Note from Capitol Hill

Author: Shane Yonston

July 4th, 2025

Dear Clients,

Last week I was in Washington D.C. at the Annual US SIF Conference and on this Independence Day I wanted to share my notes from the uplifting experience.

While this may not be at the top of your list of concerns given everything else that's happening, I want you to know that, as fiduciaries and stewards to your financial well-being, we participate in advocacy not just because it's our civic duty, but also to protect your shareholder rights and reduce systemic risks to your portfolio.

In addition to employing traditional financial techniques like fundamental analysis and portfolio diversification which can help reduce investment risks, we also serve as members of the US Sustainable Investment Forum, a trade association advocacy group of which I have been a dedicated member for over twenty years, to support the broader adoption of socially responsible investment practices throughout the financial services industry.

In my capacity as a long-standing member of US SIF, I was selected in 2018 to help launch their Policy Leaders Program, organizing other investment professionals to promote shareholder rights and sustainable investing to members of Congress. As such, I spent one of the days last week on Capitol Hill, joining dozens of US SIF members to share best practices and meet with congressional leaders on some pressing matters. All in all, despite the shared challenges we are facing, our meetings went well on Capitol Hill, and I am encouraged by the discussions we had and, in the solidarity and brilliance of our community.

In addition to advocacy, we also had two days of professional education with dozens of leading specialists discussing a range of industry topics. My favorite session was Shaping our Responsible AI Future: Accelerating investment opportunities in an evolving and competitive world, led by a top-shelf panel of experts: Ian Monroe, President & CIO Etho Capital, Govind Shivkumar, Director Investments Omidyar Network, Harlan Tufford, VP MSCI Research, and Christopher Weber, Head of Climate & Sustainability research, Blackrock Investments Institute.

During the session, they covered the nexus of Artificial Intelligence and Renewable Energy, among other issues. Despite the hype around energy costs being driven by AI data centers and crypto mining, I learned that energy costs make up only 10% of new data center costs and given that costs of energy production and storage continue to plummet, panelists felt the real limits to AI growth are the availability of micro-chips and quality language data. Additionally, many corporations continue to make strides toward aggressive sustainability goals, despite the lack of political leadership, albeit with less public enthusiasm.

In fact, the theme of "vibes vs data" came up in multiple sessions, and the overall sense from the conference was that the clean energy transition is well under way and inevitably moving forward, although no doubt will move at a slower pace given the current political environment. One plenary speaker declared optimistically that the US is responsible for only 11% of global carbon emissions, and that our slowed pace of decarbonization will not thwart the global movement. Furthermore, 90% of all new energy sources being developed are renewable, because of the cheap cost and quick onboarding relative to other sources, and so we're expecting to double our reliance on clean energy, mostly solar and wind, from 21% to 44% by 2050. So, despite the gloomy vibe, some of the data is pointing toward a bright future.

At the end of the day, investors across both sides of the aisle share a common goal of strengthening our financial system and the broader economy. While we might differ in our approach to achieving these outcomes, the business case for responsible business practices is well established and can be an effective tool for bringing political leaders together for the benefit of people and planet. In such divisive times, I feel it is critical for us to employ every tool at our disposal.

It is my hope that these efforts will result in responsible, sustainable growth in the markets, real value for our shareholders, and ultimately a better world for all of us. It is not an overstatement to declare that money and markets influence politics, and when we collectively move our money in alignment with our values, we absolutely make a difference on the system at large. And in any case, I find that being part of a solutions-oriented endeavor is always empowering.