15 Dec Paul Richardson
Paul Richardson: The Growth of Impact Investing
In this monthly series, the team behind Genus Fossil Free speaks with Canadians at the heart of where finance meets climate action. Know someone we might want to speak with? Suggest them in the comments below or email email@example.com
Paul Richardson is the CEO & Co-Founder of Renewal Funds, a mission venture capital firm investing in early growth stage companies in Canada and the U.S.
His resume is impressive: Paul is the Board Director for Renewal Funds, sits on the Board of Alter Eco, Mama Earth and is an Observer on the Miovision board. Paul’s impact was recognized in 2014, when he was named one of Canada’s Clean50.
We caught up with Paul to learn what excites him about his work, the evolution of impact investing, and how his ‘superpower’ is making a meaningful difference.
Paul Richardson, CEO & Co-Founder of Renewal Funds
You founded Renewal Funds eight years ago. What do you do, and why do you do it?
I help manage money entrusted to Renewal Funds by mission-based investors, looking to support early growth companies that are making a positive difference. I also try to help impact entrepreneurs grow their companies in a way that’s sensible and sustainable.
Why do I do it? Ever since I was a child, I’ve cared about nature, and this passion led me to study biology as an undergrad student at university. While the majority of my career was spent in law, I’m proud to now be supporting companies that protect our planet and species other than just our own.
You’ve worked in the impact investing space for 15 years. What has changed during this time period?
There has been a radical increase in the awareness of this sector. Fifteen years ago, people didn’t know or talk about ’impact investing.’ Now people know about it and genuinely want to be part of it.
Previously there were very few impact investment deals. Now there are plenty! It’s fantastic to see, and it’s personally fulfilling to be part of this change.
What’s unique about your sector?
The impact investing sector attracts people who have been wildly successful in other careers, but who are willing to start all over again to develop an organization with an environmental or social impact.
These entrepreneurs are driven by passion or purpose, rather than purely profit. This is unique, and makes impact investing an exciting sector to be part of.
How has Renewal Funds changed since its inception?
Renewal Funds has grown along with the broader impact investing sector. We’ve seen more entrepreneurs launching impact initiatives, and more investors looking to use their money to make a difference.
We’ve become B Corp certified to show our commitment to social and environmental
performance and transparency, and named B Corp Best for the World three times. We’ve joined 1% for the Planet, committing to give 1% of sales to approved nonprofits, too.
What transactions have you done this year that you are proud of?
In every transaction we participate in, we emphasize fairness and sustainability – and we aim for an optimal outcome for all stakeholders: workers, partners, founders, and the environment.
2017 was a big year. We made four successful exits from portfolio companies; Better Bean was acquired by Hain; Aquatic Informatics was acquired by a specialized water tech fund; and Sweet Earth was acquired by a major, international food company; and most recently, Alter Eco, a fellow B Corp “Best for the World Company”, was acquired by an evergreen fund that will maintain the team, and honor and grow their mission long term.
All exits delivered a good outcome for our investors and are important for moving forward these mission-focused companies.
What is coming in the near future in your industry that excites you?
The number of people that have $250,000+ to invest is somewhat limited, and many of the impact investments currently available require a five to ten year commitment.
Impact investments need to become accessible to the broader public, and not just the top 1-5 per cent of earners. I expect to see the creation of more accessible investment vehicles in the near future. Enabling everyone to invest consistent with their values, regardless of the size of their investment, or the length of time they can afford to invest for, will be game-changing.
What other changes would you like to see in your industry to enhance impact?
There are three major changes I’d like to see. At a public policy level, I’d like to see the government give tax breaks to companies creating solutions for our carbon-constrained future. We need to reward companies that are doing good.
At an industry level, we need advisors to be better educated on the impact investment sector, so they can advise clients on how their investment choices can better support the future of our planet.
At a public level, we need to continue to improve awareness. We need investors to understand their options for divesting, and recognize that impact investing can be financially rewarding as well as emotionally fulfilling.
What is your climate action superpower?
My superpower is being able to develop solutions that are fair for everyone when there are differing views and motives involved.
This skill was honed during my legal career. I often worked with people with competing agendas, and it was my job to find a way forward. This skill has proved to be invaluable during my time in the impact investment sector too.