Researching a company’s environmental impact, governance or social record isn’t necessarily ideological, it’s just a more robust and useful way to do investment research. That’s the core view of veteran Wall Street analyst and executive Erika Karp, who says ESG issues have proven to be material to investment outcomes and don’t imply giving up competitive returns. Karp, who headed global sector research at UBS Investment Bank, founded Cornerstone Capital in 2013 to pursue what she calls a more regenerative and inclusive form of capitalism. “Founding my own company taught me about the power of speaking out in a focused way,” she said. “At UBS we did a lot of great work, but Cornerstone had impact because of its laser focus.”
Karp plans to continue that focus in her role as chief impact officer at Pathstone, the advisory firm that acquired Cornerstone Capital this past March. She believes that diversity plays a key role in effecting change because it expands the ways of looking at the world. And to make change happen, Karp believes “it’s really important to make people feel just the right amount of uncomfortable.” Making them too uncomfortable, she says, can drive them away, but if they’re not at all uncomfortable, they won’t challenge themselves enough. “I tried for that balance when I came out on Wall Street 25 years ago,” she said. “I would do little things like say, ‘my wife,’ instead of ‘my partner’ so people would learn.”
— Evan Cooper