Finding financial meaning in your work
Larry Fink, chairman of asset management giant Blackrock, said in a 2018 letter to corporate chief executive officers that “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society”.
From choosing a job based on purpose rather than just money, to investing in companies that do good along with doing well, more people are managing their financial life in line with their beliefs, so that they can make a difference in the world and have greater meaning in what they do.
These trends reflect the shifts in peoples’ goals, led by millennials.
A survey by recruitment firm Manpower Group, for instance, found that a majority of millennials worldwide, including in Singapore, say purpose is a priority in their career.
A recent Employers of Choice Survey by recruitment firm CareerBuilder Singapore similarly found that 86 per cent of millennials want to join a company that practises corporate social responsibility.
On the investment side, the Natixis Mind Shift survey showed that 73 per cent of millennials want to know that their investments are “doing good”.
And financial expert Anna Haotanto, who runs The New Savvy website, said that social impact investing is now part of millennials’ portfolio mix, and they want proof that their investments align with their goals and purpose.
More broadly, the National Youth Survey here showed that contributing to society and helping the less fortunate are among the top 10 goals for youth aged 15 to 34.
HAVING A PURPOSE
One of the top motivators for employees, Facebook found in a global survey of its employees, is “cause”.
Cause is about purpose, and feeling that you make a meaningful impact, along with identifying with the organisation’s mission and believing that it does some good in the world.
A key to having a career that is both financially rewarding and has a cause is selecting a company with goals that match your values.
Purpose is so important, finance portal Zuu opined, that companies that are rated as the best workplaces in Singapore are making sure they achieve their goals in ethical and honest ways, and publicly showing that they are doing good for the planet and humanity.
In the legal profession, for instance, Singapore’s Chief Justice Sundaresh Menon said that “a timesheet should never define your identity or determine your life’s purpose. It has been said that the roots of happiness grow deepest in the soil of service.”
He encouraged law graduates to do pro bono work. “Let those experiences serve as the seeds of a career steeped in purpose.”
To find out about cause and purpose when you’re selecting an employer, check out the company’s vision and mission to see whether they align with your goals.
When you are at a job interview, ask how your work will affect the company’s success and how it will have a positive impact on the causes you care about.
And you can find out whether the firm runs corporate social responsibility (CSR) programmes or offers time for you to volunteer, which can make your work more meaningful.
MAKE MONEY DO MORE FOR A CAUSE
Along with having a career that provides more than just financial remuneration, millennials want to make sure their investments offer more than just a financial return, too.
As Henry Ford said, “the highest use of capital is not to make more money, but to make money do more for the betterment of life”.
Investing with a conscience now go beyond excluding alcohol, tobacco and firearms from a portfolio.
Investors today want their investments to align with a more rigorous standard of good while achieving a maximum return.
To reach that goal, investors can create a screening process to find investments with strong environmental, social and governance (ESG) practices.
For instance, do the companies have diverse boards? Are the businesses solving problems such as energy sustainability?
Investors should also look at the company’s stated intention about having impact, measuring results and transparency.
Investment manager Neuberger Berman suggests a 4A approach.
- Avoid firms with negative outcomes via their products or services
- Assess the implications of ESG risks and opportunities alongside traditional investment factors
- Amplify positive outcomes by selecting companies that benefit people or the planet and
- Aim for companies that contribute solutions to pressing social or environmental challenges.
The returns from investing in such companies are likely to be better, too.
Larry Fink, chairman of asset management giant Blackrock, said in a 2018 letter to corporate chief executive officers that “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society”.
Standard Chartered Bank noted that incorporating “sustainability” as a criterion appears to support improved corporate performance in specific parts of the market, such as bonds, real estate and emerging market equities.
And investment research firm MSCI found that high ESG-rated companies generated abnormal returns, often leading to higher profitability and dividend payments.
When you’re not at the top level of a company or have smaller amounts to invest, it might seem difficult to ask about cause or select investments based on purpose.
More people are looking for cause-driven companies, though, so analysing companies better or overcoming your reluctance to ask questions about the company’s practices is no longer out of the ordinary and can give you a more meaningful financial future.
