Reasons for Hope

LIFE IS WHAT WE FOCUS ON. This has long been a meaningful mantra for me. My adoption of it stems from a time when my obsession with bad news caused me distress. Bad news is everywhere, and modern humans are more aware of the problems of the world than any other time in history. The state of the human condition and the planet can be known by pressing a few buttons on our devices. It is an overwhelming quantity of information, and we now face the additional responsibility of discerning its veracity.

Having factual information about our challenges, however, matters only if it motivates us to address them. And while we can’t solve all problems, here at Natural Investments, trying to point humanity in a better direction has been our raison d’etre since our inception in 1985. Changing capitalism to be more just and regenerative is a long-term process that requires both persistence and patience. It does feel overwhelming at times, considering the gravity of the issues at hand and the impact of misinformation, racism, sexism, classism and nationalism on society.

Considering the lack of cohesion to operate cooperatively toward creating equity and equality, diminishing the impacts of climate change, ceasing exploitive tendencies and fostering peace among races and nations, the pace of change may appear disturbingly incremental. However, there are positive shifts occurring that give us hope. The rifts that separate us can be healed, and the expansion of human consciousness is occurring as we see more ally-building efforts and more investors, companies, municipalities and nations embracing sustainability, justice and more conscientious ways to live, work, invest and participate in shaping meaningful directions for our communities:

  1. There are now more than $40 trillion in sustainable, responsible and impact investments. Definitions of what’s included in this amount vary, but nevertheless it represents one in three professionally managed investment dollars. Green, social and sustainability-oriented bonds and loans totaled $1.6 trillion in 2021, the largest annual amount in history.
  2. Money held in sustainable mutual funds and environmental, social and governance (ESG)-focused exchange-traded funds rose globally by 53% last year to $2.7 trillion, with a net $596 billion flowing into the approach.
  3. The Securities and Exchange Commission and the Department of Labor are once again siding with the interests of investors, issuing guidance and rules that endorse the use of responsible investments and push investment products to disclose risks associated with climate change.
  4. Interest in racial equity and justice is high, as billions of philanthropic and investment dollars increased for entrepreneurs and communities of color in 2021. In addition, our racial equity journey as a firm continued last year, as we completed a racial equity audit conducted by Every Level Leadership. We have been implementing numerous recommendations to create a more transparent and inclusive governance process that will help build an internal culture that is consistent with our racial equity values.

The compassion fatigue that accompanies the desire for humanity to be different is real. What continues to be true is that as more people focus on being the change, and promoting positive change, the more it occurs. Change can seem slow and messy but focusing on our evolution gives hope and meaning to our lives. Both you as investors, and we as investment advisors, are doing our part to be the change, and it is making a difference. This report tells some of that story. We hope you enjoy it. 2021 Social Impact Report – Natural Investments

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Michael Kramer

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