Making a difference: Thierry Lombard

Thierry Lombard, president of Fondation Philanthropia, shares his thoughts on giving and how impact investment could be a force for change

Thierry Lombard represents the sixth generation at the head of one of Switzerland’s best-known banking names, Lombard Odier. He is president of Fondation Philanthropia, an umbrella foundation that supports private donors in long-term philanthropy, chair of Fondation Lombard Odier, the bank’s own philanthropic arm, and a member of the Assembly of the International Committee of the Red Cross (ICRC). Here, he shares his thoughts on giving, the next generation of philanthropists, and how impact investment could be a force for change.

Lombard Odier oversees not only its own philanthropic interests, but also those of private donors through its Fondation Philanthropia. How would you describe your philosophy for giving?

My philosophy goes back to one rule that my grandfather had, which is that you should divide your time between three domains: family, community and work. That is it, in a nutshell: all three are important for creating a better life. For me, I have learned that it is not just about giving money, but also about creating connections and starting dialogue, to help those on the ground be as efficient as they can be. It is also important to shape new ideas and projects. You are able to take risks as an individual that you rarely can as an institution.

We have a saying in French, that the shoemaker should first make good shoes for himself, before selling to others. We have tried, as a bank, over the last 200 years to be good citizens, to prove we could do as well as possible ourselves, before moving to give advice to others.

Q You launched Fondation Philanthropia in 2008, at the peak of the global financial crisis. Did the downturn encourage more clients to consider investing in impact-based philanthropy?

I think the global community is at a crossroads. There is a transition between generations today, and there is a failure, in a way, of public capacity to solve problems. I always cite the Al Gore documentary about climate change, ‘An Inconvenient Truth’, as an example. Though many countries failed to sign up for a more sustainable world, many cities did. We see, increasingly, it is not governments leading the way, but individuals, companies and cities. Problems too big to be solved by countries are being solved by public-private dialogue, by top-down, bottom-up approaches.

Responsibilities are everywhere. We all have an obligation to answer, and a role to playQ Do you feel the next generation of philanthropists has a different approach to giving, because of that?

There are many things you don’t have to teach the young generation. It is embedded in the way they think and act. They believe that we, the global community, are approaching the wall in many aspects and they want to have a different, and potentially better world for themselves and their children. But it is also harder for them: harder to find a job, harder to see the future. Today, there are more questions and more concerns.

In terms of how they use their wealth, there are as many examples of people choosing to deploy it during their lifetimes, as there are of those choosing to leave a legacy. I think the origin of wealth has an impact. When you inherit something, you may have more intention to try to pass it on to the next generation. The Rockefellers of this world have foundations. When you create your own wealth – the Bill Gates’ of this world – you may feel more able to own and deploy it.

Q What are your thoughts on the rise of social impact investing, and particularly the shift among financial houses such as Goldman Sachs towards this as a tool for social change?

I’m quite critical on this, in the sense that I believe the financial and banking world has lived for too long in rosy circumstances. The purpose of capital is to do something useful. It is not to make bankers rich; it is not to make traders rich. Unfortunately, I fear the industry has perhaps lost its vision in terms of why it is here, and the purpose of capital. If you were to take 1970 as a proxy, the average remuneration for businesses, for banking and for trade, was roughly about one-to-one. In 2006, the average remuneration for banking was 4.3 more than that in other industries. What does banking bring to the world in order to warrant that?

I think impact investing, for me, is a way for the industry to try to reinvent itself. How can we try to redeploy capital for a vision and purpose? How can we utilise capital for the betterment of the world, whether environmental, social, humanitarian or economic? Are we there yet? No. Neither in skill, nor in the structure of impact investment, or in understanding. It is going to be a long-term process, and there will be failures along the way. But the goal should be to readdress why capital is there, what it can do, and how it can do good for the future.

Q You’re a long-standing supporter of the ICRC. How important are ties with corporates to the success of the aid sector?

I first met the chairman of the ICRC on a flight between Geneva and Basel. He told me that, at the time, Switzerland as a whole was giving roughly CHF300,000 (about $311,634) in private donations a year to the ICRC. Which I thought was neither right, nor enough. My thought was that we, corporate Switzerland, should not necessarily bring just money to the ICRC, but examine how we could be useful for its operations around the world. Pharmaceutical firms, such as Hoffman La Roche and Novartis, could give drugs, for example. Swiss Re and Zurich Insurance could offer technical expertise in risk assessment.

In response, we created a corporate support group with large Swiss companies, to engage not only in financial support, but dialogue and expertise sharing. It’s been a very interesting dialogue: how we engage with the ICRC’s actors on the ground, to develop innovation and promote effectiveness in the ICRC and the wider humanitarian world.

I think we have to realise that responsibilities are everywhere – within the private sector and the public sector, within companies, within families and within individuals. We all have an obligation to answer, and a role to play.