HIP = Human Impact + Profit
Our world of more than seven billion people faces many human problems that need solutions, many of which can be served by companies. By solving these human needs profitably through products and services (from Walmart’s $4 generic drug program to ICICI Bank’s micro-loans to Vestas’s wind turbines), a company can benefit customers, inspire employees, engage suppliers, and deliver sustainable profitable growth for its investors.
Building a HIP Portfolio that solves problems in Health, Wealth, Earth, Equality and Trust is a driver for attractive long-term financial performance. Today, one out of eight investment dollars seeks “human impact” as well as profit. And Goldman Sachs has shown out-performance by HIP-like publicly-listed companies.
Founded in 2006, HIP Investor Inc. has built a unique methodology to track, rate and rank investments’ quantifiable impact on society – transforming traditional Wall Street views that “doing good” and “doing well” are incompatible. HIP’s research has shown that in many cases, these outcomes are symbiotic: “doing good” can lead to the creation of new markets, innovative products, boosted revenue, lower costs and ultimately, greater profitability.
The basis for HIP was spurred by self-made entrepreneurs contributing charitably to the non-profit Ashoka. Why, they asked, could they not get a great social return on both their donations and for-profit portfolios?
As Ashoka’s Chief Development Officer at the time, Paul Herman, HIP Founder and CEO, sought to answer their question by seeking out attractive investments that target human, social, and environmental benefits as well as profit. However, when presenting these opportunities to financial fiduciaries (family offices, wealth managers, CFOs), they asked for the “proof” that it worked. They wanted to see the data and HIP Investor was born.
Herman applied his cross-sector experience — as an entrepreneur building the first online-debit card for teens and parents; at McKinsey advising Boards and managers; at Omidyar Network advising on social investing; his government project expertise at the Hanford Nuclear Reservation; and his experience with systems-changing social entrepreneurs — to build the HIP methodology as a society-wide framework for all sectors (business, social, government) that focuses on outcomes and results. Since then, the HIP methodology has taken shape with the benefit of ongoing collaboration with investors, business entrepreneurs, social entrepreneurs, advisors and executives.
Today, HIP ratings span over 6,395 equities and corporate bonds, and over 58,892 municipal bonds. These in turn are used to construct ratings of Mutual Funds, ETFs, Pension Plans, Private Client Portfolios, 401(k) and 403(b) plans, and multiple other forms of investments including HIP Portfolios and Investment strategies which are available through HIP’s management and advisory services.
At HIP Investor we have identified four values that we believe are essential to the long-term success of the organizations and crucial for the future welfare of society. These are the core values we seek in prospective clients, team members, and business partners.
Everyday more and more data is available at our fingertips. Technology has made it fairly efficient to collect and analyze enormous samples. However, regardless of how much data can be accessed, it still requires a person to transform data into useful information. The value added lies in the models and meanings that rigorous analysis can yield.
This argument informs our priorities and approach. Whether we are developing HIP Rating methodology or providing analysis support and services for our partners, at HIP Investor decision-making processes are driven by rigorous analysis and sound interpretation.
At HIP Investor everyone is a change maker. Be it by innovating at multiple levels within the organization, conceiving and engineering new patterns, or encouraging others to engage and care, every member of the HIP Investor family is entitled to shape the collective vision of what we do and how we do it.
The world has been led and managed by just a few people for the past 10,000 years. But as the rate and sources of change increase exponentially, the pattern is changing. The model of a few people holding the reign for everyone else cannot survive. Efficiently fulfilling society’s ever growing needs requires that we source innovation from the many not the few.
Transparency and Accountability
These prerequisite values of good governance and sustainable development support sound performance and play a crucial role in preventing systemic corruption. As such, they stand as two basic pillars for the proper functioning of financial markets.
Providing access to clear, accurate, and up to date information that enable change makers to judge whether standards have been properly established and met are at the core of our objectives at HIP Investor.
Develop a Good People Network
We are a growing network of members and partners who are change makers, experts, rising stars, innovators, and caretakers. Join us!