Heartland Hosts Annual Family & Partners Meeting in DC

Co-Chair Steve Sleigh kicked off the meeting with an overview of Heartland for the new attendees providing background on the organization and partnerships. He also acknowledged the breadth of work done by Tom and Kristen with the limited resources Heartland receives noting, "This organization does more with fewer resources than just about anybody else out there."

Steve also welcomed Ryan Whitmore who was a Fellow in the first two Sumer classes of 2017 and 2018. Ryan currently works on ESG issues with the World Wildlife Federation.

Co-Chair Debbie Nisson emphasized the "unique table" of Heartland's partners including asset managers, investment consultants, pension consultants, labor, educators, and more. Looking at these groups, the Heartland Family & Partners manage or advise on roughly $4.5 trillion dollars.

Heartland needs to grow and continue doing the important work it's been doing. Below is an overview of our various guest and speaker presentations.

Betony Jones, Department of Energy

We're at a turning point. When I saw the Inflation Reduction Act (IRA) passed, that was my first thought. This addresses greenhouse gas reduction by 2030 - a 40% reduction - bigger than anything we've ever seen.

But it's also reshaping the economy, if you think about it:

• Labor standards are baked into the funding opportunities,

• With a focus on domestic content and on-shoring domestic supply chains, and

• With the generosity of the incentives to get companies to setup shop here in the US.

It's really game changing. Thinking about job growth, this will spur private sector investing in manufacturing. And we're going to see job growth across other sectors.

With the Bi-Partisan Infrastructure Law (BIL), we are seeing a lot of investment in clean energy

infrastructure. The Inflation Reduction Act takes that to another level for more incentives for infrastructure but also production of clean energy and clean energy products.

So it's really an exciting time. When you think about these charts showing the growing gap between labor productivity and wages, this will reverse those trends for the growing wealth gap, and persistent gender and racial disparities, etc.

Here, we have a set of tools to reverse these trends to ensure US competitiveness going forward is conditioned on creating good quality jobs for American workers.

Brad Markell, AFL-CIO

For investors, using union, high quality and trained labor is an advantage to get your project up & keep it running. Investment tax credits 6% for your project and a separate 24% investment tax credit for prevailing wage and apprenticeships.

Employers that pay well have no issue finding workers. Ford in Louisville had 1000 job openings and 17,000 applicants showed up. Brad noted that labor costs are not the main driver of total costs. For example with battery manufacturing, paying full union scale rather than of $18-20/hour result in $150-200 per battery for $18,000 battery packs.

Solar costs are coming down fast, so we will see a lot more solar in the next 5-10 years, but we have to make sure that the U.S. is investing in the next generation of technology development - the cutting edge is in China today.

Andy Levin, Center for American Progress

There’s a lot of contention about watering down community benefit plans (CBPs or CBAs) that are required by the IRA in order to obtain investment incentives. We need to sort out the details by looking at the "Investing in America" package after the fact that we were able to pass it in the 117th Congress, and ensure we stay with the mission.

There is a huge amount of investment but the neutrality, prevailing wage, and apprenticeships are being determined by the implementation policies of multiple federal departments. It is important to continue to press for the highest standards we can get from not only DOE but EPA, Commerce, etc., to be a high priority.

Heartland Testimonials

Joe Enright (left), GCM Grosvenor, highlighted the quality of students they've had from the Fellowship program. The students are very impressive and the experience has been phenomenal.

David Shapiro (left, below), KPS, noted that the Fellowship provided the first intern for KPS, and now the firm has a great internship system. He said he learned alongside the Fellows hoped he was able to share his experience and help shape futures. He was impressed by the attitudes and approach of the students who were smart and eager to learn.

They received a crash course in private equity, financing business, thinking about people, and the responsibility of running manufacturing businesses globally. Feedback after the fellows left has been positive and KPS is open to ideas on how to better help the students moving forward.

Sarah Bernstein thanked Heartland for a fantastic experience with the Fellowship over the years. She's had excellent fellows who are interested in the projects across asset owner clients (DEI and climate) mainly. Some have continued as PT with Meketa. They will be looking for people in the future, making an alumni job placement program beneficial. Sarah also mentioned the "Private Equity Women Investor Network/Girls Who Invest" active internship program as a potential partner/connection.

Jonathan McKetney from ULLICO has worked with the LCS Fellows for six years with the real estate investment group. The students primarily learn how to get market rate returns while providing good union wages through construction lending jobs. The Fellows have been very successful in working with financial statements. Ed Smith mentioned Ullico would like to place a Fellow with infrastructure fund in Chicago down the road and would love to do more.

Susanna A. Mendoza

Illinois Comptroller

I can tell you that being a trustee on a pension fund is a huge responsibility that unfortunately comes with very little to no training. And we're talking even basic training.

Many trustees who get appointed to the pension fund boards are there because of a legal requirement, not because they have financial backgrounds. They might be representing the judges, or a clerk’s office, or a constitutional office, and the statute requires they serve on the pension fund. Point is, there needs to be a greater focus on training because once these appointments happen, these trustees have a fiduciary responsibility to make smart investment decisions, yet they lack even a basic understanding of responsible investment principles.

I am so thankful to Heartland Capital Strategies, because they understand how frustrating it is for trustees to have to make decisions on how we’re investing working people’s hard-earned capital, without access to comprehensive training, and they’re doing something about it.

I don’t know if you’ve all read Tom’s book (or books, because he has many). But the "Responsible Investor Handbook - Mobilizing Worker’s Capital for a Sustainable World - is a must read.

This should be required reading for any new trustee. It boggles my mind that there isn’t a greater emphasis on trustee training in every state, because workers’ capital is at stake.

Recognizing the long-term value and risks posed by ESG factors and creating a framework that prioritizes long-term value creation is an important concept for trustees to embrace. But it doesn’t happen without quality training.

I’m thankful to have had the opportunity to be exposed to training at the hands of Heartland Capital Strategies, so that I can be a greater advocate for smart investment strategies that honor, respect, and produce great returns for our hard working men and women's capital contributions.

I wholeheartedly support ULLICO and Heartland’s capital stewardship training efforts and encourage trustees across this country to better educate themselves through access to these important resources.