Stephen Brenninkmeijer on the Evolution of Impact, Technology’s Potential, and Why We All Need to Do Our Part
Stephen Brenninkmeijer recently stopped at a petrol station in his neighborhood in Surrey, England. He purchased only a newspaper. This prompted the clerk to ask: “Any petrol?”
“And I said, no, I have an electric car!” Brenninkmeijer says, recounting the story with enthusiasm.
For more than a decade, climate change, and the technology surrounding it, has been a central theme in Brenninkmeijer’s work. As Chair of the Supervisory Board for the European Climate Foundation, a role he accepted in 2018 after having served on the non-profit’s board since 2016, Brenninkmeijer is in the throes of the most pressing conversations surrounding the environment today. “You learn so much in that space about energy transition, pollution, food, land use, [...] and renewable energies,” he says.
Brenninkmeijer’s involvement in the climate conversation came to him serendipitously. In 2002, he made a professional pivot, having shifted to impact investing after spending a long career in his family’s textile and retail business, C&A. Some of Brenninkmeijer’s earliest work in impact involved providing more inclusive capital for entrepreneurs, many of whom only received support through philanthropic grants. “We experienced very quickly that as soon as you gave people a loan, they felt much more respected, and they felt much more important,” he says. In 2007, he founded Willows Investments, which includes a portfolio of ventures that all have a social-focused impact, including Auticon, which links adults on the autism spectrum with meaningful IT jobs, and the impact fund behind The Big Issue, a leading UK newspaper that employs people facing poverty and homelessness.
Brenninkmeijer had dived deep into the impact worlds of development finance, education, health, and “general work with social entrepreneurs” rather quickly. Climate change, however, was “not really on his agenda.” The issue was very complex and technical, he says, thinking he would steer clear of it. But after attending a few board meetings and seeing “the inspirational work that these people are doing” and the impact they create, Brenninkmeijer changed his mind. “I realized, for my grandchildren, I should join this.”
Today, Brenninkmeijer carries his role with ECF in tandem with his impact investing endeavors. (Brenninkmeijer is a member of the Beyond Capital Ambassador Program.) This work has opened a new world of ideas and perspectives. It’s also presented many ways to “link some of these topics in the impact investing space,” which he unveils in our conversation below. It turns out, like his electric car, one of the key opportunities is technology, which he says people are starting to grasp. “The old model doesn't exist anymore,” says Brenninkmeijer. “We have seen that through this crisis that we're going through is that there is a strong link between human health and environmental health.”
“What we have also seen is the resilience of environmental health over these last ten weeks,” he continues. “The environment has been able to really establish. I hope, and I am stubbornly optimistic, that the populations will understand that something has happened for them and around them— and that we want to keep it. We want to keep that bird's song. We want to keep that clean air. We want to keep seeing these starry skies.”
A Q&A with Stephen Brenninkmeijer
In considering technology, climate change, and impact investing opportunities, where are you seeing great potential?
What we are seeing is that the attraction for impact investors is toward technology that is already out there. You start looking at e-mobility, clear air, transport, air traffic. They're wonderful ideas out there, which have a strong upside from an investor's point of view, and also a strong upside from an environmental point of view. We see that within the climate debate, the new climate economy will unlock about three to four trillion dollars of investment opportunities within the next ten years. It is very clear that these investment opportunities will have a very strong environmental impact.
Look at what Volkswagen has done: They announced that they'll become carbon neutral by 2050. This is a systemic change. To achieve that, the steel that they're sourcing has to become neutral. The aluminum that they're sourcing has to become neutral. The tires. The electronics. The whole supply chain is now looking for new ways of creating value for that industry. And that’s amazing.
People always think it's a cost play. But no, it's an up-sided play. Because new technologies—which are out there already—can now be deployed. And investors will find that.
What are some specific examples that you’ve come across?
I personally believe we should be putting pressure on the EU to re-channel their EUR 50 billion subsidies to the fossil industry across Europe into infrastructure investments across Europe. This would give people incentives to change their cars to e-mobility. This would give them tax incentives. This would be an incentive to invest into the charging infrastructure across countries.
I just bought an electric car. It's fantastic. What will petrol stations look like in ten years when 75 percent of the cars will be electric? They're just going to be shops with charging points. That whole area is moving very fast. There is talk about how bus and truck companies can convert to e-mobility.
Also, look at the building industry. I have a business in Germany that produces roof tiles that are solar panels. There is so much interesting development. That's where technology is, and it’s moving so fast. People will find it. It all has an impact.
In terms of the impact investing space, how do you see it evolving overall? Do you feel it will become more mainstream over the next decade?
The Global Steering Group for Impact Investing is defining impact investing as social and environmental. I think that it is probably too narrow. It must go wider because if you look at the investments that Volkswagen, Toyota, or BMW are making, what are they? Technology. There is environmental, social, and there is also technology. So, I believe the term—impact investing—is evolving.
Mark Carney, former governor of the Bank of England, says, very clearly, that companies need to have a transformation plan, in that we can't go back to the old way of profit maximization and shareholder value. We need to have a transformation plan, which includes the environment. And it must be strictly regulated. This will be one of the key issues that the banker has to check up on for that company. Within that transformation plan, there will start to be an impact investment opportunity because you need to show impact on the social side and environment side, but also on other sides, such as health-related, et cetera. So, that all starts to become a new normal.
What is feeding your optimism in your work today?
What keeps me optimistic is the environmental health at this moment. In such a short period of time, we've seen a remarkable change. It’s not only governments who can do it. It's not only corporations who can do it. Everybody has their own responsibility. We all have our own responsibility in terms of our attitude and behavior. We [ECF] do a lot of work with grassroots organizations and individuals, like Greta Thunberg, but we also work now with faith groups, which is one thing that I'm very much pushing within our organization. We had our October board meeting last year in Rome and had a very interesting, thoughtful discussion with people from the Vatican. We decided that we're going to work closely with them, and they want to work closely with us. So, we started supporting some of their projects relating to Laudato Si, the encyclical of Pope Francis.
People need to understand their own personal responsibility and behavior, but also you have to give people the opportunity to understand the issues. For instance, I'm working here in the UK with the Catholic Church. I want them to make a strong statement this year that they're going to be carbon neutral by 2030. First, we must define what their carbon footprint is. It's not big obviously, but still, we have to come from the baseline. And I said to them, "Why don't we try to plan most of the churches with solar panels? Create energy from heaven rather than use energy from hell?" Then, on a weekly basis, the Parish priest can tell his parishioners that this last week, 88-percent of their energy came from heaven, from up there [solar], and not from hell, gas.
It helps people to focus in a different way. They see that personal responsibility is important. This makes me optimistic that we can create a mind change. Obviously, there are people in the public housing across Europe, who live in these high rises. That seems to be horrible concerning the [spread of the] virus. And obviously, how can you give these people an optimistic view? And a lot of people are now unemployed, and they may already be at the bottom of the social ladder. That is going to be a challenge that we need to figure out: How can you move those people regarding their personal behavior to become more sustainable in their way of living?
What advice would you give to someone who is new to the impact investing space?
I know a lot of people, very talented people, who want to get into the business of impact investment, which is great. But sometimes I say that it is good to first get some real experience in the investment space. A lot of people then have personal wealth and inheritance, and then they want to become an impact investor. This is great and very positive. But I was in my mid-forties when I started in this space. I already had quite a business career, not in investment, but in retail. I would rather go into the world of business and learn there first. It’s like Jacqueline Novogratz, the founder and CEO of Acumen, who first wanted to become a charity worker. But her father always said to her no, so she first joined Chase Manhattan Bank first and did some real good work. Suddenly, she was working in the emerging markets and was checking on bad loans. She got a lot of business expertise—first. Sometimes, I think that people need to do that. They need to get experience, and then start working in the [impact investment] industry after they’ve gained some traction.
To learn more about Stephen Brenninkmeijer and the European Climate Foundation, visit: willows.uk.com and europeanclimate.org.