Interviewed February 2009
Napoleon Wallace (MBA '10) was recently observed walking down the hill from his apartment to Kenan-Flagler Business School, checking the bond markets on his open laptop (it was a highly volatile day), while carrying on a conversation on his cell phone about numerous business enterprises. Multi-tasking is second nature to this first-year UNC Kenan-Flagler student who wishes he could squeeze just one more hour into the 24 that make up a day.
Napoleon says: "I can remember the day I decided to pursue sustainability as clearly as today's breakfast. I was sitting on my bond desk with a trader eating lunch, and we were talking about a recent alternative energy deal. I was trying to convince him that environmental, social and governance (ESG) investing would change the way we view investments, and he was egging me on with his skepticism. When he finished eating, he ended the conversation by simply asking me, 'how?' To which I responded, 'I don't know… maybe by re-pricing risk? I mean ESG is really just measuring the sustainability of a company's factors of production: land, labor and capital. At which point the tenured, street-hardened trader blankly looked at me and said, 'You may be on to something, Nap.' "
This conversation happened in the summer of 2007, on Wachovia's trading floor, and Napoleon has been chasing the dream of marrying sustainability and finance ever since. "It really makes sense. You can look across the business world right now and see the value of balancing long-term sustainability and business. Imagine if the proper governance pillars had been baked into the financial system from the start… Would we be in the current meltdown?"
Although Napoleon analyzes industries as a sell-side street analyst, he admits that the sustainability piece is continuously evolving. "The sustainability space is kind of hard to get a hold of… The knowledge pool is always changing, which is actually what makes it so interesting. I focused on coming to Kenan-Flagler because I knew that I would need to be at a cutting-edge university to get substantive exposure to the space. This summer I worked as a research associate on the CSE Consulting team, which gave me real industry exposure, and during Mods I-II, I worked with Human Impact + Profit (HIP) Investor of San Francisco and the Global Alliance for Improved Nutrition (GAIN) of Geneva — all great industry experiences. My two main goals while here at Kenan-Flagler are: (1) to gain as much exposure to this evolving space as possible and; (2) to present the Kenan-Flagler brand to major players in the sustainability realm. I am hopeful that these experiences as well as my Kenan-Flagler MBA will help position me to have an impact in this emerging space".
For his summer 2009 internship, Napoleon is still weighing a few options, including a sustainable investment research platform, a sustainable VC firm and the Carolina Entrepreneurial Fellows program. After graduation, he hopes to leave his mark in the investment framework space. "Despite my current focus on sustainability and entrepreneurship, I'm an investor at heart, so the greatest contribution that I can make will be to help develop the framework that properly marries environmental, social and governance performance with financial performance." He adds, "If the recent credit crisis has shown us anything, it is that there is definitely a relationship between governance and financial performance. To extend this line of thinking, my contention is that businesses resources are not infinitely abundant, and previously externalized environmental and social impacts affect a business' long-term access to land and labor (the other factors of production)."
Besides these projects, Napoleon is active with the UNC Kenan-Flagler Net Impact Club, as a member of the team organizing the 2009 Sustainable Venture Capital Investment Competition, and was part of a group of students that blogged about the Net Impact Conference in Philadelphia, PA this fall for Triple Pundit. He is also a contributing blogger on SustainableCapitalism.org.
The rest of us are left wondering when he sleeps.
Sustainability Reading Recommendations:
The CFA Institute's Environmental, Social and Governance (ESG) Manual. This isn't a book, but 70 pages of data, considerations and rationales that outline the incorporation of ESG into investment valuation. Napoleon says that, "While it's a long way from a page-turner, it touches on a number of the day's top sustainability themes. And possibly more important than the content, is its implication of its mere existence: EVERY Chartered Financial Analyst (CFA) in the world now has some level of exposure to social and environmental impacts, and a framework for understanding how those impacts can affect a business's bottom line."
Nominee for Sustainability Superstar:
I really like what Anthony Ling of Goldman Sachs and the GS SUSTAIN framework are doing on the sustainability front. Given that the world is changing more rapidly than ever before, GS SUSTAIN provides a proprietary framework for understanding and getting ahead of that change by identifying the best managed companies around the globe that will succeed on a sustainable basis. Given that the framework is proprietary, its specific application is still evolving. However, the implication of the world's most reputable investment bank, Goldman Sachs, incorporating environmental and social considerations into investment valuation is tremendous.