lot to teach them. Because it’s a different world, between social media and big data, their brains are different. They’re faster, and they’re smarter, and they’re more demanding, and that’s okay. So yes, it’s still quite a different conversation. For us, it’s helpful that Cornerstone has half mainstream Wall Street and half the sensibility of impact and social consciousness. So it works.

Gino Borges:

Do you bring them all in together? Do you actually curate and psychologize the gatherings or are you speaking to them individually? What do you really want to learn more about?

Erika Karp:

We have to do both. In some cases, you can see that that older generation, they’re just not going to get it. Even if they let the young guns go, you have to figure out when there’s not even a chance of openness to get it and spend that much time. A lot of the advising we do is that with the whole family. Everyone knows families are different and complicated. Sometimes you’re with the whole, sometimes you’re with part, sometimes they’re telling you stuff that the others don’t know, but really we have to do everything. What’s really gratifying? I’ll give you an example. We were with a family and they thought that their biggest interest was climate change and solutions.

We’re talking and talking and this was a whole day facilitation. As we’re talking, we’re taking notes and you see what subjects come up a lot in the conversations and they didn’t even realize it, but the subject of gender equality, gender equity–it came up a lot in almost every conversation over hours. We said to them, do you realize a lot of what we’re talking about relates to gender. Is that something you want to delve into?

They were like, “Oh my God!” They were delighted; they had no idea. It’s very much like that very first conversation I had 30 years ago with an investor who said, “Oh, I hadn’t thought about that.” Those are the conversations that are really satisfying as an advisor.

Gino Borges:

Are there any last words that you’d like to share about your journey to impact before we close it out?

Erika Karp:

The last thing that I would say is, after 30 years on Wall Street, I feel like a kid in a candy store. I have more energy. I’m optimistic even saying those things look really, really dreadful. I’m still optimistic and I’m having a ball.

 

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