Matthew Illian joins United Church Funds in August 2020 as Director of Responsible Investing, bringing in broad experience in capital markets, personal financial advising and impact investing. We spent time with Matthew to learn how he started in the responsible investing field, the evolvement of responsible investing, his view on racial justice investing and what his family is passionate about.
How did you first come to the field of Responsible Investing?
After a decade of advising clients on how to create “optimal” and “efficient” portfolios, I became convinced that we were missing something. The best academic thinking in portfolio theory at that time had nothing to say about the common good and faith values or the impact of externalities. I had little to no idea what was going on inside the companies that I directed investment into, and this realization became more troubling over time.
It was great news to learn that there were investment practitioners who were also raising ethical questions about the intersection of profit maximization, ecological impact and human dignity (I hadn’t learned of UCF at that time). My first experience meeting such a community was when I attended what at that time was called the SRI in the Rockies Conference in 2015. While there I met the most unique collection of nuns, grown-up hippies and Wall Street-trained professionals who all were dedicated to engaging in the capital markets, with attention to the 3 Ps of People, Planet and Profits. It was a eureka moment – “I’ve found my people!”
The term “Responsible Investing” has evolved from what had been known as “Socially Responsible Investing.” What accounts for that shift in language, and how does it impact our investment practices?
In the early days, we had much less corporate transparency and data sharing, and so our tools of assessment were a bit crude. The Socially Responsible Investing movement became defined by blacklists of companies that produced tobacco, weapons or other products that were deemed values-incompatible. The challenge in growing the movement back then was that individuals often disagreed about which companies should be on the blacklist.
On the other hand, there were some important successes from these early efforts, including the formation of the Interfaith Center on Corporate Responsibility (UCF was a founding member), which helped lead the South Africa divestment effort. ICCR went on to provide important leadership in engaging with corporations over the years and an inspiring legacy of inter-faith collaboration.
The whole movement has become more sophisticated and engaging. Today, investors have access to evaluations of nearly every dimension of corporate life, which the industry has categorized in Environmental, Social and Governance (ESG) buckets. Once Wall Street realized that these ESG evaluations could actually enhance returns by providing a more robust assessment of corporate risks, nearly every money manager in the world jumped into the game. Speaking from the perspective of a faith-based investment team who has been at this work for decades, we still have room to grow, but it is great to see capital being more thoughtfully deployed. To say that we are now working from the framework of Responsible Investing is to acknowledge industry consensus, while also staying true to UCF’s long-standing commitment to this work.
Racial justice has always been a key consideration in Responsible Investing. How has the recent heightened urgency around the Black Lives Matter (BLM) movement affected responsible investment strategies and your own commitments?
This moment is asking us to reconsider every aspect of what we considered as business as usual. If this moment doesn’t change the way that money gets invested, then we will have missed an opportunity to dig into one of the biggest reasons why more progress has not been made on race in America.
I am certain that the UCF Board is committed to addressing racial equality within the investment manager selection and portfolio construction process. Although we have not yet been formally introduced, I was inspired to see Lisa Hinds, our UCF Investment Committee Chair, share: “We are specifically (and unapologetically) seeking institutional quality Black-owned, managed, operated and staffed asset managers whose mission aligns with ours.” And UCF practices what it preaches. When I was researching UCF to learn more about its staff and Board, I remember thinking, “This looks like a picture of a UN delegation!”
Before we had any children, my wife and I moved into the North Church Hill neighborhood, which is in the East End of Richmond, VA. We did this with close friends in a faith-inspired effort to live in greater solidarity with those who had been treated as “other” for generations, simply because of the color of their skin. We have now lived in this neighborhood for over 16 years, and we’ve experienced firsthand the disparities between historical investment in our parks and our schools versus in the “white” side of town.
Yet even after all these years, the BLM movement has shown me that as a white man, I haven’t really been able to hear the depth of pain that my black brothers and sisters and other people of color experience. For example, I never knew that one of my closest friends from college, a teammate on the Track and Cross Country team, never felt comfortable running on his own outside of his home neighborhood. This is one of the nicest guys you would ever meet, and yet he knew that when people are led by fear, they could view him as a threat. So, I’m recommitting to making intentional listening to my brothers and sisters of color a part of how I move forward in this moment.
What drew you to United Church Funds and to this particular role?
The commitment of UCF to putting faith values into action is what drew me here. I have used the parable from the Sermon on the Mount about a tree and its fruit to guide my path forward. When I look at UCF, I see a long legacy of good fruit, and I look forward to working with this team and their clients in seeking in a more just and sustainable future together.
As 2020 continues to present us with an unprecedented series of crises – most especially the coronavirus pandemic and its impact on the global economy, as well as the need for immediate systemic police reform – what are your top priorities for UCF’s Responsible Investing program over the next six months?
I am using my first several months on this job to listen and learn from both the staff, Board members and UCF’s trusted partners. My top priority is to keep all the good work that UCF has been doing moving forward.
Tell us how your family is managing the challenges of COVID-19.
We have four children between ages 3 and 13, and the closing of the neighborhood pool this summer really hurt. We’ve made do by spending more time outdoors, and the best purchase we’ve made was a small above-ground pool to let everyone cool off and get some energy out. To all the parents of small children out there, I feel your pain!
What are you reading these days?
To prepare for this job, I decided to reread Walter Brueggemann’s The Prophetic Imagination. I believe with Brueggemann that we need to constantly cultivate new awareness that resists dominant culture and offers a picture of what our world could be. As a Christian, I find Brueggemann’s illustrations about how Jesus of Nazareth offered cunning criticism and a powerful response to the dominant culture particularly inspiring.
Click here to read Matthew Illian’s bio.