In spite of all today’s economic challenges, this is an exciting time for values-based investors. The range of investments has grown from just a handful of SRI funds when we started in the 80’s to hundreds of values-based options. SRI has become a global movement, corporate responsibility is a mainstream issue, and the opportunity to create a low-carbon economy is the major thrust of the current administration.
But despite these achievements, the challenges have grown even faster. The earth is groaning under the strain of supporting consumption-based lifestyles, while debt-based economies demand even more consumption to keep the whole game going. In an ideal world, we would have a coordinated global approach with sufficient wisdom and clout to address global challenges while keeping local economies vibrant. But Wall Street and a handful of mega-banks are designed to funnel capital into globalization, while the local realm has been almost ignored by the investment world. In response, many people are finding that the local level is the most appropriate place to direct their energies, for it is in our neighborhoods and communities that we can have the most meaningful impact.
So I was elated when I picked up a new book called Slow Money written by Woody Tasch. Just the title gets your attention…who talks about the speed of money? But money has gotten fast, whizzing around the world as blips of data, seeking the highest return no matter what the consequences for the planet. Slowing money down fits right in with “natural” investing – our term for investing in ways that are aligned with the planet’s patterns at a deeper level. In September I attended the first national Slow Money conference in Santa Fe. I felt right at home, as the 400+ attendees were a blend of activists from the financial, farming, and nonprofit worlds.
Tasch’s focus is on local food, also known as the Slow Food movement. We all know the splendid taste of vine- ripened tomatoes and fresh-picked corn.
We will be posting regularly on all topics related to natural investing, socially responsible investing, holistic financial planning, sustainable wealth building and other relevant topics that strike our fancy. Please let us know any topics or questions you might have, and we will do our best to answer them here.
No matter how this economic crisis turns out, it is already assured a very prominent place in our memories. It’s not just the endless parade of scary headlines announcing precipitous market declines, massive government bailouts, skyrocketing unemployment, and high-profile frauds and failures. What really shakes us to our core is the thought, the mere possibility that “The end of the old way of doing things is here. Things will never be the same again.” What if this were true? What then, can we expect in our new, more uncertain future?
Let us start by taking a look at our current situation from a historical perspective. A cursory review of the last few hundred years reveals a virtual cornucopia of financial crises. Just to name a few: the Dutch Tulip mania of the 1600’s, the South Sea Bubble of the 1700’s, the Panics of 1873, 1893 and 1907, the Crash of 1929, the dot-com crash, and finally, our current situation. I highly recommend reading the stories of these panics, because the parallels with today are breathtaking. One cannot help but feel like history is simply repeating itself. Or, more interestingly, we may be seeing that the economy ¬– as one expression of human nature – operates within larger natural patterns that are built of cycles upon cycles: day and night, work and rest, breath, tides. And likewise, the cycles of sickness and health suggest that once having lived through a health crisis, we often find ourselves looking at life anew, and forging new ways to move forward.
So let’s look at some history, ponder the present, and begin to imagine the future that may emerge from this time.
This material first appeared in the Spring 2009 issue of the Natural Investments newsletter
There is a sea change in Washington, and it is interesting timing. The shift to a Democratic executive branch, along with a Democrat-controlled Congress for the first time in 15 years, is facilitating an ambitious set of policies and programs to both revitalize the economy and reprioritize the national agenda. Both the TARP and the American Recovery and Investment Act boosted ideas that have been championed by progressives for many years, and are now being taken seriously as critical aspects of the economic recovery plan. Click through to read about these new federal priorities, including new financing for community-based development institutions, green energy investments, and shareholder oversight of executive pay.
This piece first appeared in the January 2009 edition of the Natural Investing newsletter
Last month marked the closure of an important chapter in my life. For the past 18 years, I’ve been a teacher of permaculture design. Coined by Australians Bill Mollison and David Holmgren in the ‘70s, permaculture is a hybrid word reflecting the notion of forming a permanent culture based on the wisdom and high functionality of natural systems. While most applications of permaculture relate to food, water, shelter, and energy systems, I’ve tended to focus more on the “invisible structures” – economics, politics, organizations, and interpersonal and intrapersonal dynamics.
As some of you know, I taught permaculture courses for many years, served a term as Executive Director of Permaculture Drylands Institute, and more recently facilitated permaculture teacher trainings with NI partner Christopher Peck. Now the successional process is complete, because two of the students we trained to be teachers demonstrated in a week-long workshop in early December at Esalen Institute that they can facilitate this course from now on. It is, in permaculture terms, evidence of natural succession, and I couldn’t be happier to mulch myself. People often say I’m full of, um, compost, but that’s another story…
Natural investing is a permaculture strategy, since its purpose is to care for people and the planet while demonstrating economic viability. Certainly the triple bottom line found among today’s socially responsible businesses is fully aligned with permaculture’s ethics, so I haven’t strayed from my core purpose in focusing more on finance. The aspects of this field that are most relevant to permaculture are community and regenerative investments that empower people and facilitate a harmonious business relationship with the environment.
Business for Social Responsibility (BSR), which has been providing socially responsible business solutions to 250 of the world’s leading corporations since 1992, recently published an insightful report, “Environmental, Social, and Governance: Moving to Mainstream Investing?” The report is unique, as it is largely based on the views of more mainstream financial institutions rather than the usual SRI suspects. Wells Fargo, Goldman Sachs, and Standard & Poor’s joined Al Gore’s firm, Generation Investment Management, two academic scholars, and two SRI researchers to create the report, designed to help mainstream financial advisors to incorporate environmental, social, and governance (ESG) factors into their analyses.
The report notes that “Although many studies show a positive association between investors’ use of ESG criteria and enhanced financial performance, the data is still inconclusive, and mainstream investors remain skeptical.” It identifies key barriers to the more widespread use of ESG criteria by companies and investors and suggests possible solutions for breaking down the barriers.
The first barrier to wider integration of ESG factors is inherent in the recent emergence of ESG considerations: the lack of information on the long-term effects of ESG on the financial returns of companies. One start in this direction is Goldman-Sachs’ “GS Sustain Focus List,” which evaluates how well companies integrate ESG criteria into their businesses; tellingly, the companies that meet their criteria have outperformed the world stock index MSCI by 25 percent since August 2005.