The importance of investing

By Hal Brill

Back in 1989, I drove my VW bus to a dude ranch in Colorado to check out a conference about something called SRI – socially responsible investing. The premise was enticing – we could help people invest for their future while putting capital to work for a better world. Nothing could be clearer to this small band of visionaries. And nothing could be as daunting as trying to take on the all-powerful financial establishment.

CloudsBy some measures, SRI (now known as “sustainable and responsible investing”) has been a rousing success. Predictably, it was ignored by much of Wall Street, and attacked by others. Nonetheless, an entire industry of funds, advisors and researchers grew year-by-year. Early SRI investors were rewarded with competitive financial returns, so their ranks swelled beyond the true believers. Every major financial firm began catering to SRI investors, and the movement spread around the globe.

Then in 2008, a financial tsunami nearly took down the entire global system. This served as a giant wake-up call to Americans who saw their tax money used to rescue the gamblers and con artists deemed “too big to fail”. Arianna Huffington started a grass roots campaign called “Move Your Money.” The idea was simple: take your money out of the big banks and move it to local community credit unions and banks. It worked! By 2010, a Zogby poll found that nine percent of Americans had made the move, fueling strong growth of local financial institutions.

This is exciting stuff. From humble beginnings, millions of people now embrace the notion that their money can and must be directed with eyes wide open. Whether it is a $100 savings account, or an institutional-sized endowment fund, investors realize they can choose to manage their money in ways that reflect their values. It takes courage to stand up to powerful Wall Street interests. We are enormously grateful to all those who have heard the call. It feels a lot less lonely than it did back in 1989!

Investing in the Change We Want to See

The next phase of investing as a force for change will dwarf these fledgling efforts. We don’t know what it will be called, but we do know that Huffington’s elegant phrase describes what needs to happen: more people need to move more money!

To make the next leap, we need to do better than Wall Street: financially, ecologically, and socially! Once again, we find ourselves among colleagues who are pioneering new strategies that are actively tuned to address these times. This time we face an entirely different milieu:

  • Wall Street isn’t working. Since 2000, the U.S. stock market has provided scant returns for investors, earning the name “the lost decade” (and counting).
  • The economy isn’t working. High unemployment, underemployment and downward mobility are painful realities of the U.S. job market. Falling home prices and foreclosures are devastating to families and communities. Income disparities are increasingly leaving too much of our national wealth sitting relatively stagnant in the hands of those who have more than they can use.
  • The planet isn’t working. Climate chaos around the world is rising. Numerous indicators, such as resource depletion, pandemics and withering poverty, are well into the danger zone.
  • Government isn’t working. Partisanship and big-money influence is preventing government from tackling serious challenges to our economy and environment.

If you take one thing to ponder from this article, think about this: all of these crises stem from the fact that the thin slice of humanity that has the resources to invest in the future is investing in a world that nobody wants to live in.

Let’s break this down a bit. ‘The thin slice of humanity that has the resources to invest in the future…’ refers to the fact that globally, many people operate at a survival level of existence, so they are not players in the capital markets. The majority of investment capital is controlled by relatively few investors.

‘…Investing in a world that nobody wants to live in’ reflects the sad reality of our continued decimation of both natural and cultural capital around the world, in the pursuit of personal and corporate wealth. The mainstream business world is starkly agnostic about the key questions of our times, particularly the climate crisis and social equity.

To create the world we want – we must invest in it! Investing determines how resources are deployed – it’s the way we create the future. Everything we see and touch in the human world was invested in. Today, the sole criteria used to direct most capital is to seek short-term profits.
Unfortunately, this single metric is a terrible way to run a planet. Profit can be made in ways that are healthy and life enhancing, or by exploiting people and the earth. Wall Street doesn’t differentiate between mountaintop removal profits and solar energy profits.

In these times of compounding and accelerating crises, investing-as-usual will no longer suffice. Investing can be – and is becoming – a tool of human creativity, harnessed to bring about genuine progress. Sustainability is much more than a buzzword – it directs human activity in ways that work with, rather than against, the life support systems of the planet. Once again in synch with the larger rhythms of life around us, humanity will find that the era of limits may well become a time of expanding joy and well being.

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Hal Brill

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