Sustainable Investing | Douglas Hansen-Luke

It's my pleasure to introduce Douglas Hansen-Luke on behalf of the Happiness Festival. Douglas works for Future Planet Capital. Douglas, please tell us a bit more about your work and the happiness that you're creating in the world.

Sure, thank you, Abhi. It's great to be here. I'm very happy to be here. In fact, I have to say that, but I really mean that, and I'm sure that most of the people at the festival feel the same way. I founded Future Planet Capital just over 4 years ago. To allow people to invest in the brightest minds addressing global challenges and to do so for profit. So we're impact investors and we're investing in the science, technology, the innovation coming out of the world's top universities. So it's an exciting job. We've got a team, we've managed to deploy about $100 million. It's all very much about profit, but it's also very much about purpose. And that, I think, means that we're, we're creating a work environment and an environment for the world, hopefully, which is leading to not just dollars and cents outcomes, but also to a better world. And that's something that I strongly believe makes people happy.

So Douglas, how do you think impact investment can contribute towards a happier world?

It's difficult to define happiness exactly. But I actually think one of the easiest ways to define it is the absence of unhappiness. It's the absence of pain or of hurt. So let's start with a kind of Maslow's Pyramid of Wants or Pyramid of Needs. And if you're investing in an impact way, what you're doing is you're trying to avoid— meet those basic needs and avoid hurt and unhappiness. Now we're addressing global challenges profitably. And what does that mean? It means getting people water, shelter, housing, addressing an unequal world, giving people opportunity through education. So I think in a very dramatic, very clear way, impact investing is about reducing harm. Reducing harm paves the way for happiness. And it's for those people particularly who are on the cusp of making do or not making do, the kind of MacIver principle where earning a penny a day more than you spend is the difference between happiness and suffering. There's a huge marginal benefit to actually producing an outcome that allows wealth to grow for many more people. Or if we're thinking about technology, the small changes in digital technology, which may not cost a lot, but when you have the internet available to, you know, continents and people that didn't have it before, you're opening up an entirely new world to them, which again can lead to huge happiness. And on that same theme, and I joke about this a little bit, but when you actually are talking about global challenges or sustainable development goals, you come to health, you come to climate change, and you're almost saying, how many people's lives are you saving? You know, if it's a drug to stop, or a vaccine, we're investing right now in one of the vaccines coming out of Oxford. If it's a vaccine that will stop people getting corona or reducing the symptoms, that means extra lives. Years of lives and people having a chance to be happy. So a lot of what we're doing is eliminating the unhappiness.

Really interesting. Thank you so much for that. Tell me, um, what does happiness mean to you, Douglas Hansen-Luke?

Well, for me and for the people that are working here, and not just for us, but I think for all people, um, it's somewhat of a cliché really to say that it's millennials who care about purpose. I think actually it's all of us. I'm definitely not a millennial. I'm somewhat older than that, but for me, having a sense of purpose in my work means that when I wake up in the morning, I'm not saying I don't want to go to the office or stroll across from the bedroom to my home study here. What I'm saying is I want to do this because when I'm working, even if it's tough, even if there are difficult elements or boring elements to it, what I'm doing is worthwhile. And that sense of purpose is something that really excites me. That's why I do this. And it's why I moved out of my career in traditional asset management into something where I was able to say, yes, absolutely, you've got to have a profit. If you don't have a profit, there's no sustainability. There's nothing sustainable about a loss in year 2. So you've got to have profit. But if that profit is actually being used for a higher purpose, then you can feel very good. And it's not a difficult concept. And it's one that I, It surprises me that people haven't more readily embraced this because it's no different from having your cake and eating it. You're going to have your basic needs covered, you're going to generate growth and prosperity, and you're going to do it because you feel that you're doing it without taking it from someone else.

Yeah, I think one of the emerging patterns and themes that we've seen from the Happiness Festival is that, you know, waking up in the morning and being excited about the day is a really good indication as to whether or not you found your purpose and your why and whether or not you've develop the cadence in life that is attuned to happiness. And I guess, do we deduce from that then that you're much happier now working in an area of finance that is focused on impact because you can associate a direct meaning to the work you're doing and less so when you were doing traditional asset management?

It's not so much the direct meaning. I think it's the ability to make a difference. So I was 40, I suppose, uh, your typical midlife crisis age, where I said I was going to move out of what I was doing and, and into this field, into responsible and impact investing and into more public service-oriented work. And when I described that to people, I said, look, there's 10,000 large fund managers in the world. There are over 100,000 funds and an awful lot of them are pretty much the same as the others. And if I died now, it wouldn't— how much of a difference would it make? Um, so the key to people's meaning in life, their self-realization, their happiness, is about doing something that's worthwhile. But it's also about that element of agency. Can I make a difference? And what's great now is— that was 10 years ago when I started in this particular field. What's great now is that at the time I felt like I had to take a big risk. I had to move out of the mainstream not quite do the good life and start growing vegetables in the back garden, but definitely it felt like I was doing something very brave and different. A lot of people said, "Are you sure you want to do this?" Whereas now, I think whether you're in your own company or a small company or in a large company, you have absolute acceptance when you turn up to an interview and say, "I want to work in this role because it's going to make a difference and because I think it's going to be good for humanity overall." In fact, although it's something that you'd have hoped people always felt and wouldn't have wanted to work in a role that wasn't going to produce that, now it's there, it's explicit, and you don't need to go off and go for a moonshot landing. You can do it in almost all major companies, as well as the startups and the entrepreneurial ventures that I'm involved in.

Really interesting answer. I'd love to get your opinion on politics, because I know that it's an area of interest for you. Something that you've looked at quite seriously. So from a policy perspective, what sort of policies do you think we should be focusing on? You know, there's that old adage that what gets measured gets managed. What should we be measuring and what should we be managing to make sure that we are creating a happier world, not just, you know, today, but also, you know, for future generations?

You're going to get me very wonky at this point. I'm going to start talking about the minutiae of ESG analysis and fund management and how you could apply that to public policy. So I'm going to step back a little bit, and before diving into that, let me talk about the things that are the big issues. So, so for me, if we're looking at the big drivers of happiness, I've just talked about one— agency, that ability to make a difference. And that then means that if you're talking about that in a public policy position, you're actually saying to people How is it that you in your life can make a difference? How do you start your analysis of what you're doing in your career in terms of that? And actually that whole feeling, that knowledge, that confidence that you can make a difference is something that I think starts with education, but it's also something that with public policy and politicians, they all need to be talking about that. And everybody in the country needs to feel that they have a shot, they have a chance to make something.. And that's two parts. One is the can-do mentality, which really can be led from government. Instead of a nanny state, it's about government saying, we will support you to achieve your own potential. The other side of it is this aspiration, and it's also this sense of fairness. So, you know, aspiration and encouraging people, letting them feel that it can happen, that's only true if the world actually is an equal place, that if you do have the talent, if you do work, you have a chance to be successful. Not every time, but that the table, that the odds are stacked fairly, not against you, not for you, but fairly. And from a public policy perspective, I think whether you're right-wing or left-wing, it's in everyone's interest in exactly the same way as sustainable or impactful investment is. It's in everybody's interest to actually have a fairer, more equal society. And that doesn't exist yet. And, you know, the pandemic we've got now, the way the world was growing previously, has tended to increase inequality in the richer countries whilst leveling off the extremes globally. We have, where people can see it, a sense that the world isn't always just and fair. And that's where politicians can make a big difference.

So you think that inequality is commensurate with unhappiness and equality is commensurate with with happiness.

It's an amazing thing. And you know, you talked about measuring society and happiness, and I'm sure everyone at the festival have heard about Bhutan, and I'm sure other people have quoted it as being the happiest country in the world. It's not the richest country in the world. And you know, when Sarkozy was saying, let's measure a happiness index and work out, work to maximize happiness, it's not about money. It's actually about the perception of fairness and justice. And The living in a world which you think is fair, not envying your neighbor because they've got something which they didn't deserve, is actually one of the biggest causes of both happiness. And if it's not there, if you have that envy, if you have that jealousy, that sense of inequity or unfairness, it's actually one of the biggest drivers of unhappiness there is. You know, I talked about Maslow's needs. Once you've got past the, the basic economics and self-sufficiency. You've got to find a way to balance life for people where there's sufficient challenge and there's sufficient fairness. And those two things together, I think, produce very happy, stable human beings.

Really interesting. I think, um, the political sphere would be lucky to have you, um, because I certainly get the feeling that there aren't enough politicians that are speaking in this, um, you know, with this sort of rhetoric. It still feels like, um, you know, a lot of people in Parliament and certainly in the, in the White House are, um, are too concerned with GDP and are too concerned with the status quo because of, um, the short-term limits that, that come with our politics. But I'd love to, I'd love to shift now back to the individual level as opposed to the sort of macro societal level or the state level. Um, you know, you're a family man, you're a stepfather. What sort of advice do you give to people who, um, uh, you know, who are around you in terms of finding that happiness in their life? Because, you know, what you're saying around purpose and meaning certainly resonates with me, and I'm sure with lots of other people listening in and watching this. Um, but how do you— how does someone go about finding that purpose and meaning in their life?

It's two things, only two things. It's about what you enjoy and it's about what you're good at. And actually, if you think about those two and put them together, there are very few things that we enjoy over the long term, unless you're a very special person. Very few things that you enjoy over the long term where you're not great or good at it. And, um, there are very few things that if you're good at it, you don't enjoy it. So any advice I give to anybody starting out when they're looking at careers is try as many as you can, look at and examine as many as you can, but ultimately work at something that you can make that difference, where you're good. And, uh, and when that happens, you'll find that you're happy. And the happiness element of that is that it's something that isn't just that you're good at it, but you also see it as being valuable, that it's got some intrinsic value to not only you but to the rest of the world as well. Put those two together, and I think you, everybody will have a happier life. And I think companies as a whole would succeed far more than traditional companies have, where vast elements of the workforce are actually disengaged with the work that they're doing. It's difficult to be disengaged if you're enjoying yourself and you're good at it. Companies should spend so much more time matching that rather than perhaps the other elements of human resource development that they work on.

That's really, really important advice. Um, I'd love to shift now to Rwanda because that's the country that you and I met. And I just wonder if you could sort of opine on, on happiness in, um, you know, some people call it less economically developed countries. Um, some people call it level 1, 2, 3, You know, I certainly feel that there are places in the world that aren't as affluent per se, but a lot of the people are happier with very little in comparison to us in the West. So I love, you know, you've traveled around the world. What's your sort of perspective on, on the sort of urban Western living that we've created as opposed to some of the less economically developed places that you visited like Rwanda?

Sure. It's a really, really interesting point because one of the greatest risks to happiness, I think, is when we link happiness to material consumption or to wealth, then we're going to fall victim to the trap that actually the marginal pound, the marginal dollar, really doesn't make you as extra or happier than that first pound or that first dollar. You know, how much is enough? And actually, you know, how much is it that money is there for anything other than a yardstick for achieving what you most care about? And that's why I think in poorer countries where they have got those greater challenges, where they survive, where they see that growth, you do have that incremental happiness from the extra money. But also you have an appreciation because you're so much closer to the abyss where We've heard about it in Brazil where there are so many people that need to work every single day to be able to eat, to be able to have shelter. And if you don't have a day's work, you don't get paid and you're in trouble. When you're in a— that poorer environment, when you have enough and you're actually able to see what could be the case if you didn't have it, you value what you've got so much more. You value the important things. And we all saw it actually in the first month, 6 weeks of the pandemic. I think it's wearing off now, but where, as we went into the pandemic, we realized how fortunate we were in Britain, uh, how fortunate we can be in developed countries where we have our families around us, where we have comfort, where we have the medical system. And for a short period of time, we forgot our striving for more cash and we remembered just what we had. And if we can find some way, and it's going to require the greatest philosophers, so it's going to require, I think, the greatest leaders and storytellers and motivators to actually get us into a position where we say, well, it's not about maximizing GDP growth, and it never should be. It should be about maximizing individual financial growth. But beyond that, it's not just the financial. It's saying, will an extra holiday abroad make a difference to you? Or actually, would you feel much happier gardening, which isn't going to require you to do an extra 5 hours of overtime? In fact, it's the opposite. You do not do the overtime. You can go out there and you can actually appreciate nature in your own back garden, in your own home. And, you know, I'm waxing somewhat lyrical here. And it's, it's not just the question you talked about with developing countries, but I think it's the case for all of us to be able to stop look, see what's most valuable, and then try not to get sucked into the rat race again.

Really, really important advice. Before we wrap up, I'd love you just to opine on COVID and I guess what your company Future Planet has done in the response to COVID, and I guess giving advice to our listeners in how they can get through this difficult period.

Well, I talked a little bit at the beginning about when you're solving global challenges, one way that you can measure it is how many lives you can save. And if we're talking about infectious diseases and pandemics, very, very clearly you can immediately see that what you're doing can save lives. In terms of economic impact, we're talking about over $8 trillion of economic cost as well, which isn't just— it's not just a number which we can't even visualize, it's so big. It's about people standing in queues looking It's about a third to half the workforce in some industrialized countries actually being furloughed or out of work at the moment. So when we've been investing, we've been looking at 3 different elements. You know, the first is what can we do to deal with the struggle and the crisis right now? And this is about treatment. It's about testing. And we've looked at companies that have got the next generation of testing that can do antigen testing and give you a result within an hour. That's very exciting. Then there's the work that we're doing to actually help the system cope better. So there's one company from Oxford called Navinia, which has got the Uber of people on how to improve with indoor mapping and locating, how to improve productivity and making sure that the right people are in the right place at a hospital. We don't have that waiting. It's looking at cleaning and disinfecting in a hospital. And then there are very exciting things in the next generation, you know, the super beings that we're all going to become. We're investing in DNA companies that are actually looking at the diagnostics and seeing how what's inside of us is going to mean that each of us have a personal response to disease or a threat. All of these things are exciting. We've teamed up with one of Britain's biggest banks, Barclays, to work with their clients who are looking to provide funding and who also want to both make money but make a difference. And certainly we've found great opportunity here. But we've also found that it sometimes does take a crisis before people will move. And that's the one good thing that's come out of this, that a lot of new technologies that may have taken years to actually get into the market are being put to use within weeks and months. And people saying, gosh, you know what, there was no reason it needed to take that long. And this is a better way of looking at life in the future and work too. And I hope that will continue.

That's really, really useful. Thank you so much for your contribution towards the Happiness Festival and the Happiness Institute, and best of luck with your very interesting business.

Thank you. Great talking to you. Bye-bye, Alby.