IMPACT Enables Investments In Social Values: Interview with Will Peterffy, ESG Director at Interactive Brokers.
The IMPACT platform makes it easy to locate and invest in firms that share your social values, which is ideal for those who want to build a socially conscious investment portfolio. The platform, which is brought to you by Interactive Brokers, assists you in making a sustainable investment that benefits you, your community, and the environment. In this interview with TechBullion, Will Peterffy, ESG Director at Interactive Brokers, will provide us with more information about his company.
Please tell us about yourself and your experience at Interactive Brokers?
To be honest, that is a really meta question, and I will try my best to address it to the best of my ability. Because of my father’s personality, I grew up with a strong understanding of capitalism, knowing about markets, supply and demand, and having the laws of our economic system ingrained in me. However, I have always been drawn to the outdoors and the natural world on a personal level. Growing up at the period in which I did, I observed the destruction of the natural environment at a rate that has never been seen before in human history. Consequently, I spent significant amounts of time in intentional farming communities, studying permaculture, community development, and environmental studies as well as other related topics. Being a part of these communities allowed me to live a really healthy and happy existence, but I got dissatisfied with it since the world was continuing in a destructive manner, and I realised that our economics and capital system was the primary source of this destruction. As a result, I decided to pursue a career in finance in order to obtain a better grasp of how things operated. After three years of working for hedge funds in New York, I became disillusioned and ended up working for a non-profit called Bioneers, which promotes environmental conservation. Working in this setting helped me to gain a better understanding of externalities and how these externalities were having a negative impact on our world. Consequently, I made the commitment to research how we may transition to a regenerative economy by addressing the externalities that exist in our financial system.
What is IMPACT and what inspired Interactive Brokers to create this project?
A groundbreaking and simple-to-use investment platform, the IMPACT app is entirely focused on matching the clients’ investments with their values or what they care about, rather than the other way around. My previous work in finance provided the impetus for the concept, which was born out of my recognition of a significant hole in the financial ecosystem that could be summed up with the term heart. You know, the financial sector had been severely lacking in the human component of what makes something worth. After a while, I began to notice how our environment was reflecting this hole in our financial system, as well as how much of what individuals genuinely care about is not mirrored in how firms are doing their operations. When we provided people with transparent information, as well as the tools to make decisions based on that information, we were inspired by the idea that people would start supporting companies that operated in ways that were consistent with their values, as well as moving their capital away from companies that did not.
Tell us more about your company Interactive Brokers. What makes you the best for this project and what is the level of market demand for a platform like IMPACT?
Tell us a little more about your company, Interactive Brokers, please. What distinguishes you as the most qualified candidate for this project, and what is the amount of market demand for a platform such as IMPACT?
Over the past 30 or so years, since my father began the company, Interactive Brokers has always had the finest technology and the best rates, and we’ve always made that technology and pricing available to anyone who wanted to trade on the stock market. While we, as a firm, have never been in the business of advising people on what to invest in or how to invest, we have always been, in my opinion, the best at providing a platform from which people may take whatever financial action they choose. When I saw that we were witnessing a massive increase in environmental and social crises, I began to consider how the gaps in our economic structure were allowing this to occur. On the basis of this, I came up with the notion of filling in the gaps, including externalities, and providing people with the instruments to express their values through their financial actions. The IMPACT App was established as a result of this. These new tools, which are backed by Interactive Brokers, a system that has been trusted and reliable for many years, are quite valuable. In addition, consumers will appreciate this technology since it is not only heart-centered, but it will also function well.
The need for an app like IMPACT is quite high. As for numbers, the ESG market is currently valued at $73 billion, according to the latest available data. Millennials, on the other hand, are four times more likely than older generations to purchase an environmentally friendly product, even if it is more expensive than a cheaper mass-produced alternative. This was the fact that I was thinking about when we developed the IMPACT app. In addition, there is evidence to suggest that during the next 10 years, we are likely to experience the largest global transfer of wealth that the world has ever witnessed. Something in the neighbourhood of $60 trillion will be transferred into the hands of the millennial generation. This type of investment platform, in my opinion, will be in high demand, both as a millennial with a finger on the pulse of what millennials care about and in light of the numbers I’ve presented so far.
A mobile trading platform built on values; how do these two things interact with one another, and could you give us a walkthrough of the ecosystem?
Indeed! We went with a mobile app mostly because the next generation of investors is more likely to use a mobile device to conduct their business. Everyone who owns a smartphone, including children, should be able to access it.
The way the values component works is that when you log into the app for the first time, it will prompt you to create a values profile, which you can then save. It will next ask you a series of 13 values-oriented questions about what you care about, and you will select companies that you wish to blacklist from your future portfolio on the basis of your answers. We then combine that information with ESG data, which allows us to connect a client’s financial decisions with their global social and environmental values. And that’s how it works in practise. In essence, the smaller the gap between what individuals care about and how they’re able to express and produce that value outside of themselves with their income, the closer we will be to living on a more harmonic and aligned world.
What are the fundamental values from which an investor can choose?
A total of 13 impact values and principles are available for investors to choose from: clean air, pure water, ocean life, land health, consumer safety; ethical leadership; gender equality; racial equality; LGBTQ inclusion; company transparency; sustainable product lifecycle; mindful business models; and fair labour and thriving communities. The following ten categories can be used to exclude investments: animal testing, business ethics controversies, corporate political spending and lobbying, energy-intensive, fossil fuels, greenhouse emissions, hazardous waste, high water usage, tobacco, alcohol, and gambling, and arms manufacturers. Other categories include: weapons and gun manufacturers.
Tell us more about your organization “One Small Planet” and your mission to harmonize the wealth of people and the planet?
Wow, thank you so much for reaching out to me. I had no idea you were aware of what was going on. One Small Planet is the professional embodiment of my personality on the outside, thus it is truly my baby. My personal work has evolved over the past seven years into something larger than myself, and I came to the realisation that my work deserved to be seen by others and needed to exist as a separate entity in the world. Its founding principle is: How can we build a future that is founded on systems thinking and is regenerative in its nature? As a result, we’re working to address the fact that many of the difficulties that we’re witnessing right now, both environmentally and socially, are the result of systemic problems that we’ve all contributed to. Today, we must rely on philanthropy to address a large number of these problems. One Small Planet is a philanthropic arm that distributes grants to individuals and organisations in areas that are in desperate need of humanitarian assistance. It is performing a function that can be characterised as defensive.
One Small Planet is also on the offensive with our impact investment fund, which we prefer to refer to as a Vital Capital Group rather than a venture capital group because the investments we make are vital, which means that they are critical to the health and thriving of all life on this planet, as opposed to venture capital. If we can make a positive impact while also earning a profit, we will invest in areas where we can make a profit. This ensures that not only can people like myself invest in and support these areas, but that they are also something that is sustainable and reasonable for the entire world to invest in. So those are the areas in which we believe we can make a significant contribution to systemic change.
Boots on the ground, tangible land regeneration are the other components of our activity that we are involved in. We are now engaged in two land development projects. One project involves converting a huge farm in Kansas from conventional, pesticide-laden monocrop agriculture to a regenerative ranch that uses rotational grazing practises to absorb more carbon and increase biodiversity while also increasing yields. One Small Planet is aiming to develop economic systems that account for the health of the planet, in order for our economy to be able to incentivise the good job of generating healthy ecosystems in the first place.
At the same time that we are carrying out this work on the ground, we are also making strategic investment plays to bring about currency systems on the blockchain that will incentivize behaviour that will result in healthy ecosystems as well as clean air and water, and that will make this system equitable for all people.
We hope to share the storey of our work, the storey of indigenous people who are stewards of crucial lands, the storey of farmers and technologists who are trying to regenerate land, and the storey of our collective decision to live wisely. Using visual and written media as well as conferences and community activities, we will spread the word about these experiences.
We have all found ourselves on this One Small Planet, and the ability to care for her is the greatest gift we could ever get. This firm is the most viable option I could think of to accomplish that goal.
It appears that you have a strong commitment to environmental causes. Could you please share with us some of your project-related success stories from prior projects that you have worked on?
Over the course of just two years, our ESG department has experienced tremendous growth at IBKR. It was a significant measure of success simply to see the IMPACT app out in the world and how it is already beginning to transform the way some people think about investing. Throughout the company, we have significantly decreased our waste and carbon footprint, we have began to give philanthropically annually, and we now match the charity contributions made by our staff. We are working to achieve a more equal representation of men and women throughout the company, and we have increased diversity on the board of directors. The most significant achievement I see within the company is the excitement and enthusiasm that people have for contributing to and being a part of a company that is expanding at such a rapid pace. The fact that so many individuals, including management, are enthusiastic about the reforms we are implementing brings a genuine grin to my face. Our efforts in the ESG community have also been recognised, with us being named a finalist in Fast Company’s World Changing Ideas award, being named the #1 new trading tool by Stockbrokers.com, our Interactive Advisors subsidiary being named best for sustainable investing portfolios, Benzinga naming us best trading technology for 2020 in large part due to our Impact Dashboard, and winning the Finder Australia’s Innovation Award in the Best Investment category for our Impact Dashboard.
It seems you have a great passion for environmental causes. Could you share more of your success stories with us on other projects you worked on?
The establishment of my non-profit organisation, One Small Planet, has also been a major success in and of itself. The fact that the entire crew has rallied around this effort and aim is a significant accomplishment. To be able to work in an environment where everyone is willing to go above and beyond because they are passionate about what they do is a true blessing in my life. We’ve already achieved a number of little victories with the OSP programme in our first year.
Through our foundation, we have established strong and trusted personal ties with our grantees on the ground in Brazil, Arkansas, and Peru, all of whom are committed to the sovereignty and empowerment of indigenous cultures in their own countries. Their access to fresh clean water has been improved, and we have assisted them in developing a culture-based economy as well as the development of sustainable community spaces that are owned and managed by them in their traditional ways. First and foremost, these partnerships have been a big achievement for me. As far as I can tell, the vast majority of people working in philanthropy do not have particularly reciprocal, honest, and trustworthy connections with the people on the ground who they are assisting. Bringing this work to the level of interpersonal relationships, I feel, is half of the battle. Not only do we need to repair and reform the systems that exist outside of us, but we also need to undertake a great deal of inside work. By establishing trust, fraternity, and alliance with people whose trust has been severely eroded over the years, but by identifying points of commonality and devoting the necessary time to truly listen, understand, and be understood, we have been able to achieve incredible results. I am really grateful to Marcus Briggs-Cloud, Yube, Bane, and many other indigenous leaders who have taken the time to get to know me and have placed their trust in me to collaborate.
For example, through our land project in Kansas, we have been successful in clearing the lands of monocropped, pesticide-ridden agriculture, and the land is now recovering, sequestering carbon, and providing a home for 350 head of cattle that are performing the work for us.
And what excites me the most about this journey, as well as the achievement of success itself, is the sheer number of people who are following and establishing an economy based on natural value. The number of new systems being developed to be able to account for the health of our planet through the use of sensing technologies is increasing by the day, and this trend is expected to continue. I refer to it as “fitbiting” the entire world. We’ve come to know that seeing these data points for our own organism is really beneficial in keeping track of and improving our physical and mental wellness. Now, I feel it is a collective truth that we must track and enhance the health of our shared organism, the Earth, and that we must do so urgently. While working in that field, I’ve experienced incredible levels of creativity, passion, and honesty, and it’s been a pleasure to witness what can happen when a group of individuals get together to address a common problem together. In recent months, I’ve noticed currencies on the blockchain that are linked to carbon stored in the ground, and the value of these currencies is increasing. This, in my opinion, indicates that humans are beginning to believe in various types of worth and are putting their money where their mouths are in this regard. This is a significant victory for all of us. The greater the extent to which our economy can reflect the significance of our natural environment, the happier I am. People who are healthy are attracted to healthy land, and healthy people attract healthy land.
At what stage of development is the IMPACT platform and what should we expect next on your roadmap?
What state of development is the IMPACT platform now in, and what should we anticipate to see next on your development timeline?
That is an excellent question. The IMPACT platform is now in the MVP, or minimal viable product, stage of development. We are pleased about the potential impact this will have and how satisfied our clients will be as a result of it. We’re also really thrilled about all of the additional functionality that is now in the works and will be integrated into the base MVP product in the future. We intend to continue to develop our cryptocurrency offering by adding a social component that will allow people to share and learn from one another through a social networking aspect of the platform. A financial lens will also be added to the platform to provide clients with greater visibility into the more traditional components of their investment strategy. And that is all I have to say for the time being. When it comes to the potential for extension of this platform, the sky is the limit. Bringing all financial instruments to the table for our clients to access and express their beliefs with their finances is something we are committed to doing.
Do you have any chances for investors and partners on IMPACT that are now available?
Yes, the first step is to download and place your money with your heart. Talk about it with your friends and family, post about it on social media, and let others know what you think. And, if you feel so inclined, you can support our continued ESG activities by purchasing IBKR stock.
In the future, we want to add a social media component to the platform’s functionality. In other words, after we go live with it, you will be able to share your strategies, learn from other people who share your ideals, and share what you’ve learned with them. We’re very thrilled about what the future holds for us in this regard.
At the moment, we’re overjoyed that it’s now available. We sincerely hope that the market responds in the manner in which we anticipate. We are thrilled to be able to make this additional functionality available to the public. Personally, it’s something that I’ve been concerned about as a huge issue in our world for quite some time now. And it’s a thrilling time to be able to contribute to the solution of this challenge.
Do you have any more information you’d want to share with our readers today about IMPACT?
We strongly encourage investors to experiment with the IMPACT app. Please see our webpage at