Measure Your Footprint

As sustainable investing becomes more widespread, some plan advisers are seeking to move beyond just offering the investment options to their clients, to also considering ways to green their own practice.

An adviser may become greener by adopting technology such as document digitalization and electronic document vaults, or meeting clients virtually via video conferencing. All of these measures reduce carbon emissions and paper use, while saving time and money for the office. 

Yet, there are ways advisers can further reduce their carbon footprint; some have gone so far as to create a carbon-neutral workplace—offsetting, through carbon credits, the pollution their practice emits in carrying out its business.

For many advisers who embrace sustainability, reducing their carbon footprint is just one part of a bigger picture, one of creating a workplace that is transparent and could eventually attract talent. For others, it aligns with their investment recommendations.

For Stephanie Cohn Rupp, CEO and partner at Veris Wealth Partners, an impact wealth management firm headquartered in San Francisco, creating sustainable practices is a moral imperative. “We, the financial world, should really be at the cutting edge of pushing for lower GHG [greenhouse gas] emissions, as it’s an existential threat to the entire nation and the world,” she says.

There is the business and sales argument, too, Rupp says. Clients who seek sustainable investments want to know their adviser understands the real risks of climate change. “One way to show that authenticity, and that concern, is in how you operate,” she says.

Nick Cantrell, founder, wealth adviser, at Green Future Wealth Management in Worcester, Massachusetts, concurs, saying more potential clients who seek sustainable investing are asking him upfront about his firm’s approach to sustainability beyond investments, to see if, in practice, the firm walks the talk. “They’d worked with other advisers, or had meetings with other advisers, and felt that sustainability was not authentic to those advisers’ practices,” he says.

Getting Started

Firms that want to lessen their carbon footprint must know the source of their emissions. For most, it will be from energy used at the office and transportation, says Sam Adams, CEO and co-founder of Vert Asset Management in Sausalito, California. The Environmental Protection Agency calls these Scope 2 emissions—those created in producing the energy that the firm buys from a utility—and Scope 3 emissions, which result from commuting and business travel.

A carbon audit will uncover the sources of a firm’s emissions, and a number of online carbon audit tools are available (see sidebar). 

Cindy Bohlen, research analyst at Riverwater Partners, a socially responsible investment advisory firm in Milwaukee, says Riverwater conducted its first carbon audit in 2021. The firm has been tracking its emissions closely this year, and in January 2023 it will set targets to cut its carbon emissions, using this year’s levels as a baseline. 

She says Riverwater’s carbon footprint for last year was the equivalent of 25 million metric tons of carbon, but, she notes, that figure also reflects the influence of COVID-19 when there was less business travel and more working from home. Of that total, 13 metric tons was for office energy use, not including computers, which added 2 tons.

“We’re a growing company, so maybe we won’t be able to absolutely reduce it, but our hope would be to reduce it as a percentage of our revenue, or use some other type of metric,” Bohlen says.

Her firm used Terrapass for its audit; that company also lets businesses buy carbon offsets, which help fund projects that achieve carbon neutrality. Riverwater spent $400 in carbon credits to achieve zero net carbon emissions. 

Buildings Emit Lots of Carbon

When RBC Wealth Management established corporate headquarters for its wealth management division in a new, 310,000-square-foot space in Minneapolis this year, sustainability was on its mind. Jon Fahning, director of U.S. corporate real estate at RBC, says the company is pursuing Gold LEED [Leadership in Energy and Environmental Design] certification for the building. To earn certification, a building must meet certain standards that address use of factors such as carbon, energy and water, and indoor environmental quality.

The greener RBC Gateway building is already showing results in cutting reliance on natural resources. Between this spring, when RBC moved in, and mid-June, the company’s data show its energy consumption fell by 10%, and potable water consumption decreased by 42%, among other savings, compared with traditional construction.

According to a 2020 report from the Global Alliance for Buildings and Construction, part of the United Nations Environment Programme, buildings contribute 38% of global carbon emissions. For advisers, however, their building’s emissions are one of the most difficult targets, as their firm often rents its space, Vert’s Adams says.

“It’s a classic problem in real estate: the owner-tenant dynamic, where the owner owns the building and is not necessarily incentivized to make it greener, because all those benefits flow to the tenants,” he says.

Proactive advisers may have some success with landlords. Gerald Goldberg, CEO and co-founder of GYL Financial Synergies, a wealth advisory and institutional consulting practice, in West Hartford, Connecticut, worked with his firm’s building owner on a new office space as part of a long-term lease. Among some of the upgrades were lights that will automatically turn off after a certain amount of time and energy-efficient smart thermostats. 

Adams convinced his landlord to tint the offices’ windows, offsetting the heating effects of the afternoon sun, instead of installing more air conditioning, which would have increased Vert’s carbon footprint. The landlord agreed, as the window tinting would reduce strain on the building’s heating, ventilating and air conditioning systems, ultimately saving money. 

Another option is to not rent office space at all and operate remotely. Rupp says Veris decided against opening a fourth office in Denver, and now it conducts many staff and client meetings by video conference, still having in-person meetings occasionally. Renting a co-working space is another option for in-person meetings when those are necessary.

Beyond Carbon Footprint

The advisers interviewed for this story say having a sustainable practice does more than cut carbon; it promotes other positives such as work-life balance; diversity in staffing; generous employee benefits; a strong, inclusive work culture; and favorable relationships with clients and the community. In fact, many of these advisers volunteer their time or make other donations.

 As mentioned previously, having a holistically sustainable practice attracts like-minded clients; it also is desirable to younger talent, according to some of the adviser sources.

“Sustainability helps us from a customer marketing standpoint, and we think it helps us even more from a hiring and retention standpoint,” Bohlen says. 

“There’s a lot of research showing that people want to come and work for companies that embrace these values,” she continues. “A strong culture leads to lower turnover and better ideas.”