Regenerative & Impact Investing
As individuals and as a company, we at Natural Investments have consistently found ourselves at the leading edges of creating the change we want to see in the world.
In our communities, we tend to work with innovative collaborators whose experiments in architecture, agriculture, and community planning are often ahead of the curve.
So it’s no surprise that we also find ourselves looking beyond the readily-available investment vehicles as we work to push our economic system toward more constructive expressions. As great as it can be to invest in an alternative-energy mutual fund, or support a community development loan fund with a low-interest loan, we want to do more. We call this relatively uncharted realm “Regenerative Investing”.
Regenerative Investing offers clients who can afford to take on some added risk the chance to invest in truly innovative projects that aim to be economically viable models of sustainable society.
Imagine: An investment that converts conventional farmland to organic – building soil, sequestering carbon, combating climate change – while guaranteeing young farmers long-term access to prime farmland and creating local, healthy jobs.
We call this new investment class “regenerative” because it channels financial resources into projects that mimic the way natural systems cycle matter and energy to create more life. Investing in human activities that minimize the use of fossil fuel and toxic chemicals while providing opportunities for natural systems to remain healthy or to be restored around them, is a way to assure that future generations will share in the bounty we are called on to steward.
This requires making far-sighted investments in areas such as clean energy, sustainable agriculture and forestry, recycling, and green real estate development. It may involve new investment vehicles which don’t yet exist: sustainable planning, brownfield redevelopment, or watershed restoration bonds; and growing systems that revitalize soil health organically and bring people back into relationship with their food supply, including urban food, tropical agroforestry, fuel crop, and community-supported farms.
One key to building a regenerative social model is moving more resources into local ownership, which builds community wealth from the inside and circulates resources. Worker-owned cooperatives, small business incubators, and urban land trusts all contribute to a more regenerative local economy by creating more producers than consumers.
One of the most important questions socially responsible investors ask is, “What impact does my dollar have?” At Natural Investments, over $400M of clients’ assets were placed in socially responsible, sustainable, and impact investments in 2017.
$385M in assets are in stocks, bonds, and mutual funds with environmental, social, and governance (ESG) criteria, in which a variety of avoidance and affirmative screens filter the investments to steer clear of the practices and sectors you don’t believe in, put pressure on companies to change their behavior and support companies and projects that lead to a more just and sustainable society.
We know that you strongly believe in strengthening local economies. Over $70M is invested in community development products, including municipal bonds and community development notes that support affordable housing, schools, healthcare clinics, assisted living centers, small businesses, and appropriate infrastructure that strengthens communities and protects ecosystems.
Finally, because you wish to support resilience and evolve the economic system through innovation, $30M of assets supports high-impact private investments in such areas as regenerative farmland, economic development of indigenous communities, water restoration projects and clean energy.
Our goal is to create a market among investors for funds that combine these sorts of services in ways that reduce individual risk while increasing the social and ecological rewards.
Since 2004, we have been articulating the need for this new category of investment beyond stocks, bonds, and community banks and credit unions. Regenerative & Impact Investing can help create a more just and sustainable society and planet through supporting proactive on-the-ground projects.
Just as Community Investing has moved into the SRI mainstream, we are working with our peers to develop innovative vehicles through which average investors can support Regenerative & Impact Investing. We believe that this is a key corollary to corporate and community investing, and we look forward to the day when these types of investments are readily available to the average investor.
In the meantime, qualified and accredited investors can seek out private equity and venture capital opportunities that offer outstanding social return by supporting some of the most forward-looking experiments in development and agriculture.
Many opportunities exist for accredited investors to help innovative enterprises get off the ground or expand. These investments focus primarily on the sectors of the green economy as well as companies that have a triple- or quadruple-bottom-line operational commitment to environmental, social, cultural, and financial performance. Such investments — individual companies or venture capital or private equity funds — can support low-income owners and communities here or abroad and facilitate the transition to sustainable or resilient lifestyles and technologies. Private investments that help people and are environmentally sensitive or regenerative offer a different risk profile than publicly traded securities and can provide a more hands-on relationship to what you own.
At Natural Investments, we continue to seek out and research these innovative investment opportunities, which are creating the change we all wish to see in the world.