Regenerative Finance

By Michael Kramer

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.

Esalen central garden 300dpi 2 6x2in

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.

In permaculture we note that all human tools and resources can be either degenerative (toxic or requiring continual inputs), generative (some harmful impacts but benefits outweigh costs), or regenerative (like nature, self-regulatory and waste-free). As such, I coined the term “regenerative investing” in 2003 as a way to highlight projects that demonstrate ecological efficiency and harmony, in keeping with permaculture design principles such as “work with nature”, “increase cyclic opportunity,” and “stacking functions,” to name a few.

Some endeavors can reflect these principles easily, including investments in sustainable agriculture and agroforestry, like community-supported farms or properly stewarded hardwood forest operations, and energy efficiency retrofitting and weatherization programs. There is growing interest in local enterprise development as a response to peak oil and the globalization of commerce, with some communities looking to become producers rather than importers of their basic food, shelter, and energy needs. The new book, Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered, by Woody Tasch, founder of the Investor’s Circle network of accredited SRI private equity investors, focuses on how to support localized food systems as championed by Carlo Petrini of the international Slow Food movement.

There are many initiatives that are taking a permacultural perspective in response to the stresses of our time, including economic inequality and the contribution of long-distance transportation to climate change. Each of these focuses on nurturing local economies, and the spectrum of approaches is nothing less than inspiring. The Transition Towns movement aims to create self-reliant communities through grassroots planning and small-scale enterprises. Recently a financial permaculture course was held in Hohenwald, Tennessee in an effort to develop such a plan and explore business planning through a permaculture lens for that bioregion. The Business Alliance for Local Living Economies (BALLE) has chapters throughout the US and is a primary advocate for local production and purchasing to grow economies from the inside out rather than, say, shop at corporate chains, online, or luring businesses into a community to create jobs. The Humanity Unites Brilliance network pools the resources of its members to facilitate humanitarian and sustainable projects around the world, while Kiva and Microplace facilitate loans to small entrepreneurs in developing nations.

While financing people and projects in other communities across the planet makes a significant difference in people’s lives, a key benefit of community self-reliance is establishing in-

creased opportunities for trade to circulate locally as much as possible. This multiplier effect keeps wealth in the community longer before it leaks away, giving people more control over their economy, as well as maximizing the local impact of economic activity. Aiming to create these multiplier effects are projects such as local exchange trading systems that formalize barter or organize alternative parallel currencies, local carbon offset initiatives to sequester carbon in trees or build renewable energy infrastructure, and intermediaries like the Permaculture Credit Union and other community development loan funds and credit unions that loan money for social and environmental initiatives.

With the B Corporations that operate for the benefit of employees, communities, and the environment in addition to owners and shareholders, we see the reinvention of the business charter and perhaps an eventual IRS designation. With social venture funds and networks, we can support new social enterprises in cutting-edge fields such as biofuels, recycled products, natural fibers, and biotech. And we can help any business, regardless of size or type, to become a triple bottom line operation. Recently I facilitated a meeting of green business consultants in my county to try to foster collaboration that can expand the adoption of green business practices and create more buzz about their work. Similarly, I created the Kuleana Green Business Program through the Kona-Kohala Chamber of Commerce three years ago to recognize businesses already operating with a triple bottom line approach, and am now in negotiations to expand it statewide.

Ultimately, the creation of regenerative enterprises within the context of healthy communities and environments will take time. Many long-standing practices and products will need to be replaced, and as permaculture, biomimicry, the Natural Step, and other disciplines continue to provide new design solutions, we have the potential to manifest a greater degree of community self-reliance through regenerative economic development. While every community can’t provide for all its needs—meaning we need corporations to make solar panels and other important products— it is encouraging to see more attention devoted to community-based economic solutions. Through local provision of basic survival needs, community empowerment to address racial and economic disparities, and ethical corporate policies and practices, we are gradually designing a regenerative society within ecosystems that can nurture us for many generations.

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