Get Your Dollars Dirty with Regenerative Investing
Sometimes we just want to roll up our sleeves and get our hands dirty. Or at least invest in people who are! Some of the most forward-looking innovations in what we call “evolutionary investing” are taking place in very down-to-earth ways, working with “tangible assets” as familiar as life itself: trees, livestock, soil, and grass. Re-envisioning our relationship with nature and the flow of materials and energy, activities in this area are creating innovative on-the-ground (and in-the-ground!) solutions and opportunities. Interdependency, holism, reciprocity, and restoration are informing a redesign of human systems, reconfigured to foster cyclical processes and regeneration, as well as the primal generative powers of life itself. This is a radical return to the foundation of all wealth.Without fresh water, breathable air, and healthy soil, the financial economy has nothing to stand on. No food, no finance!
Let’s take a look at some of the most exciting of these adventures in regenerative investing.
Digging into Regenerative Agriculture
Regenerative agriculture is a concept so obvious that it’s shocking we’ve hade to “rediscover” it in the modern age! In addition to enhancing living systems, part of the aim of regenerative agriculture is to align with the amazing fecundity of nature and build a human system around this abundance that benefits people and planet, while also turning a profit (even farmers have to make a living!). As Slow Money author Woody Tasch describes it, “we can bring money back down to earth.” A few regenerative agriculture champions:
- sustainable woodlots and forestry, such as the Menominee Tribal Forest in Minnesota, foster a diversity of species, ages, and functions, and yields a beautiful and functional forest ecosystem for the long term;
- community-level food forests grow fruits, nuts and other supporting plants, right in town; see the Beacon Food Forest in Seattle that grows fruits, nuts and other supporting plants, right in town
- aquaponics systems allow plants and fish to grow together synergistically, the best of hydroponics and aquaculture; the Urban Farm in Milwaukee is an excellent example
- planned grazing systems, with domestic animals mimicking wild herds, regenerating grasslands as a result: Green Pastures Farm in Missouri is one of many examples
The compounding good effects of projects like these include improved water cycles, enhanced wildlife populations, and significant reductions in carbon emissions.
Beyond agriculture, many other innovations are also tapping into the regenerative (and generative) power of nature. “Conservation finance” is an emerging field that aims to finance habitat conservation, sustainable forestry, and clean water. Addressing our greatest planetary challenge, the Virgin Earth Challenge, created by Sir Richard Branson, offers $25 million dollars to any organization that can demonstrate a sustainable and economically viable means of removing greenhouses gases from the atmosphere. Allan Savory’s Holistic Management is one of the eleven finalists, as are three companies developing biochar, an ancient Amazonian technique that stores carbon while increasing soil fertility.
Biomimicry and the Circular Economy
Regenerative investing aspires to create well-integrated human systems as a synergistic force for good.As Katherine Collins at Honeybee Capital says:
Nature already provides us with a blueprint for regenerative, resilient systems, and biomimicry urges us to look to nature as mentor, model, measure, and muse. Asking, “What Would Nature Do?” can be the first step towards decisions and designs that are optimized instead of maximized, generative instead of extractive, mindful instead of mechanical.
The origins of these evolutions date back many years, often decades, and are slowly being recognized and adopted in the investment world. At the heart of these types of investments is a shift from an extractive, linear mode of relationship with the natural world to a circular form of reinvestment—building cyclical and (re)generative relationships. A key principle is that there is no waste in nature; everything is food for somebody. Each step in a process, looked at carefully, can generate a new yield, a new business opportunity. William McDonough sees red and wriggling vermiculturists (worms to the lay audience) creating soil fertility, and adapts this insight into his cradle-to-cradle approach to the “technical nutrients” of industrial design; already, you can send some products back to the manufacturer for complete recycling at the end of their useful life.
While much of the activity in this realm isn’t widely available for direct investment, that will change before long. In the meantime, find regional projects to get involved in, support companies on the forefront of cradle-to-cradle design, and keep your eyes open for chances to get your money dirty while doing some good clean work in the world!
This article first appeared in the Spring 2014 edition of the Natural Investment News, and is an early draft of one of the sections in our forthcoming book, The Resilient Investor.