Posted in GreenBiz
June 15, 2022

Goldman Sachs Foundation president Asahi Pompey on having an impact


For Asahi Pompey, there is no half-empty or half-full glass when it comes to the current sustainability scene. The glass is full — and overflowing.

As president of the Goldman Sachs Foundation and one of the most infectiously optimistic humans I’ve shared virtual space with, the hardest part of Pompey’s job is figuring out where best to allocate capital given the abundance of worthy organizations to support.

Homing in on sustainability in capital markets as a wider category, and ESG investing specifically, one of the core tenets is that it is decidedly not philanthropy. Rather, it is the pursuit of profit with serious consideration for and integration of loftier (although often poorly defined) goals such as purpose and impact.

It is a truly tumultuous time for the ESG investing industry: There’s confusion about what ESG even is, what it’s meant to achieve and how it does so. As such, I was curious to learn the vantage point from a foundation such as Pompey’s as to how it conceptualizes sustainable investing and how the pushback against ESG and sustainable investing are, or aren’t, affecting her work.

As Pompey told me of these past few years of pandemic, “You can either see it as one of the most challenging periods or a period that presented an unprecedented opportunity for us to get focused on community impact — not with words, but with deeds.”

The conversation has been edited for clarity, length and style.

Grant Harrison: Asahi, your nearly 17-year tenure with Goldman Sachs includes roles as co-chief compliance officer and global head of compliance for the investment banking division. How do those experiences inform how you lead the foundation?

Asahi Pompey: I think I’m maybe the most unlikely partner at Goldman Sachs, and an unlikely president of a foundation. I grew up in the housing projects in Brooklyn when my family came from the Caribbean, and then grew up working on deals, IPOs and M&A, but then got a call from the chair of the firm, John Rogers, to take on this role with the foundation. If I had blasted out my resume to huge foundations and said, “I want to be the president of your foundation,” they would’ve said, “No way, you don’t have any experience in this area.”

Overall, the critique in the sustainable investing space centers around the false dichotomy between profitability and reaching sustainability goals.

It’s been incredible to see the parallels from a legal role with running the foundation. In particular, the same rigor, intensity and focus that we deliver to our clients in working on a merger is that same rigor we deliver to our 10,000 small businesses, our women entrepreneurs in India and the Black women and girls that we’re working with through One Million Black Women. There’s a “Goldman standard,” if you will, that’s applied wherever you are at the firm and I can vouch for that from moving from my legal role into the foundation.

Harrison: The ESG investing space has absolutely exploded these past two years, but not without pushback — dubiousness about how useful ESG ratings are and the conflation of ESG investing with planetary action and sustainability. As a corporate foundation focused on investing sustainably, what has your experience been with the pushback? Are there criticisms of the ESG space that resonate with you, or that don’t?

Pompey: When I hear critique of a space, I always think “OK, what’s underpinning this broad critique? Is it just skepticism, or is there something more that the recipient of the criticism should be doing or doing differently?” Overall, the critique in the sustainable investing space centers around the false dichotomy between profitability and reaching sustainability goals. A key critique is that yes, we hear you all talk about measurement and metrics — so what’s the real impact? It is an important critique that should be addressed upfront with, again, sunlight and transparency, reliable data and an open book around whether a sustainability report really shows what’s happening under the hood. Criticism is welcomed and we want to show what we’re doing.

If there’s more we need to learn from the current ESG critiques and subsequent dialogue, then we’re looking to do that. Rome wasn’t built in a day — we’re all marching towards a shared goal. It won’t be a straight line and there will be some curves along the way. I value an engaged dialogue around what we are doing, and what more can be done. Again, I don’t shy away from criticism. I embrace it and think about what we could be doing more, differently or better.

Harrison: “Sustainable investing” is a quite broad category. How do you conceptualize corporate philanthropy’s role in shifting the investment industry to support the transition to a clean and just economy?

Pompey: My view may be controversial, but I always think I’m trying to get myself out of business — trying to work myself out of a job in terms of the need for philanthropy. Philanthropy will always have a place, but the reason I say this is that if we can find ways to invest in communities and in people that are providing returns, I think it would decrease the need for as much philanthropy as there is currently.

But there is just so much going on in the ESG investing space and a key issue is, of course, how do you measure it — what’s really going on? What’s happening as a result of the investments? Accountability in this space is just so important. And I think that’s at the core of everything that we do at the firm.

The other two things I’d say: sunlight and transparency. There is a need for constant measurement of impact, to hold ourselves accountable and to have others hold us accountable. We know they will, as they should.

Harrison: You’re leading a handful of ambitious initiatives leveraging philanthropic capital to invest in women, narrow opportunity gaps for Black women and support small businesses in the U.S. Could you share some highlights of the progress these initiatives have made thus far?

Pompey: I get to spend my day job talking to entrepreneurs about moving their business and employees forward. Think of 10,000 Small Businesses as a sort of free MBA from Goldman Sachs that provides the best-in-class education on growing your business. We’ve been running the program for over a decade and we’ve graduated 12,000 entrepreneurs. During the depths of the pandemic our CEO, David Solomon, called me and said, “I want us to go to 20,000 small businesses.” We’ve seen the importance of small businesses, we know they’re in need and we want this to be delivered to 20,000. In terms of measuring impact, we know those entrepreneurs have grown their revenue and at the moment, they account for about $16 billion in annual revenue.

We’re now 13 years into our 10,000 Women program. We’ve worked with women entrepreneurs in over 200 countries and with the World Bank to launch a capital facility called the Women Economic Opportunity Facility, specifically with a gender lens to give capital to women entrepreneurs in developing countries. Women entrepreneurs are an amazing credit. And, when they grow their business, they mentor an average nine people in their community. I think of it as the blast radius of a single woman entrepreneur.

We launched One Million Black Women in 2021. As Malcolm X said over 60 years ago, the most neglected person in America is the Black woman. That still rings true, so we decided to do something really different and not only do a philanthropic investment of $100 million, but also $10 billion of balance sheet debt-and-equity investment focused on Black women and girls. It’s early days, but we’re excited about where it’s going to take us and, frankly, what we’re hearing back from Black women and girls across the country.

Harrison: What is the relationship — formal or informal — between the foundation’s work on climate and sustainability and the other business functions at Goldman, such as the Sustainable Finance Group, that are working on the same issues?

Pompey: Maybe the best way to describe it is that we sit on the same floor. We’ve been back in the office over a year now, and our teams sit down the corridor from each other in the same area. That’s part of building this muscle — the meetings in the kitchen and the shared conference rooms alike. These aren’t teams that are working separate from one another, which I think was by design. We want to make sure that we’re fostering the highest level of connectivity.

You can’t have philanthropy there, ESG investing here and climate people over there. It has to work together seamlessly, where you’re looking for opportunities and connectivity and partnerships across the board. That’s when you really can get a scalable model. So, that sort of physical manifestation is one of the ways in which we’ve tried to ensure we make that possible.

Harrison: Your background is (refreshingly) not that of traditional leadership in the finance sector. Born in Guyana, raised in Brooklyn’s housing projects, you then supported yourself through high school in Japan, undergrad at Swarthmore and then Columbia Law School in New York. How has your lived experience shaped your approach to corporate philanthropy?

Pompey: Having lived around the world, I’ve gained a solid sense of our shared humanity, which I think has come even more to the fore over the last couple of years. Having a fundamental understanding and really seeing how much more we have in common than not, matters.

Living in so many different parts of the world is definitely one thing that informs my approach to philanthropy. And I think the rigor around the measurement of our impact is another sort of capstone of my approach to our philanthropy. The long-term investment view is absolutely critical.

 

June 15, 2022 at 03:25PM

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