Sustain: where did the idea come from? Meet the original founder, Andre Shepley
Sustain is a Sustainable Investment Fund where members can invest between $1 and $1,000,000 and then vote on which stocks the fund invests in. Check out our website or previous blog post for more info!
Last Monday, on October 1st, Sustain launched its beta fund. Not the full product, not the first version of our app, but a 6 month test designed to fine-tune the Sustain concept. For the beta fund, we invited 100 participants to invest $100 for a period of 6 months. Every week during the beta test we send weekly newsletters to these participants with information on 10 selected stocks. Participants are then asked to vote on which stocks they think are doing good for the world and which are not.
The beta fund represents a small, simplified version of the Sustain fund; it is a low-cost test to determine if our assumptions are right or not.
But this beta launch got me thinking. Sustain is a new way of empowering everyone to have control over their investments — but where did this idea come from? Where is this idea going? And what about this idea was so attractive that the beta fund was oversubscribed in less than three weeks?
For answers I spoke to Sustain’s CEO and original founder, Andre Shepley.
Andre grew up in Springfield, Massachusetts as an only child with his mom, who introduced him to activism from a young age:
“When I was seven or eight years old my mom would paint signs for protesting. She would paint all these signs and take me out, often in the winter or in the most inopportune times at least for a seven year old. And we’d go protest, for example we’d go protest the war [in Iraq], we would protest different corporate actions or, you know, what companies are doing overseas.
My mom was always hyper-aware of what was going on and how certain corporate actions affect, you know individuals, especially those marginalized in society. I was always frustrated as a kid because I felt like… I felt like we weren’t having any impact. There would be like 15 of us outside cold and maybe 20 cars would honk their horns to encourage us but I didn’t see how that was doing anything. I was just frustrated with the [lack of] impact and so, I always kind of thought to myself that there’s got to be a way to harness people’s desire to create change in a more scalable way.”
Andre went to a local elementary school, but his world opened up when he was awarded a scholarship to the nearby boarding school, Deerfield Academy. There Andre’s perspective broadened:
“Springfield was also not the greatest area to grow up in, I remember in seventh grade someone threw an overhead projector out the window during class… So that was another reason why I chose to go to Deerfield [Academy]. I felt lucky to have the privilege to go and be accepted.
I’d say it was a pretty big culture shock. It was the first time I became aware of the magnitude of wealth that’s out there and the magnitude of privilege that’s out there… that was pretty interesting for me and I definitely grew a tolerance [for people from different backgrounds] that I feel I have now.”
From high school Andre went to study Economics at Pomona College, a small liberal arts school in Claremont, California. From here he was scooped up by investment bank UBS and became an equities (read: stocks) trader.
“I really loved it. It was really fun. It was very, very intense… understanding the drivers of stock movements fascinated me and I loved coming up with ideas.”
After a few years in trading, Andre moved into equity research, the only department that permitted him to take long term views on stocks.
But soon Andre was disillusioned with equity research too. Although he had the freedom to consider company actions over months instead of minutes, he wanted to look even longer term. He wanted to consider the impact these companies were having on society and the planet in years and decades.
Enter: Sustain.
“I left UBS and started Sustain so that I could give people a forum to have constructive discourse over what it really means [for a company] to be sustainable. I wanted to create a network of sharing, of voting and of journeying together, too.
Sustain is essentially a way to collectively optimize a portfolio of stocks. What I foresee in six months with Sustain is a real positive impact on how people feel about investing. I hope people will feel that when they invest they are really financing the economy that they want to see. They are building the world they want to live in.
The real issue with the status quo in finance is that there is a complete misalignment between the people who manage capital and individual people in the community. After all, it is the people in the community who are investing this capital through their pensions, savings and investments.
But the finance sector itself is trying to increase its own profitability and increase its size and that’s been happening since the 1920s. Back then, the finance industry was ~2% of national GDP. Now it’s roughly 7 to 9% and all that excess is often paying for financial products that people don’t need.
That 9% comes from the fees that the finance industry charges as they try to outperform each other. It’s a complete waste. Wouldn’t we all agree here it would be better to invest for a more sustainable future where the benefits go to everyone?
Our portfolio does not need to outperform our next door neighbors this week or this month if together our portfolios can perform while improving market outcomes over a 10, 20 or 30 year period!”
It took me some time to digest what Andre had said, but when I did I saw the truths he was hitting at. There is a rat race going on where 95% of the community are fighting each other and getting nowhere, while other the 5% (hedge funds, banks and asset managers) take all the growth and profits for themselves. Even though the 95% care deeply about these pivotal issues, they are unaware that collectively they hold the power to make real change.
Sustain is a way we can fix this. A way for the community to come together to discuss how they want the world to look. A way for the community to have control over their investments. This control comes in the form of voting on issues that relate to different actions that public companies take. We call these issues ‘Pivotal Issues’ and it is through members votes that Sustain empowers the community to control how they invest.
I asked Andre if he had any parting words that he thought were important:
“I want people to know that Sustain is not about trying to be an investment fund for the sake of it. It is about looking at the world differently. Sustain is about valuing people. It’s about valuing the environment. It’s about valuing transparency and it’s about creating a way to hold companies accountable because you know, just like people, they all do good and bad things.
Sustain is about creating a community that is focused on the good. There’s a lot of negativity out there and there’s a lot of blaming and polarization. What we need, what the world needs, is to work together to build a future that we are proud of.”
Words to live by. I am proud of the work Sustain is doing and to be part of the journey.
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