In the latest episode of Dollars & Change: The Expert’s Guide to Sustainable & Responsible Investing, I sat down with Maggie Kulyk, the founder of Chicory Wealth, a firm focused on integrating money with meaning.
Peter Krull: So you’ve talked a lot about values and how you really wanted values to be an important part of Chicory as you create that. So what are those values, and how do you integrate those both into your relationships with clients, but also into portfolios and things like that?
MK: Broadly speaking, we appeal to people who are politically progressive and who care about a complex of things, which is why we don’t direct index. The direct index is a collection of values, and your client goes through and checks boxes about what they care about.
And my position on this has been, look, I have yet to meet the person who says, I really am worried about the planet, and I don’t want to invest in fossil fuels. What I really want, though, is more mass criminalization and handguns. Could I get some more private prisons on this side? That’s not the way this works.
So as we began to build out our portfolios, we start with, okay, what are we excluding? Then we look at fundamentals of what that universe has left. And then we look at environmental, social and governance metrics relative to the company, what matters most in relationship to what the company is doing. And then in an ideal world, we’re also finding companies that are positively contributing to the (UN) Sustainable Development Goals.
PK: I think for most retail sustainable clients, they want to feel like they’re part of the solution. They want to feel like what they’re investing in is the solar panels on the roof or the company that’s helping build resilience into our systems. And so we’re going to need more and adaptation and resilience and infrastructure investments, which we traditionally have not seen in sustainable or SRI or whatever you want to call it.
MK: Yes, I agree. So, for example, to give you a tangible example, we have some utility companies in our portfolio that do have some exposure, for example, to coal. But they’re in the midst of transitioning more and more to sustainable. And we believe, for example, that nuclear power is part of that transition. And so we have companies that have nuclear power exposure, where sometimes we have to explain that to a client as to why that is the case, why is that company in there?
So we have a kind of core portfolio that is, I would say, a little bit more blue chippy. And then we have a sustainable opportunities portfolio that is more small- and mid-sized companies that would probably be more focused, more laser-focused on solutions. And we have some of those companies in our main portfolio, but more in the sustainable sector.
Watch the complete interview:
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