Episode 69: Maureen Maguire - Can You Build Wealth Through ESG Investing?

0:07 Hello Beautiful Humans. Welcome to the podcast where I have juicy conversations with beautiful humans for your weekly dose of inspiration. I'm Jennifer Norman, founder of the Human Beauty Movement and your host. This podcast counts on your support, so I encourage you to hit that follow button, rate us and review us and share this episode with your favorite people. So it wasn't until later in life, after I had over about $1,000,000 to invest, that I decided to hire a financial planner. And let me tell you, they aren't all alike. While helping you meet your wealth management targets is of course the ultimate goal, the way to get there varies greatly. If you're a person that believes in achieving the highest yields in a Machiavellian style, certainly that is one way to invest.

0:54 If, on the other hand, you believe in the importance of investing and companies working to build a regenerative future, that will certainly render a different strategy. No doubt there's been a lot of controversy lately about investment strategies that heavy up on ESG sustainable businesses. Is it fiscally prudent to put your money in environmental, social and government investments? Here to talk about that and more is Maureen McGuire, cofounder of Tara Blue Wealth Management, an advisory firm that offers ESG only investments. Welcome, Maureen. Thank you very happy to be here. Nice to have an opportunity to talk about what I feel so strongly about. Absolutely.

1:36 And I'm really excited to have this conversation because it's an important one. So first and foremost, why don't you tell us why you founded Terribly Wealth Management? I have been doing financial advising and financial planning for 30 some years and I was kind of at the point where I was either going to retire or I was going to fulfill my vision, which was to have an. Exclusively ESG focused financial management firm, but I needed to find the right business partner because I didn't really have the energy to start over by myself. So it took several years and then I met Vanessa Gillett who's my business partner.

2:18 We were both doing pro bono financial planning for Santa Rosa fire victims back in 2019. As we got to know each other over the course of a year or so, we realized that we were very like minded and. In terms of our passion for ESG and our interest in financial planning and what that does for our clients, so went from McGuire Wealth Management to a firm that we Co founded in 2020 just before COVID terribly Wealth management and our focus is exclusively on ESG investments and we're very heavy on the financial planning side. So it's worked out really well far beyond my expectations. It just happened that the Airbnb Ipo's were happening.

3:00 As is a millennial, she resonates very well with the millennial population. And so she became very talked about in the bulletin boards, shall we say with the tech sector and executives in the tech sector. So terribly took off in spite of COVID, it actually worked to our advantage. I hate to say that, but to not have to meet in person with the volume of new business coming in made it possible to keep up, shall we say, with just starting out. My background has been financial planning. First, investment management as outcome of the financial planning. I can't possibly design A portfolio without knowing everything about my clients before I make a recommendation.

3:41 And a lot of my clients are social justice oriented in my age group. So civil rights activists, you know? Going back to the 60s, that type of thing. But there's also in my age group and older people who either their parents or in some cases even themselves, are influenced by the Great Depression. So for them, thinking about financial security is more about accumulation, more is better, and that's understandable given the scarcity that they experienced or their parents experienced. I myself didn't really understand what financial security was. Until I entered this profession. As I started to learn about it, I came from a blue collar family and I was really interested in how people achieve financial security.

4:30 And it didn't take long for me to realize that it had very little, if anything, to do with how much money a person have. Yeah, because I work with clients who live on what I consider very meager means, and they're financially secure because they don't have a flashy lifestyle. They're content within means. I have another client. For 20 some years, who's a lovely lady and she has $20,000 of income a month that she does not have to work for, does not have a mortgage and she has to be on a budget. So financial security for her is almost not achievable because the money is trying to fill a void that you know they can't fill. So I'm really interested in sufficiency and experience of sufficiency.

5:13 And that's really when I work with a client. I really want that person to understand that. Financially secure by understanding their investments and understanding the role of the investments in their life and their life choices. So that all fits very well. The millennial group that Vanessa tends to work with is so beautiful because they don't have that Depression era mindset and many of them have come into tremendous wealth early in life and they don't feel like they have to show it off or accumulate more. They're actually, there's a huge movement within that generation of. To one, make sure their work has purpose, but also their money and their capital and what it's doing has a greater purpose.

5:57 So it's not about accumulating for the sake of accumulating, it's for having an impact and being very deliberate about that impact. So it's really a privilege to speak with this generation about money from that perspective. In that context, it's just it's really wonderful, amazing. So now what got you so interested and passionate about ESG in the first place that you would want to found a company that does nothing but ESG Investments? Well, I come from the nonprofit sector before I became a financial planner, and I worked for an organization that was going to end world hunger by the year 2000. That didn't happen, but we did bring relief organizations together to start thinking proactively instead of just crisis management around world hunger.

6:43 And again, it goes back to that sufficiency that there is enough to go around and we just need to. Think in terms of taking care of everyone. And so my background has been more in terms of, again, what's it going to take for people to feel safe and secure in this world? Because I think that would do a lot more than weaponry for peace. And that's the big picture. But I also came to realize that where there's money, there's power, there's influence. So the more I understood capitalism and how it worked, and the political structure and how it worked, the more I understood that. The degree to which we can move capital in the right direction and have a voice with our investments, and not only probably more significantly how we spend our money, but certainly how we invest our money now. 20 years ago, it was started from the religious organizations wanting to do no harm.

7:38 So no alcohol, no tobacco. It has grown significantly since then and I can assure you, back 20 years ago at the Conferences for Socially Responsible Investing, there was plenty of. Alcohol going around. So that wasn't really the screen you're concerned about. But certainly the environment and social issues have risen. And at that time, 20 years ago, we did not have research to say, you know, this is not going to hurt performance because I had a smaller realm of investments to choose from. It was more exclusionary. You try to avoid the bad guys. It was a much more challenging endeavor. And I really had to say to a client in those days, I don't know that I can.

8:19 Match the indexes with your portfolio or you will do you want to have your values represented in your portfolio and it may be at the expense of performance and some people would say yes. Again we're talking to Greshan era investors, so not so much but sometimes they would say I care more about having my values represent I'm one of my clients. I just love her dearly. She had very meager means and and I actually said to her, you know, I think that we need to do something very careful here for. You in terms of guarantees and I I don't have a socially responsible way of doing this. And she said, why should I be secure when people are hungry in the world? So I learned from my clients that was, you know, she literally did not see her needs as being more important than the person in Africa trying to carry water to the family. And she has held to that value in all the years I've worked with her.

9:14 Yeah, I think that's a lot of people will say, OK, I care very much about nonprofits, good about charity. And so they will give money or they'll donate as part of maybe it's a tax exclusion or something like that. But they don't necessarily think that it is a longterm strategy for them to retire on. They might have a bit of skepticism about whether or not that is actually fiduciarily responsible or a way to get the kind of growth and the goals that they want in order to retire comfortably. What would you say to people like that? OK. So Fast forward to today, from that era and you'll. Will find that not only does it make sense from a fiduciary standpoint, but in fact it's possibly neglect on your part to not take climate change for example into account. So we've seen evidence of it in terms of during COVID. The companies that treated their employees well are the companies that's you know for the most part did well. The companies who made their employees work when they were sick got into big trouble.

10:16 Reputational risk. Wells Fargo is an example Volkswagen. Intending to do the right thing. So to the degree that we are holding companies accountable and more and more we are to do the right thing by their community, by their employees is a degree to which you have less risk exposure really to climate change, to reputational risk, It just makes sense. A company that is taking care of the larger community and not just the CEO tends to be a more well run company. So that. Said will it outperform at all times? Not necessarily, if you're not doing traditional energy stocks.

10:56 The recent history is a good example. Yeah, Prior to 2022, not having exposure to all of the oil stocks that are in the index worked well in our favorite those stocks were really depressed. Then the COVID hits. Oil and gas companies have an opportunity to raise prices and increase their profits hugely. Essentially, significantly. And now it's somewhat of a disadvantage to be less exposed to the energy sector. So there's always going to be shortterm periods of time where the ESG focus may be somewhat to an advantage or to a disadvantage of the whole concept to ESG, which we, you know, spoke to 20 years earlier but we couldn't prove.

11:42 Now we have evidence for a lot of research showing that having a perspective that is based on the. Longterm outcome rather than shareholder returns quarter by quarter. If you just think about running a household based on what happened this quarter, next square, you know, do we have enough money in? Oh, we can go to Disneyland. We have money now. That's just not how you run a company. You need to be thinking in terms of both. We have turnover that is expensive. It takes a lot of resources to bring in new employees, so we better take care of the employees we have. That may not show up and from 1/4 to the next, but long term it does show up. Likewise, if you're taking into account the toxic waste the impact is having on your community and what can we do to make sure?

12:32 Or it isn't harming the drinking water for our town. That may not show up quarter to quarter, but eventually it catches up with you and you end up having to pay for your cents if you're not paying attention. Yeah, I was going to say like recently with the, you know, financial upset that we've had and a lot of people unfortunately are pointing to Silicon Valley Bank as being an example of, well, you know, they put all their eggs in their basket and DEI and ESG and look what happened. It was risky. So a lot of people are using that almost to scapegoat the fact that, you know, maybe ESG isn't where you want to put your money. What would you say to that? You know, I think it's a compliment that there is so much pushback to ESG and it's because we're having an impact, we're making a difference. We're putting pressure on CEO's.

13:18 They do not like having their compensation looked at. They do not like having to be held accountable for the impact they're having on the environment or how they're treating their employees. So it's like so much else people understand. And that just accumulating profit for the sake of accumulating profit isn't going to cut it in the long run. And people want to have money deployed in a way that is more fair to everyone and not just to the 1%. Now the media is fed, mainstream media is fed by that 1%. So we don't get that perspective. What we get is distractions and stories. I mean to say that Silicon Valley Bank went under because they were so focused on DEI that they. Shows a total misinterpretation and lack of understanding of how banks work and what went into.

14:09 It's much more technical and and just an understanding of taking, having longterm money invested and then people wanting their money all at once with bonds. I mean it has nothing to do with DEI, but you know it's an interesting distraction. It's an easier way to talk about it, even the way we measure our economy. If you think about it, GDP, gross domestic product, that's based on consumer. Terrorism, that's all it's based on. So, and we're only doing well if we keep spending more money and we keep consuming more money. Ultimately, is that really a measure of how our economy is doing when so many people are going hungry? When we have the highest infant mortality rate of any developed country, how can it possibly be a measure of the wealth of our country and the health of our economy? So well after the Depression we had something called democratic capitalism, where the role of the government was. To provide a safety net as well as a healthy economy and opportunity for the entrepreneurs and the risk takers.

15:08 And it worked really well. But in the 1980s it became more of a focus of less government, more profits, and less control of the media than could you imagine today, trying to make a case for tobacco and smoking being dangerous to your health. You could not do it because there's no regulation around truth versus lies with the FTC. It's much easier to create distraction, but really we look around and we see the homelessness on the street, so we know that so many people can be doing so well, making so much money when so many people are suffering. This is not a healthy economy. Let's switch gears and talk about the kind of clients that are attracted to you talked about, you know depression era, you talked about millennials, but you offer a number of different services, not just like longterm financial wealth management. Who would you say is your ideal client? Our ideal client and we're tend to be drawn to us, our clients who are concerned about the longterm impact of their spending, their activities, their investments as well. And so we're not imposing something, it's just a belief system.

16:20 It's an understanding that we're part of a bigger picture and we want to make a contribution or we certainly don't want to being harmful to the environment or to people in third world countries who are. Suppliers to the companies that we work with. We want to have a voice in how our money is deployed. We also like working with people and people are drawn to us who want to understand their finances, not just be told what to do. But they're lifelong learners like we are and aware of their choices and how the decisions that people make today have tremendous impact on where, what the opportunities will be for them when they're 20 years from now, 30 years from now. So ongoing conversations that. Are deep and meaningful and take into account both the very personal needs of a person, but also how that fits in with the larger picture.

17:11 OK. And then in terms of the companies and the types of portfolios that you bring on, how are they vetted? Do you have another company or set of companies that actually go in and look and evaluate these companies based upon a specific set of criteria? Are there different ones for different packages of portfolios? Can you tell us a little bit about that? Great question. Yes, we do not do stock picking. We have someone on our team that does do stock picking and does that through the ESG lens, but that's because he's a specialist in option trading and for a few people that's an appropriate fit. Otherwise we work with EFT managers and mutual fund managers and they're, as most people know, there's a lot of what's called greenwashing going on where people say that they're ESG, but it's a marketing technique and does not mean they're necessarily. Doing anything with regard to ESG are very little. I could give examples, but what we do is we have a very strict criteria.

18:10 We do don't work with any fund manager that isn't doing shareholder activism because that's really where the impact is, is where you take the many dollars that all the investors together gives you a seat at the table where you can say, hey, we want you to measure how you're doing in terms of your carbon footprint and gender equality and. As they say, what gets measured gets managed. So they may not measure up in every you know in every regard, but we can hold them accountable and try to move the needle a little bit. Then we also use a lot of research around the impact and we can actually measure exactly how much of our dollars are exposed to private prison industry of an example we discovered we had a lot more exposure to that than we wanted and when we looked into it also with palm oil and then we. That well for example with the prison industry is very hard to not have exposure if you take into account that they're feeding the prisoners and if we invest in a company that provides the food for the prisoners or the phone contact are we you know indirectly we're participating in the private prison industry but and then we came away and decided that's acceptable we want prisoners to have good food. So.

19:27 But so nothing is in the research is still somewhat nascent, and there's some. Agreement research in both in terms of impact that you're having and how you're measuring that as well as what's called exclusionary. You know, companies that are not doing harm an imprecise science, but it's something that we keep working on and keep improving and there's more and more research becoming available in Europe is way ahead of us. They have much higher standards for accountability than we have in this country. So can you identify some of your favorite companies that might be like outstanding within? Portfolios that you say, Oh, I see them across a number of different. Are you asking about individual? Yeah.

20:08 These are the fund managers, wealth companies I think to start. Well. What's most intriguing to me right now, and I can't tell you exactly what the companies are, but I know that with infrastructure, Bill, that it has opened up tremendous opportunities around environmental impact, innovation. And as you can imagine, there's a lot going on in that regard. But now there's funding for it and it's huge. And so there are companies that have been starting out, they're not just starting, they've been doing this work for a while, but now they have funding to take it to the next level. So I really want to. Learn more about what those which companies they are. But we work with Lord Abbott and their bond fund exclusively.

20:51 It is not just avoiding the oil companies, but looking to the companies that are doing, reversing carbon footprint and catching up with what they're doing in Europe really. And Europe is also then seeing us take the lead with the infrastructure bill. They're also upping their ante. And so there's the opportunities abroad as well. So that's the sector that I'm most excited about at this point. Me apparently and B does a fabulous job of treating their employees well. I know they get bad press with the party scene and all of that, but they really do. I mean during COVID they made housing available to people. They offer all benefits to their employees that above and beyond what you see in most companies.

21:34 So they bring an example. An example? What has surprised you most since you've opened your doors? Since we switched to. Terrible versus McGuire Wealth Management. I think the demand for what we do, the fact that I mean it is become very, very popular as they say to the point where there's greenwashing that wasn't quite as robust in 2019 when we started. So I'm surprised. And also as I say the, I want to say magnanimity word, I don't use very often, but I'm the millennial generation, their understanding, their leadership, their clarity is so inspiring. I have to agree absolutely. Now you decided to certify Tara Blue as a B Corp, Can you tell us a little bit about that decision?

22:19 Sure, I learned about V Corpse, I don't know, maybe 15 years ago. And as when I had my own company, I didn't really have the resources to go through that certification, but it was high on the list. So when Vanessa and I joined forces, within a year we started that application process. And I really like to be in the company of other business owners who share this. Vision, this sense of obligation to the larger community and as rigorous as the process was to become certified. I believe you're V certified as well, right? So you're very familiar with it. It was very time consuming, very demanding, but I was very revealing as well because we, as every V Corp does, I think strives to get the highest score possible. Started out thinking we deserved a higher score that we actually got.

23:09 We're still in a very respectable. Highest 17% of financial services V corps score wise, but we know what we can do to improve. So the continuous quality improvement we can strive to do better and we're already doing that and just working with other big corps has been really, really fantastic. Yeah, when we're talking about values minded business and for financial planning and for wealth management it is, it's actually pretty extraordinary. I don't think that there's very many of you that really are, you know, in that place where the transparency, the value proposition, the way that you're operating is really, you know, very much involved in social as well as environmental impact. And so, yeah, congratulations on that front. I think part of that is the transition of thinking about capitalism as being something other than for the very, very wealthy and for the benefit of the very, very wealthy for capitalism to work.

24:08 But I think we really have to go back to what it was we. Where the movement towards deregulation occurred and where, I suppose it was born of the Depression, where there was an understanding that social capitalism is what works, where there is a an obligation beyond the shareholders, it's Milton Friedman made a whole argument in favor of those corporations exist only for the benefit of the shareholders. I think we're bumping up against the limits of that model. Really has to serve the larger community for sure. Well, Maureen McGuire, cofounder of Terra Blue Wealth Management, making the argument for going all in on ESG for your wealth in the future. And it does make good sense to put your money where the sustainable business is.

24:54 And if people and the planet are prospering, then so can you. Thank you so much, Maureen, for joining me today. Thank you so much for the opportunity. Thank you for listening to the Human Beauty Movement podcast. Be sure to follow, rate and review us wherever you stream podcasts. The Human Beauty Movement is a community based platform that cultivates the beauty of humankind. Check out our workshops, find us on social media, and share our inspiration with all the beautiful humans in your life. Learn more at the Human beautymovement.com Thank you so much for being a beautiful human.