Category: August 2014 – The Resilient Investor: Your Life and Your Money

Sustainalytics ESG Research Now Available on Bloomberg Professional Service

 
Recently, Sustainalytics announced that its environmental, social and governance (ESG) research assessments are now available to the more than 320,000 subscribers of the Bloomberg Professional service. As a third-party ESG research provider, Sustainalytics will offer clients that subscribe to both platforms access to a subset of Sustainalytics’ ESG ratings and coverage.

“The inclusion of ESG information on platforms such as Bloomberg is yet another positive indication of the mainstreaming of sustainability in capital markets,” said Michael Jantzi, CEO of Sustainalytics. “Having corporate ESG performance data housed alongside more traditional financial information allows investors to more easily integrate ESG factors into their fundamental analysis.”

Through the Bloomberg Professional service, users can deliver Sustainalytics’ assessments, alongside market data and other third-party and company reported ESG data, into a Microsoft Office document to fuel proprietary ESG models, research and reports.

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Sustainalytics’ proprietary indicators will provide investors with a macro level assessment of how companies are managing their ESG capital. All Bloomberg users will have access to high-level company scores and percentile rankings across the environmental, social and governance dimensions. Clients that subscribe to both platforms will have access to more in-depth assessments of approximately 1,600 global, developed market companies, ranked against their industry peers across 15 performance indicators, including:

Thematic and overall Environmental, Social and Governance scores, Momentum indicators, which reflect ESG trends scores over time, Controversy assessments, identifying high-profile environmental, social or governance incidents involving the company, Preparedness, Disclosure, and Performance assessments which offer investors insights into a company’s ESG management and risk exposure, Product involvement indicators highlighting company exposure to a list of 11 product lines, such as tobacco, nuclear power generation or military contracting.

To improve analysis and better identify trends over time, historical scores dating back to 2009 will also be made available in the coming months.

“We have seen the number of customers using ESG data increase at an annual rate of 48%, which means that there is a growing demand for this type of information,” said Curtis Ravenel, Global Head, Sustainability Initiatives at Bloomberg. “It is becoming a critical element in the decision making process of investors and more specifically our customers and the collaboration with Sustainalytics will enhance our offering on the Bloomberg Professional service.”

For more information about accessing Sustainalytics ESG research data via your Bloomberg Professional Services account, Sustainalytics and Bloomberg users should contact their account managers.

About Sustainalytics

Sustainalytics is an independent ESG research and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. The firm partners with institutional investors who integrate environmental, social and governance information and assessments into their investment decisions.

Headquartered in Amsterdam, Sustainalytics has offices in Boston, Bucharest, Frankfurt, London, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels, Copenhagen, New York City and San Francisco. The firm has 160 staff members, including more than 100 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries. In 2012 and 2013, Sustainalytics was voted best independent sustainable and responsible investment research firm in the Thomson Reuters Extel’s IRRI survey. www.sustainalytics.com

About Bloomberg

Bloomberg, the global business and financial information and news leader, gives influential decision makers a critical edge by connecting them to a dynamic network of information, people and ideas. The company’s strength – delivering data, news and analytics through innovative technology, quickly and accurately – is at the core of the Bloomberg Professional service, which provides real time financial information to more than 320,000 subscribers globally. Headquartered in New York, Bloomberg employs more than 15,500 people in 192 locations around the world.

Bloomberg’s environmental, social and governance (ESG) news, data and research are a fully integrated feature of the Bloomberg Professional service. Data for over 10,000 companies, ranging from emissions and energy consumption to accident rates and board independence, is displayed in the same screen as the fundamental data that investors, analysts and corporate executives use every day. ESG data is compatible with all of Bloomberg’s cutting edge analytics to better compare companies on ESG metrics. www.bloomberg.com

For more information please contact:

Melissa Chase, Marketing Specialist, Sustainalytics
melissa.chase@sustainalytics.com

Source: Sustainalytics

Millennials Favour Impact Investing and Real Assets

by Michael Finnigan, CampdenFB

 

The number of millennials that own or employ socially responsible investments is significantly higher than in any other age group, according to a study that explores family dynamics in wealthy families.

US Trusts’ Insights on Wealth and Worth 2014 found that 63% of millennials, those born between 1980 and 2000, own or are interested in socially responsible investments compared with 40% of Generation X.

Generation X is defined as people born between 1960 and 1980.

The reason for the younger generation’s generosity is a forthcoming wealth transfer and shift in mentalities, according to Michael Sidgmore, founder of NextGenEngage, an organization that connects next generation investors and educates them on impact investing.

“Over the next two decades there is a pending $41 trillion (€30 trillion) wealth transfer that has got millennials thinking about the future,” he said.

“Unlike the other generations, millennials do not consider philanthropy and investment mutually exclusive, which you can see in the rise of crowd funding sites and peer-to-peer networks.”

Traditionally, impact investment is not considered profit spinning but the survey shows that opinions are changing. Six out of ten (60%) respondents agreed that it is possible to invest achieving market rate returns through impact investment.

“The younger generation doesn’t necessarily view impact investing as having a better financial return than traditional financial instruments,” Sidgmore said, “but in some cases they are more likely to sacrifice financial return for social return.

Impact investment is a continuum, according to Sidgmore, that moves all the way from pure philanthropy, where you get 100% social return and 0% financial return, to financial first returns where you get market rate returns but with measurable social impact.

The study also found 81% millennials either own or are interested in owning tangible assets such as land, real estate and timber, and are more interested than any other age group in using private equity and hedging strategies.

Sidgmore said that the interest in tangible assets stems from the 2008 credit crisis that saw the collapse of complex financial instruments that were structured and sold to investors that probably didn’t understand the underlying assets.

“Millennials want trust, but they need to know what something is and therefore they need transparency. Financial markets are very opaque. If it isn’t transparent they are going to shy away,” he said.

Sidgmore said this is why there has been an increase in peer-to-peer lending sites like Zopa and Lending Club that allow investors to see the person on the other side of the trade.

The US Trust report surveyed 680 US high net worth individuals with at least $3 million in investable assets.

Article by Michael Finnigan, staff writer for CampdenFB and CampdenFO.

Source: campdenfb.com

A Choice of Tomorrows

America’s age of empire is coming to an end. The question that matters now is what will follow it

 

Article by John Michael Greer, author of Decline and Fall: The End of Empire and the Future of Democracy in 21st Century America.

One of the perplexities about the contemporary crisis of American politics is that next to nobody wants to talk about its mainspring: the end of an era of American global empire. It’s considered impolite these days even to mention that America has an empire, and Heaven help you if you suggest that there’s a connection between the military garrisons we keep in more than 140 countries around the world and the fact that the five per cent of humanity that can apply for a US passport got to use, until very recently, around a quarter of the world’s energy and around a third of its raw materials and manufactured products.

Still, that connection has to be discussed. During the era that began with the Second World War and is ending now, Americans benefited hugely from systematic imbalances in the patterns of global exchange, which concentrated wealth here at the expense of the rest of the world. That’s how empires work. Not much more than a century ago, in the waning years of the nineteenth century, that was common knowledge.  In the fierce debates of that era over whether the United States would get into the empire business, the core of the pro-empire case was that countries with empires got rich from them. It’s only in our present mealy-mouthed era that such straightforward talk has dropped out of common currency.

Yet it’s impossible to talk meaningfully about the rising spiral of crises afflicting the United States without addressing the end of the imperial “wealth pump” that once propped up the American economy. The disintegration of our built infrastructure and the steady decline in most Americans’ standards of living are among the results. Fifty years ago, it’s worth recalling, many American families with one full-time working class income owned their own homes and lived relatively comfortable lives. Nowadays? In many parts of the country, one full-time working class income won’t keep a family off the street.

The United States is still a prosperous country on paper, because the notional wealth churned out by government and the financial industry still finds buyers willing to gamble that business as usual will continue for a while longer. Many people are wondering these days when the resulting bubble in paper wealth is going to pop. That might happen, but it’s also possible that all of that paper wealth could trickle away more gradually, by way of stagflation or some other mode of prolonged economic dysfunction. We could get the kind of massive crisis that throws millions of people out of work and erases trillions of dollars of paper wealth in a matter of months; we could equally well get the more lengthy and less visible kind of crisis, in which every year that passes sees more of the population out of the work force, more of the nation’s wealth reduced to paper that would be worth plenty if only anybody were willing to buy it, and more of the United States turning into one more impoverished and misgoverned Third World nation.

Either way, the economic unraveling is bound to end in political crisis. Take a culture that assumes an endlessly rising curve of prosperity, and slam that assumption face first into the reality of economic contraction, and you’re guaranteed trouble. As the American dream sinks into an American nightmare of poverty, disintegrating infrastructure, and hopelessness, presided over by a dysfunctional bureaucratic state that prattles about freedom while loudly insisting on its alleged right to commit war crimes against its own citizens, scenes like the ones witnessed in the Eastern Bloc in the late 20th century are by no means unthinkable here.

Whether or not the final crisis takes that particular form or some other, it’s a safe bet that it will mark the end of what, for the last sixty years or so, has counted as business as usual here in the United States. That’s a recurring pattern in our history. Three previous versions of the United States—call them Colonial America, Federal America, and Gilded Age America—followed the same trajectory toward a crisis all too familiar from today’s perspective.  Gridlock, political failure, and a collapse of legitimacy that in two cases out of three had to be reestablished the hard way, on the battlefield: we’re most of the way there this time around, too, as Imperial America follows its predecessors toward the recycle bin of history.

This fourth pass around the same track may be more challenging than those that preceded it. The crises that ended Colonial America, Federal America, and Gilded Age America all came to an end in part because a particular vision of America was fatally out of step with the times, and had to be replaced. In two of the three cases, there was another vision already in waiting: in 1776, a vision of an independent republic embodying the ideals of the Enlightenment; in 1933, a vision of a powerful central government using abundant resources to dominate the world while, back at home, distributing the promises of social democracy to its people.

In the third, in 1860, there were not one but two competing visions in waiting: one supported by the states north of the Mason-Dixon line, and one supported by those south of it. What made the conflicts that led up to Fort Sumter so intractable was precisely that it wasn’t simply a matter of replacing a failed ideal, but deciding which of two new ideals would take its place. Would the United States become an aristocratic, agrarian society integrated with the 19th century’s global economy and culture, like the nations of Latin America, or would it go its own way, isolating itself economically from Europe to protect its emerging industrial sector and rejecting the trappings of European aristocratic culture? The competing appeal of the two visions was such that it took four years of war to determine that one of them would triumph.

Our situation in the twilight years of Imperial America is different still, because a vision that might replace the imperial foreign policy and domestic social democracy of 1933 has yet to take shape. The image of America welded into place by Franklin Roosevelt during the Great Depression and the Second World War still guides both major parties: the Republicans have proven themselves as quick to use federal funds to pursue social agendas as any Democrat, while the Democrats have proven themselves as eager to throw America’s military might around the globe as any Republican.

Both sides of the vision of Imperial America depended on access to the extravagant wealth that America could get in 1933, partly from its already substantial economic empire in Latin America, partly from the Appalachia’s coal mines and the oilfields of Pennsylvania and Texas. Both those empires are going away now, and everything that depends on them is going away with equal inevitability. Yet next to nobody in American public life has begun to grapple with the realities of a post-imperial and post-industrial America, in which debates over the distribution of wealth and the extension of national power overseas will have to give way to debates over the distribution of poverty and the retreat of national power to the borders of the United States, and to those few responsibilities the constitution assigns to the federal government.

We don’t yet have the vision that could guide that process. I sometimes think that such a vision began to emerge in the aftermath of the social convulsions of the 1960s. During the decade of the 1970s, following the impact of the energy crisis, the blatant failure of the previous decade’s imperial agendas in Vietnam and elsewhere, and the act of collective memory that surrounded the nation’s bicentennial, it became possible to talk publicly about the values of simplicity and self-sufficiency, the strengths of local tradition and memory, and the worthwhile things that were lost in the course of America’s headlong rush to empire.

This nascent vision helped guide the first promising steps toward technologies and lifestyles that could have bridged the gap between the age of cheap abundant energy and a sustainable future of relative comfort and prosperity. Still, that’s not what happened; the hopes of those years were stomped to a bloody pulp by the Reagan counterrevolution, Imperial America returned with a vengeance, and stealing from the future became the centerpiece of a bipartisan consensus that remains welded into place today.

Thus one of the central tasks before Americans today, as our nation’s imperial era stumbles toward its end, is that of reinventing America: of finding new ideals that can provide a sense of collective purpose and meaning in an age of economic and technological contraction.  We need a new American dream, one that doesn’t require promises of limitless material abundance and  doesn’t depend on the profits of empire or the temporary affluence we got by stripping a continent of irreplaceable natural resources in a few short centuries.

I think it can be done, if only because something of the same kind has been done three times already.  That said, nothing guarantees that America will find the new vision it needs, just because it happens to need one, and it’s very late in the day.  Those of us who see the potential, and hope to help fulfill it, will have to get a move on.

Article by John Michael Greer, author of Decline and Fall: The End of Empire and the Future of Democracy in 21st Century America.

For more about the book and ordering information go to  www.newsociety.com/Books/D/Decline-and-Fall

The Wastewater Gardener: Preserving the Planet One Flush at a Time

by Mark Nelson, author, The Wastewater Gardener

From the preface:

The Wastewater Gardener: Preserving the Planet One Flush at a Time“This book had its genesis the first time I tipped over an outhouse and shovelled the steaming contents into a wheelbarrow headed for the humanure compost heap. I was a city kid, I didn’t know the stuff was taboo.

When I was selected to be a “biospherian” crew member for the first two year closure experiment of Biosphere 2, was it destiny that one of my responsibilities was managing our “marsh recycling system” for all the wastewater? Later, when I fell in love with wetlands, natural and constructed, I decided to make myself useful by tackling sewage problems around the world. That in turn, led me to one improbable adventure after another, a veritable Wonderland of strange goings on, at times straining my incredulity. Fortunately, I kept my inner yogas: keep your optimism and belief you can make a difference, and never lose your sense of humor!

It occurred to me these “adventures in the shit trade” have more than purely anecdotal humor value. I got to see what is hidden for good reason from most people, though sometimes it took persistence and detective work to find out what was really happening. I feel a responsibility to share what I have seen and learned with a greater audience. Everything is connected to everything (as they say in ecology), and how we manage and mis-manage our shit, is a crucial part of the global challenge of our times. Conventional industrial-style agriculture doesn’t use animal manure = we turn our farms into monocultures, raise our animals in factory farms, use lots of chemical fertilizers which are expensive, release greenhouse gases and nutrients runoff our farms in great quantities polluting our waters and oceans. In the West, we centralize sewage treatment = sending all of its nutrients into our rivers and oceans, instead of back to our farms or green spaces. Rather than irrigating using graywater, we use precious high quality potable water. In poorer countries, there is virtually no effective sewage treatment at all = widespread contamination of drinking water leading to disease, death and further impoverishment.

We all know the story, “The Emperor has no Clothes”. This book is the global black comedy which unfolds when the little boy opens his eyes. I do hope you enjoy the ride. I promise it’ll change the way you think about at least one of the so-called “little things” we do in life.”

The book takes the reader on a humorous global tour of how we treat and mis-treat human wastes. Even the common word for our bodily wastes: “sh*^#t” is taboo so we don’t talk about it and don’t think intelligently about how to use it properly. And our sewage is a global catastrophe. In the West we treat it like a toxic waste, spend enormous energy and resources to pump it to centralized sewage treatment plants where much machinery and chemicals are employed, then generally dump the treated wastewater with its load of freshwater and nutrients into the nearest body of water – rivers, lakes, ocean. In the developing world, 95% of sewage is untreated and pollutes drinking water everywhere.

So after a brief history of how we “got into this mess” with a review of traditional Asia where city “night soil” was a source of revenue as it was sold to boatmen who took it upriver to farmers who composted it, maintaining the fertility of the soils that produce the city’s food. Then came specialized farming so even animal wastes are now replaced by expensive chemical fertilizers, half of which run off the soils to pollute water. And for the cities, came indoor plumbing so that water use greatly increased, and flush toilets require up to 10 tons of water to move 1 ton of human waste.

But no need for despair, the paradigms are changing and there a number of alternatives which are gaining traction which offer a return to valuing and using bodily wastes as a source of valuable nutrients and water. These include composting toilets, constructed wetlands for wastewater treatment and reuse, hygienic use of sewage for agriculture and aquaponics, graywater irrigation. On the water conserving sides, there are low-water methods of farming – including drip irrigation – and utilization of wastewater which contains the natural nutrients needed for landscaping or gardening, instead of using potable water with chemical fertilizers.

I take the reader on my personal odyssey into the world of “poo power” – learning by doing.

First stop is Synergia Ranch near Santa Fe, New Mexico where a group of people found the Institute of Ecotechnics and take on reversing the desertification of this semi-arid once prosperous high grassland. A thousand trees are planted, I briefly become the “horseshit king of New Mexico” making hundreds of tons of compost from our farm animals and the 1200 horses at the nearby racetrack. Photographs contrast the stark landscape of the 1970s to the new rich oasis, with organic orchard and vegetable farm that was created.

After a stint in West Australia starting the tropical savannah project of the Institute, I return to the U.S. to help with the Biosphere 2 project – the world’s first artificial biosphere, covering 3 acres with rainforest, savannah, desert, coral reef ocean, Everglades marsh and 8 people and their farm enclosed in an air-tight structure. There is no “away” in Biosphere 2 – as in, we can “throw it away”; everything has to be recycled if the world is to sustain itself. I manage and research our constructed wetland which treats and recycles all our human, domestic animal and laboratory wastewater inside for two years. It’s a revelation and I appreciate that a system like this needs to be spread around on planet – and could be a way to get people connected to some of their basic realities – where their water comes from and where their wastes go. Constructed wetlands are a natural approach – mimicing the power of natural wetlands to serve as the planet’s kidneys – so sunlight, gravity, green plants and microbes are needed, not machinery, chemicals etc. They also can be scaled from serving an individual house to cities with tens of thousands of people. There are several which cover more than a thousand acres.

While completing a Ph.D. with the systems ecologists at the University of Florida’s Center for Wetlands, I design and build a couple of “Wastewater Gardens” along the Yucatan coast south of Cancun, Mexico (with the assistance in the early years of the Biosphere Foundation, later the Institute of Ecotechnics) and use it for my dissertation research. We make the systems beautiful with a wide diversity of fruit and flowering trees and shrubs, not just boring “reed beds”. The systems are popular – being “subsurface flow wetlands”, there is no exposed sewage, it’s all kept beneath a dry layer of gravel – and we pass the “sniff test”! Then lots of hotels and people want it for their homes – and we go into business!

This business, now called “Wastewater Gardens International” (www.wastewatergardens.com ) takes me in the following decades around the world: Bali and Indonesia, the Bahamas, Western and Eastern Europe, the Caribbean, the Philippines and back to the outback in northwest West Australia, doing a number of Wastewater Garden projects on indigenous Aboriginal communities. The book takes people on a ground-truth, nitty gritty ride of dealing with health system bureaucrats (“diaper phobia” or “nappy neurosis”), differing cultures and attitudes, Sherlock Holmesing the mysteries of what’s actually happening (e.g. wastewater waterfalls in the Atlas Mountains, 5 star resorts using unsterilized wastewater to grow lettuce (!), unsealed “septic tanks” etc.

Along the way, we have lots of examples of practical projects using a variety of new approaches, and photographs galore. New of the most recent projects are a crescent-moon shaped Wastewater Garden in southern Algeria and a proposed art/ecology project, Eden in Iraq (www.meridelrubenstein.com/eden-in-iraq ) for Marsh Arab towns in the historic Fertile Crescent area of southern Iraq.

I end the book with seven guidelines for better management of our wastes:

1. Separate shit from the water cycle wherever possible.

2. Use water of the appropriate quality, according to need

3. Conserve water – drip irrigation, low-water appliances

4. Use wastewater to create green belts

5. Treat and reuse shit locally wherever possible.

6. Don’t mix industrial waste with residential waste

7. Send the sludge and compost made from human shit back to the land in an economical way, maintaining the health and productivity of our soils

So the book is both a global black comedy and is filled with concrete examples at micro and macro-scale of how we can and are beginning to fix the problems.

The paradigms they are changin’ – appropriate in a world with scarce water resources and the desire of everyone to live in a bountiful and healthy biosphere.

From the book’s ending:

“I would therefore like to add a Fecesphere meditation. Each time you go to the toilet to take a dump, be mindful of what you are doing. “Where does my water come from?” “Where does my shit go?” Then perhaps, investigate, find out. You will be way more connected to reality by trying this simple meditation and you’ll come to understand how life on this planet is indeed sustained. Then ask: “How can I make this activity healthier for my local ecosystem and indeed the biosphere?” “How can I change the world?”

The answer is not in the glorious, perfected hereafter (“there’ll be pie in the sky when you die”) but right now, beginning with understanding the “travel itinerary” of your shit.

How do we change the world, help create the Earth we want and need?

No action is trivial or unimportant.

We change the world one small step at a time, one flush at a time.”

Article by Mark Nelson, author of “The Wastewater Gardener: Preserving the Planet One Flush at a Time”

Big Brands Convene to Step Up Supply Chain & Product Innovation

by Michelle Mosser, Brand Nature

 

Michelle MosserSustainable Brands 2014, now in its eighth year, has become a magnet event for those big brands that have answered the “Inconvenient Truth” wakeup call.

Over 2000 international attendees sprinted through a packed four-day program at San Diego’s Paradise Point Resort in which presenters -– corporate branders, green consultants and related NGOs — touted their newest sustainability initiatives.

Whether spurred by a more socially responsible customer base that is hyper-informed by social media, or facing marketplace pressures, the forerunner global brands at this conference have answered the sustainability call. The SB14 organizers designed the forum to spotlight global industry innovations in response to daunting climate, supply chain and economic challenges since “green” went mainstream.

Event tracks aligned under the broad themes of REIMAGINE, REDESIGN and REGENERATE, which translated to eco-advances in product design, packaging and waste-stream practices, and corporate buying power that is shifting procurement methods away from manufacturing norms linked to deforestation, greenhouse gas and intensive water use. “Regenerate” translates into making quantum shifts that effectively re-invent products, brands, and the role business plays in these challenges –– a change that appeared well under way among the presenters.

The Big Pivot

Conference founder, KoAnn Skrzyniarz kicked off the week with a challenge for the change agents in the room. She asked members of industry to think––and do—more, to collaborate for mutual gain and broaden the definition of value their brands deliver.

Eco-strategist and Harvard Business Review author Andrew Winston set the stage by speaking from his latest book, The Big Pivot – Radically Practical Strategies for a Hotter, Scarcer and More Open World. “If we don’t tackle the bio-physical underpinnings of our world, the other issues are moot,” Winston said. He made the case for a dramatic shift from “business as usual,” so companies can adapt to five rapidly changing global conditions:

1)  Demographic and social changes

2)  A shift in global economic power to the East

3)  Rapid urbanization

4)  Climate change and resource scarcity

5)  Technological breakthroughs

A Vision Pivot, a Valuation Pivot and a Partner Pivot require, respectively, a change in how we see, value and work in the world. Pursuing “heretical” innovation; setting science-based goals; fighting “the short-term obsession”; evolving the numbers we assign to value; and broadening industry’s ability to partner with government and competitors, are core tenets. “All this leads to the hot topic of resilience,” Winston summed up.

He noted that beverage giant Coca-Cola recently partnered with fierce rival competitor Pepsi, along with Unilever, to remove the harmful chemicals in refrigerants after realizing its biggest carbon footprint was HFC refrigerants used to cool drinks.

Plenaries spanned young eco-innovators to 25-plus year veterans of the triple bottom line.

Particularly exciting were new product innovations under the REDESIGN track, where challenges of climate change and natural resource depletion have sparked the entrepreneurial capacity to see problem solving as a competitive advantage.

Aly Khalifa, founder of Lyf Shoes, as well as Director of Design and Engineering at McDonnough Innovation, shared their radically cool, new concept for designing shoes. Their Cradle to Cradle® process marries innovations in 3D and on-demand printing with traditional hand craftsmanship. They have innovated a system for producing one-off, custom fit and designed shoes with interlocking components that mimic ancient Shinto temple construction. Assembly uses no adhesives and fabrication sourcing employs 100 percent reclaimed raw materials, (like Whole Foods wine corks). After running a digital scan of a customer’s feet, their shoes can be assembled in 90 seconds at the retail store – effectively eliminating waste liabilities on the manufacturing side.

Jeremiah Owyang of Crowd Companies connected the economic dots of the social-share economy in his head-turning presentation: Redesigning Consumption: How Sharing is Becoming the New Buying, based on a first-time study. The study tracks responses from more than 90,000 Internet users across the US, UK and Canada, and the report concludes that sharing online is mainstream, growing, practical and satisfying, and has become a competitive threat to large corporations. Major brands who have recognized this trend have already developed, or are in the process of building, online marketplaces and divisions where products, services and knowledge are shared and rented, not purchased.

Dayna Baumeister, pioneering co-founder of Biomimicry 3.8, updated the audience on a diverse range of companies that have worked with their team to learn how nature solves many problems that industry grapples with. Product innovators are achieving better performance through “the conscious emulation of Nature’s genius.”

In one application of biomimicry, a German window glass company looked to spider webs to understand why birds don’t fly into them. The company now utilizes ultra-violet fibers, like those found in webs, in glass fenestration for panels used in their client’s high-rise buildings, which has completely eliminated bird crashes.

In another case of biomimicry, a solar-thermal energy company has produced 25 percent more power with their installations by arranging panels to mimic the configuration of seeds in a sunflower blossom.

Yet another companuy, ReGen, has applied a mathematical-model that mimics the coordination patterns that occur when fish school and birds flock, to better design energy-optimization systems for buildings, now saving up to 23 percent at peak load times.

Columbia Forest Products completely eliminated formaldehyde from their building products by emulating the adhesive that blue mussels create in their underwater ecosystems.

Brands use SB14 for new rollouts

Panera Bread’s Chief Concept Officer, Scott Davis announced his company’s new (Clean) Food Policy, raising Panera’s leadership bar among fast food chains. Already known for innovating ways to partner with farmers to affordably source healthier ingredients like free-range chicken and organic milk for their kids menu, this new commitment could be precedent-setting across the industry. By 2016 the company will remove all artificial additives in their food including MSG and artificial trans fats. Additionally their policy will provide “a transparent menu” for customers, so they can choose between the caloric counts of dishes, see full ingredient lists and learn more about where their food comes from.

Target announced its new “Made to Matter” naturals department – a first-of-its-kind mass market approach to merchandising products across many channels in one area of their stores. At the time of launch the collection will span 16 leading natural, organic and sustainable brands across six categories–Baby, Beauty and Personal Care, Grocery, Healthcare, and Household products. Brands include Annie’s Homegrown, Burt’s Bees, Clif Bar, Ella’s Kitchen, EVOL, Horizon Organic, Hyland’s, Kashi, Method, Plum Organics, Seventh Generation, Shea Moisture, Target’s Simply Balanced, Vita Coco, Yes To, and Zarbee’s Naturals.

Coca-Cola debuted EKOCENTERTM, their new social enterprise initiative which provides solar-powered popup community hubs to rural off-grid global villages who are most in need of life’s basic services. Derk Hendriksen, General Manager of EKOCENTER, describes this concept as “downtown in a box,” a modular building that in its first phase will provide essentials like safe drinking water filtration and healthcare products, and connectivity services like wi-fi, phone chargers, photocopying, and education programs. Their business model partners with NGOs operating on the ground in these villages, versed in providing expertise in training women to become business owners and grow access to micro-finance. By the end of 2014, Coca-Cola plans to have 30 test Ekocenters installed, beginning in South Africa.

Radical partnering to achieve more sustainable supply and social benefits

Bill Shireman, CEO of Future 500, led exemplary discussions to spotlight collaborations thought unimaginable even a few years ago – such as the partnership that brings paper giant Avery Dennison in line with what Shireman called a “zero deforestation supply chain policy.”

Dean Scarborough, Avery Dennison (AD) CEO, described how the $6 billion dollar global paper products company that buys thousands of tons of paper, chemicals and film materials a year for its labeling and packaging product lines has had the opportunity to tackle a greener supply chain at price parity. In 2011 AD issued their first sustainability report grading themselves on their two-year strategy to reduce landfill waste by 85 percent and greenhouse gas emissions by 15 percent, while increasing sustainable products in their line. Today, Scarborough has almost reached zero percent landfill waste and has launched Forest Stewardship Council (FSC) certified paper products. Wholesale buyers, however, were eschewing the greener materials because they cost more.

AD had begun working with the Rainforest Alliance (RA) on a responsible sourcing policy initiative when Tensie Whelan, RA president, invited Dean to visit Indigenous sustainably managed forests in Guatemala and eucalyptus plantations in Brazil that feed FSC pulp mills and enable zero sourcing from virgin forests. A light bulb went off for Dean when he realized AD could leverage their buying power with others in their industry to achieve price parity for all. They’ve now implemented a Responsible Paper Sourcing policy where 40 percent of their European products use FSC certified paper and they’re using 25 percent worldwide this year. Avery Dennison has raised the bar further; setting a 95 percent target for FSC certified papers in the next two years.

Scarborough continued, “But then we realized that sustainability is a wonderful lens for innovation. We can solve problems for other companies and their supply chains.” This experience with creative problem solving inspired development of a new adhesive product called CleanFlakeTM, which allows labeling to be easily cleaned/separated from the PET bottling process – an industry first.

Sustainable Brands (www.sustainablebrands.com ) is expanding an ambitious outreach plan, delivering on their mission to shift global businesses toward a sustainable economy by helping brands to embed purpose-driven environmental and social innovation into their core DNA. Over the last two years they’ve convened conferences in Istanbul, Rio and London and will be hosting SB events in Buenos Aires, London and Malaysia this Fall. Their second annual US New Metrics Conference is slated for Boston on September 24–26, 2014.

Article by Michelle Mosser, founder, Grace Communications. Find out more about Michelle, who is GreenMoney’s eJournal designer and social media consultant, at  www.gracecom.ws

Financing Solar: A Love Story

By Jamie Evans, Panasonic Eco Solutions, Managing Director, Head of U.S. Eco Solutions

Jamie Evans
Financing Solar: A Love Story

Where it All Began

In a world where precious natural resources are shrinking and climate threats loom large, actionable steps forward are not only celebrated, but also demanded by an ever growing environmentally-conscious society that knows we cannot afford to wait.

Excited to rise to the challenge, companies have made sustainability a top priority as more and more jump on board the “go green” train, developing and publishing annual corporate social responsibility reports that showcase their greenest initiatives and achievements, from water recycling programs to solar systems and beyond.

As business leaders flesh out plans to incorporate more environmentally friendly practices within their corporations, they know that ultimately it all comes down to facts and figures. While sustainable solutions are a necessary part of protecting our planet, they must also be economically viable.

Trouble in Paradise

On the surface, solar energy may appear to be easy – just sunshine and bright skies. But behind the scenes it can be a fragmented process full of complex, tax-driven financial structures and multiple layers of development and implementation.

Traditional solar models require the involvement of different third-party vendors at each phase of the process. From the start, facility managers, developers, and sustainability officials must engage with one firm for concept, one for design, one for construction, another for financing, and the list goes on. Partnering with multiple vendors causes solar projects to become disjointed and inefficient, resulting in cost increases, missed deadlines, frustration, and sometimes failure.

Independently financing, owning and operating solar assets is difficult for many organizations. The financial structures are complicated and many companies lack the tax liability needed to monetize tax credits and depreciation benefits. In addition, while Power Purchase Agreements (PPAs) have grown in popularity, the challenges associated with negotiating, structuring, and financing these deals, particularly with numerous parties, can frustrate potential customers and make the transaction cost prohibitive.

Couples Therapy

It’s a team effort to successfully go solar. Companies need a trusted partner with extensive internal capabilities who will guide them through every stage. These experts serve as a one-stop shop for renewable energy, streamlining the process and providing an end-to-end solution that includes project development, engineering, financing, construction, and long-term service and maintenance.

Integrated models typically offer a variety of financing options that eliminate the need for upfront capital outlays and simplify solar through a simplified set of contracts. This mitigates project delivery risks for a more efficient and cost-effective solution that ensures attractive and reliable benefits for decades to come.

Happily Ever After

These comprehensive solutions bring everything under one roof, meaning the partners are there during the honeymoon phase, when the sun is shining and solar savings are soaring, and through the long term life of the system, including asset management and maintenance services.

With panels in place, companies are reaping both financial and social benefits. They are simultaneously reducing utility costs and hedging future energy costs while also establishing their commitment to social responsibility, strengthening their brand identity – key to success in today’s sustainability-minded society.

Working with a streamlined solar provider, more corporations are pursuing solar solutions and achieving renewable energy success – efficiently and cost-effectively.

Article by Jamie Evans, Panasonic Eco Solutions, Managing Director, Head of U.S. Eco Solutions.

Desert-Greening: The Next Big Thing for Green Investors

By Hazel Henderson © 2014 for GreenMoney Journal

 

Hazel Henderson
Desert-Greening: The Next Big Thing for Green Investors

Asset managers and investors are supposed to be rational actors, cranking in all available information leading to efficient markets and optimal resource-allocation. As market failures continue to proliferate and hidden externalities come home to roost, we find that successful investing requires going multi-disciplinary – far beyond narrow economic and financial models. As we learn from pioneer asset managers’ successful fossil-free portfolios, such as those presented at our recent Finding Ethical Alpha Conference, broadened horizons and deeper research reveal huge unexploited opportunities. Our keynote speaker, Doctor Dennis Bushnell, Chief Scientist at NASA in Langley, VA, pointed out that four abundant resources are overlooked by investors and traditionally focused development banks and IFIs: deserts (40 percent of our planet’s land); daily free photons from our Sun; 10,000 varieties of halophyte (salt-loving) plants, and seawater for irrigation (97 percent of all Earth’s water).

Doctor Bushnell’s presentation, “Halophytes for Land, Water, Food, Energy and Climate,” explained that there are two major types of plants: glycophytes which use fresh water and provide most of human food and fodder, and halophytes (salt-loving) used for food and fodder in India, China, Mexico, the Middle East and many other counties. We covered the possibilities of halophytes grown in deserts on seawater in our 2014 Green Transition Scoreboard® titled “Plenty of Water!” (http://bit.ly/1e193ei ) – where we challenge the dominant paradigm in global agriculture that ignores 97 percent of the world’s water, as well as myopic investors, focusing only on that 3 percent of fresh water – which is scarce, over-used, wasted and polluted. Reviewing most literature and research by governments, international agencies, even most academic research on agriculture, I found zero references to halophytes! Traditional narrow economics and finance focuses and channels virtually all public and private investments into better irrigation, plumbing, sewage treatment, desalination, genetically modified crops, and water and soil conservation. While important, these investments cannot address global water crises. Little investing occurs in the most promising halophytes, such as salicornia and other plants, now hybridized to substitute for wheat, soy, alfalfa, edible oils and well-demonstrated seawater irrigation. Similarly, mal-investment in biofuels continues, still buttressed by US congressional mandates for ethanol content in gasoline. As Thomas Kuhn, author of The Structure of Scientific Revolutions, pointed out at my dinner table back in the 1970s, paradigm shifts occur one funeral at a time!

Today, we no longer have time to ignore these four abundant, ubiquitous resources to supply food, fiber and edible oils for our 7.5 billion member human family, expected to grow to 9 billion. As Doctor Bushnell, Doctor Mae-wan Ho, British-based epigeneticist, and co-author Professor Joe Cummins, in “Saline Agriculture to Feed and Fuel the World,” and others have shown, desert-greening’s time has come. Doctor Carl Hodges, who also keynoted our Finding Ethical Alpha conference, is president of the Seawater Foundation and has been growing halophyte crops in both Mexico and Eritrea and has several current initiatives in Texas and in Mid-East countries. (My TV discussion with Bushnell and Hodges is forthcoming on www.ethicalmarkets.tv  and for educational use at  www.films.com ).

After the decades of mis-investment in ethanol, we have learned that burning food crops in our inefficient vehicles harms the environment and drives up food prices and often causes riots and social unrest, as our Advisory Board member Doctor Yaneer Bar-Yam of NECSI’s computer models shows. Our Green Transition Scoreboard® only counts those biofuels grown from algae on seawater, such as the aviation fuel co-developed at the Masdar Institute in Abu Dhabi with Boeing to power jet planes – more efficiently than petroleum distillates. Boeing and several airlines set up the Sustainable Aviation Fuel Users Group (SAFUG) in 2008. Integrating such halophyte biofuel production with traditional aquaculture (which produces polluting wastes) enables the algae to feed on the fish wastes – solving two problems at once, as reported in EnergyPost (EU) and Phys.org. Doctor Bushnell adds, “a goodly portion of the Sahara is capable of providing (using halophytes and seawater irrigation) sufficient biomass to replace ALL of the fossil carbon, provide requisite food, replace petrochemical feedstock, whilst returning 68 percent of the freshwater now used for conventional (glycophyte) agriculture to human use. This addresses our overall crises of overuse of land, water, needs for food, energy and stabilizing climate – since halophytes are great storers of carbon and soil enrichers.”

While water scarcity is listed by the World Economic Forum as one of humanity’s top risks, financial models are still blind to desert-greening’s huge opportunities. Just as asset managers had to learn the basics of geology in order to invest in fossil fuels and minerals, so today they need to expand their models to learn earth systems science. NASA and other space agencies collaborate in GEO, offering real-time information beamed to decision makers from the 120 Earth-observing satellites mapping the changing conditions on Earth, many caused by humans in this Age of the Anthropocene. NASA’s July 2014 launch of OCO-2 will detail how CO2 is absorbed by Earth’s oceans, lands, plants and atmosphere – now all material information for investors.

Are asset managers up to the task? We think so, judging by reports by global experts on our Advisory Board, including Doctor Mae-wan Ho (UK) on halophyte agriculture; Doctor Allan Savory on restoring deserts; biologist Janine Benyus on biomimicry; Gunter Pauli of the Zeri Institute, and Fritjof Capra, co-author of The Systems View of Life (2014), founder of the Center for Ecoliteracy. They and others can lead the way as we continue to follow Doctor Carl Hodges and the initiatives in the Caribbean island of Aruba, planning to go 100 percent renewable, with more locally sourced foods – also studying seawater agriculture. The most ambitious proto business plan is from our advisor Gijs Graafland’s Planck Foundation, DesertCorp (www.desertcorp.com ), which can be adapted for different countries’ topology, geology, ecology, politics and climates. Many top officials and major corporations are now studying DesertCorp along with high-level government officials in many countries, and now so can readers of the GreenMoney Journal!

Meanwhile, theory-induced blindness and cognitive capture are sadly still evident in recent official studies of water and desertification issues, including amazingly Drylands: Sustaining Livelihoods and Conserving Ecosystem Services, the SUMAMAD study co-sponsored by UNESCO’s Man and Biosphere program, the UN University and the Flemish government;  The Water Institute of the University of North Carolina on the Nexus 2014 conference on Water, Food, Climate and Energy;  The Economist brief on “The New Green Revolution” (May 10, 2014);  the United Nations Convention to Combat Desertification global report, “Desertification: the Invisible Frontline” (2014) and their Alert No. 06/03/2014. Even the private sector report co-sponsored by the Economics of Land Degradation, the World Business Council on Sustainable Development and the Global Compact overlooks desert-greening.

We at Ethical Markets (www.ethicalmarkets.com ) will keep up our active coverage of the huge opportunities in desert-greening we predict will be that next big thing!

Article by Hazel Henderson, D.Sc.Hon., FRSA, founded and heads Ethical Markets Media (USA and Brazil), a Certified B Corporation. She served on Calvert’s Advisory Council from 1982 until 2004 and co-created their Calvert-Henderson Quality of Life Indicators in 2000, now being updated and rebranded as the Ethical Markets Quality of Life Indicators. Henderson’s many books spearheaded thinking on strategies for the development of ethical investing and envisioned the rapid global shift now underway from the fossil-fueled Industrial Era to the cleaner, greener, knowledge-rich Solar Age.

Note to Reader: GreenMoney will be having a “Special Issue on Water” in March 2015.

Renewal Funds: Investing for Change

by Joel Solomon with Rebecca Cuttler, Renewal Funds

 

Joel Solomon
Renewal Funds: Investing for Change

The 21st century will see dramatic retooling of the ways we live together on the planet. It’s time to shift capital to the regenerative economy.

I’m the Chair of Renewal Funds (www.renewalfunds.com ). We are a social venture capital firm that invests in change by supporting businesses at the forefront of social and environmental innovation. I believe that there must be a fundamental reinvention of where and how capital is deployed.

Renewal Funds is one among an emerging sector of new mission-driven investment models. We call ours ‘social venture financing’. We aim to deliver above market financial returns, as well as strong community and earth-friendly returns, by investing in Canadian and US businesses that provide meaningful and positive advances.

Renewal Funds focuses on organic and natural foods, green consumer products, and social and environmental innovation. Our portfolio includes companies like Spud, North America’s largest Internet grocer of organic and natural foods; Aquatic Informatics, which develops water and climate data software and analytics; Alter Eco, an importer and seller of fair trade, organic and carbon neutral food products including quinoa, rice and chocolate; and Sensible Organics, USDA certified organic skin and beauty care products.

Renewal Funds’ investment criteria include annual revenues of more than $1 million, a scalable business model, and headquarters in Canada or the USA. Our initial placements range from $1-2 million. All of our portfolio companies have a “mission first” approach to their businesses. They care about increasing shareholder wealth, and also about providing organic, greener and cleaner alternatives to conventional choices. They treat their employees well, and their products inherently increase environmental safety, broader opportunity, and economic equality.

Our due diligence process begins with mission and culture screening. We work to assess whether the products or services offered by a company under our consideration will have a truly positive effect on the planet. We meet with the company’s management team to review their manufacturing processes, supply chains and employee management practices. We do this in order to ensure that the company authentically stands by its stated mission commitments. Our portfolio selection ensures that we are a mutual fit with the company and that we share a similar outlook. Renewal is a founding B Corporation (www.bcorporation.net ), also we are GIIRS-rated, and a 1% for the Planet company (www.onepercentfortheplanet.org ).

Despite the innovation of this mission-first approach, our portfolio is excelling, on track to meet or exceed our “above market” IRR (internal rate of return) target.

I first began working with Renewal Funds Co-Founder Carol Newell in the early 1990s to invest in companies with strong environmental and social strategies. People thought that we were crazy. We were told repeatedly that our commitment to use capital for social impact would not turn a profit. But, thanks to Carol’s extraordinary vision and tenacity, we built a strong team that worked together to demonstrate that investing in companies with a mission and purpose, could prove financial viability, be generative, and be replicable. Through Carol’s “activist family office”, with its “whole portfolio activation to mission” philosophy, Renewal Partners (www.renewalpartners.com ) successfully built an investment portfolio that included companies such as Stonyfield, Seventh Generation, Jantzi Sustainalytics, Village Real Estate, Salt Spring Coffee, Horizon Distributors, Lunapads, Sounds True, Happy Planet and more. (Note:  Find a list of company websites at end of this article)

In 2008, Renewal Partners gave rise to Renewal Funds, designed for outside investors. We now have over $98 million in assets under management, and our most recent offering, Renewal3, is a testament to the excitement that investors have for a truly mission-first option for their money. Our $30-$50 million goal for Renewal3 was exceeded and we closed in February 2014, at $63 million. That made us into a truly going concern. We are right sized for the per company attention and scale of business that is our sweet spot. We are proud now to have over 125 individuals, families, foundations and SRI wealth managers as our Limited Partners.

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A huge change in public consciousness has happened since the early days of Renewal Partners. This advance is in part because of a massive inter-generational shift in wealth and consciousness that is now underway. It will pick up more momentum, with baby boomers poised to bequest the largest transfer of capital in history, somewhere between $30 and $50 trillion over the next three decades. These new wealth holders face a more uncertain economic environment, species collapse, global population growth, a growing economic divide, climate change, and dramatic uncertainties. These factors are contributing to the booming demand for investment products with a focus on longer-term societal resilience. People increasingly want “organic money,” as well as clean food, clean energy, more direct, transparent, local and authentic products and services of all kinds.

Renewal Funds’ sectors are critical for a resilient society. They possess strong growth trends. Research studies demonstrate that consumers are making healthier choices for themselves, their families and the planet, and are willing to pay a premium to align their purchases with their values. Yet these sectors are underserved by professional investors. Ninety percent of all venture capital investment in North America has been directed to tech, clean-tech and biotech businesses. Our unique positioning provides us with excellent access to opportunities to partner with visionary entrepreneurs and companies. After a first round investment we reserve capital for follow-on investment to support our companies as they grow and need more capital.

Today, I’m excited to be working towards Instinct, a new seed capital fund, with a broad mandate to make smaller investments with quicker decisions. This fund will support earlier stage companies that have powerful potential to shape the economic landscape for the future.

A new industrial evolution is underway. Practices that once dominated the world’s economy are growing increasingly unstable – from conventional agriculture, to poverty wages for workers, to unchecked non-renewable resource extraction, to unexamined consumerism. A new form of capitalism is rising. Organic foods and solar panels are rapidly dropping in price. Fair trade and worker ownership are ensuring broader access to a high quality of life. Enormous growth in social entrepreneurism is underway. The emerging collaborative economy – as just one example – is poised to disrupt many sectors. Watch what happens to the financial industry over the next few decades, as the winds of change reach this bastion of old school thinking!

A dramatic reorientation is taking root for wealth. We now have the opportunity to look beyond incumbent investment theories and use our money as the powerful tool that it is, to shape the type of world we want to see for future generations. Renewal Funds, and our fast growing number of colleagues in the world of financial services with a related point of view, are truly “investing for change.”

Article by Joel Solomon, Chair of Renewal Funds (www.renewalfunds.com ), Canada’s largest social venture capital firm, with $98 million assets under management. Renewal Funds invests in organic food, green products, and environmental innovations.

Contributing to this article is Rebecca Cuttler, an experienced administrator committed to supporting healthy local economies. Prior to joining Renewal Funds, she worked as Executive Assistant to SFU Woodward’s Cultural Programming office.

Company websites mentioned in the article:

Alter Eco –                                        www.alterecofoods.com

Aquatic Informatics –                       www.aquaticinformatics.com

Happy Planet –                                 www.happyplanet.com

Horizon Distributors –                      www.horizondistributors.com

Jantzi Sustainalytics –                     www.sustainalytics.com

Luna Pads –                                     www.lunapads.com

Salt Spring Coffee –                         www.saltspringcoffee.com

Sensible Organics –                         www.sensibleorganics.us

Seventh Generation –                     www.seventhgeneration.com

Spud –                                              www.spud.ca

Sounds True –                                  www.soundstrue.com

Stonyfield –                                      www.stonyfield.com

Village Real Estate –                        www.villagerealestate.com

Hal Brill, Michael Kramer and Christopher Peck, the Managing Partners of Natural Investments

The Resilient Investor: A Plan for Your Life, Not Just Your Money

By Hal Brill, Michael Kramer and Christopher Peck, Managing Partners of Natural Investments

By Jim Cummings, editor

Excerpts from the forthcoming book, The Resilient Investor: A Plan for your Life, not just your Money  (available from Berrett-Koehler Publishers)

Note to reader: Hal Brill, his father Jack, and GreenMoney publisher Cliff Feigenbaum were coauthors of the 1999 book, Investing with Your Values. So it is appropriate that the GreenMoney Journal is the first publication to offer an excerpt from this new work written by the partners of Natural Investments LLC.

 

The Resilient Investor: A Plan for Your Life, Not Just Your MoneyDoes the challenge of making informed decisions about your life seem far more complex today than it did even a short time ago? Does the future—yours, and that of the world—feel highly uncertain, perhaps even precarious?

We can sense you there, nodding in agreement. So we need to say right at the outset that you’ve just picked up a book that is not going to tell you what’s going to happen this year, or next. It would certainly be easier to market a book that reveals our “three smart money secrets”—everyone’s a winner! But we can’t in good conscience make that pitch for one simple reason: the future has yet to be written. There are no simple formulas that can be relied upon in this complex and unpredictable world.

The good news is that this article and the book offers something that’s even more valuable: a dynamic framework that will help you navigate the stormy times we’re living in. The tools we’re offering are designed to keep you nimble, which you’ll need to be as the ground under our feet continues to shift. Because although we can’t tell you how things will change, we do know that they will change.

To guide your way forward, this book offers a pairing of two central ideas: resiliency, and embracing an expanded view of what it means to “invest.”

The first, resiliency, offers an invaluable set of principles that can guide our decisions in this fast-changing world, keeping us responsive in the decades to come. The second arises from our experience as investment advisors, through which we’ve come to appreciate the pivotal role that investing plays in shaping the wholeness of our lives, and our collective future.

By weaving these two essential themes together, we developed the evolutionary framework that you’re about to learn: resilient investing. It’s designed as a toolkit that helps you to build a life in accordance with your dreams, no matter what the future may bring. With it, you’ll learn how to take action, stand up to uncertainty, and stay flexible.

Resilience

There’s a new word in town, and its name is “resilience.” It came in out of the blue and unseated the reigning champion, “sustainability,” which as many had noted, was getting kind of soft (Barbie now comes in “sustainable packaging”). Everywhere we look, resilience is poking its fresh new face: in economics, climate science, leadership, online security, community planning, and psychology (actually that’s a place where it’s been in common usage for some time). Amazingly in these partisan times, it has managed to cross the ideological spectrum. The Post-Carbon Institute recently re-branded their website as resilience.org, while the World Economic Forum in Davos jumped on the bandwagon by focusing its 2013 conference on “Resilient Dynamism.” If resilience science speaks simultaneously to re-localization activists in their transition towns, as well as to the 1% gathered in their enclaves, we should clearly be paying attention!

For those with a strong focus on assuring that we maintain the viability of the biosphere, it’s worth taking a moment to see why resilience is starting to displace sustainability as an organizing concept. Besides the greenwashing alluded to above, sustainability tries to come up with an “equilibrium point” in which a system stays in balance but this is counter to how many natural and human systems operate. As architect and systems thinker William McDonough wryly asks, “Who simply wants a sustainable marriage?” Resilience does rely on the principles of sustainability (unsustainable investments weaken the capacity of a system to maintain integrity), but it strives for a healthy dynamism rather than stasis.

The lens of resilience makes us more cognizant that for better or worse, we have entered the age of the Anthropocene—a new term for a geological age in which humans have become the dominant factor shaping the world. Natural systems have been damaged to such a degree that we need to be prepared for random, extreme disruptions. At the same time, resilience points out that we should be designing our systems, and our lives, so that we do more than survive such disruptions. We’ll want to “capture the upside,” thriving and growing when exposed to volatility and disorder, while also seizing emerging new opportunities as they come into view.

Our goal as investors is to make things better, for us, and for the world. We are using “resiliency” in its most flexible and optimistic form, still loyal to the goals of sustainability (providing for the needs of the present without harming the future), and with eyes staying sharp for emerging prospects. Here’s our working definition:

Resilience helps us thrive by

•  anticipating and preparing for disturbance,

•  improving the capacity to withstand shocks,

•  rebuilding as necessary, and

•  adapting and evolving when possible.

Resilience is a powerful metaphor for our uncertain times. It provides a framework for learning how to live with the fundamental complexity of modern life, rather than trying to simplify our way out of it in order to make decisions. When the inevitable disruptions do hit the system, resilient investors will have the best possible shock absorbers to minimize being rattled, and be positioned to bounce back even better than before. Our favorite one-liner comes from Harvard business professor Rosabeth Moss Kanter, who said, “When surprises are the new normal, resilience is the new skill.”

An Expanded View of Investing

Many people have a rather narrow image in their minds about what “investing” really means. Do an image search on the word, and you’ll see lots of coins and dollar bills, graphs and charts, bullion bars and Wall Street suits. What generally comes to mind is that investing is done by those who have extra money, in order to turn this into even more money, using the methods promoted by Wall Street. While most of us are interested in becoming more prosperous, this concept of investing leaves many people out of the game, and even for those who do invest this way, it is a cold and abstract prescription that fails to touch on what gives deeper meaning to our lives.

We say that it’s time for a new approach. Rather than wrinkling up one’s nose and doing “investing” the way we’ve been taught, we’re asking people to take a step back and really think about what a powerful and creative role this activity can play in our lives. This begins with expanding our notion about what investing truly is. So try this on for size: investing is something that we all do by directing our time, energy, attention, or money, in ways that move us towards our future dreams, using a diverse range of strategies.

Let’s start with dismissing the popular notion that investing is an activity that is only available to those with discretionary capital to play with. The fact is, neither the investment, nor the return, must necessarily be in the form of money. Financial investments are just one side of the coin; on the flip side is time, which we choose to expend through the ways we focus our attention or channel our energy. These, too, are precious resources that we can and should bring to the investing table. Throughout this book, we’ll look at ways that the choices you make with your time, attention, and energy are as central to your long-term investments as the ways you work with your money.

Next, we rethink the purpose of investing. As the Beatles so joyously pointed out, money can’t buy us love. Still, the single-minded pursuit of most investors is to increase our financial “net worth,” though our real goals in life are much broader than this. Resilient Investing recognizes that we are actually interested in cultivating several types of assets: personal (relationships, community, learning, health, spiritual growth), tangible (home, efficient energy systems, local food supplies, a healthy ecosystem around you) and financial (stocks, bonds, savings). By including all of these valued objectives in our resilient investment plan, we have the opportunity to shape virtually all aspects of our lives.

Finally, it’s important to rethink how we pursue those goals. Are the recommendations proffered by traditional investment books, magazines, and financial services firms the one and only valid methodology? Are there other strategies that you can use to diversify and seek out new opportunities that are largely ignored by Wall Street? And in this volatile, complex world, might it be wise to consider the possibility that strict adherence to traditional, buy-and-hold-on-to-your-hats dogma may leave us vulnerable to systemic risks that threaten to send our economy reeling?

We call the process of spreading our wings into more spacious skies “weaning off Wall Street.” It opens our minds to exploring investment strategies beyond the common focus on just financial markets. Resilient Investing provides three novel approaches from which to mix and match: Close to Home, Sustainable Global Economy, and Evolutionary Investing.

With our expanded resources (money and time) in hand, we created a new map, a three-by-three grid that covers much more terrain than that old familiar basket of market-based financial investments. Along the north-south axis, we aim to grow all three types of assets. Moving east to west, you’ll be engaging in our three distinct investment strategies. This results in the nine zones of investment choices that comprise The Resilient Investing Map.

You could think of each of the nine investment zones as baskets in which you can distribute the eggs (time and money) that you have to invest. By doing this, you’ll achieve far more diversification than could be imagined from the limited perspective that most people are accustomed to using.

We invite you to embark on this journey of exploration in service of a most concrete purpose: preparing your life for whatever may come. We’ll help you cultivate a deeper clarity about how to work toward your hopes and dreams for the future while also accounting for the uncertainties inherent in looking beyond our visible horizons. The way forward is likely to be dangerous, exhilarating, and challenging; it can also be rewarding, nourishing, and joyful. We may not know which future awaits us up around the bend—but the way there is clear: we’ll just need to bend!

This article was based on excerpts from the forthcoming book, The Resilient Investor: A Plan for your Life, not just your Money by Hal Brill, Michael Kramer and Christopher Peck, the Managing Partners of Natural Investments. Jim Cummings worked as editor of the book.

 

The book is scheduled to be published in January 2015. For ordering information, contact Berrett-Koehler publications at  www.bkconnection.com

The authors may be contacted through their website at  www.naturalinvestments.com

Natural Investments is an investment advisor registered with the SEC.

Resilience

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