Between the banks of the Cuyahoga River and Lake Erie, Cleveland has transformed from another depressed notch in the Rust Belt to a diverse springboard for advances in manufacturing, financial services, healthcare, biomedicine, and higher education.
However, the city still faces significant social disparities as it grows and redevelops. These gaps exist alongside and often intertwine ongoing challenges in the opioid epidemic, urban sprawl, and water quality issues.
Fortunately, the Cleveland region counts several regional foundations determined to make a community impact on these issues. This attention makes the city especially fertile ground for investor support of environmental, social and governance (ESG) issues, as these three Cleveland-based organizations and foundations demonstrate.
The Cleveland Foundation: Seeking Social Impact
Investors seeking to make a community impact by supporting socially responsible Cleveland-area companies can look to the Cleveland Foundation. In 2019, the Foundation committed to allocating $150 million to social impact investments by the end of 2022 across a variety of Foundation programs:
- The Cleveland Black Futures Fund provides grants to Black leaders and Black-serving organizations in Greater Cleveland.
- Neighborhood Connections supports resident-led projects and community network building in Cleveland.
- The Cleveland Innovation Project connects innovators, institutions, entrepreneurs, and industry to foster technology-led growth and inclusion in Cleveland.
The Foundation goes beyond simply handing out grants, employing its socially responsible investment pool for direct investment into the community. This pool consists of fossil fuel–free public equities screened on ESG factors and employs a place-based investing emphasis on Cleveland-area corporations.
Additionally, the foundation highlights gender and racial equity by requiring all companies in the pool to have female and minority representation in their executive management and actively seeking investment managers that are at least 50% minority- or women-owned.
Great Lakes Impact Investment Platform: Going for a Greener Environment
The Great Lakes Impact Investment Platform aims to promote environmentally sustainable economic growth through a place-based, impact-focused investment platform. The Platform offers “various investment products intended to deliver demonstrable impact and revitalize the region’s waters, while also aimed to generate competitive, market-based financial returns.”
For example, the Platform’s Northeast Ohio Regional Sewage District’s Shoreline Consolidation Sewer & E-09 CSO Control and Relief Sewer project plans to reduce wet weather combined sewer overflows released into Lake Erie in the Greater Cleveland area by 220 million gallons annually.
Fund for Employee Ownership: Coordinating Corporate Governance by Employees
Research points to employee ownership as a path to a more equitable economy. It can promote higher incomes, assets, and savings among workers as well as increased productivity and commitment to local communities.
The Fund for Employee Ownership acquires small- and medium-sized businesses and converts them to employee-owned businesses. This arrangement gives existing employees a stake in the profits, an opportunity to build wealth, and a voice in their workplace. The Fund thereafter continues to support these businesses through the Evergreen Cooperatives of Cleveland.
These three examples represent the proverbial tip of the iceberg for impact investors. Although Cleveland’s Rust-Belt inheritance still requires buffing, opportunities to support ESG issues shine brightly.