Category: Summer 2012 – Sustainable Business & Investing

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The Next 20 Years of Organics

 By Gary Hirshberg, co-founder and chairman, Stonyfield Yogurt

Gary HirshbergWhen thinking about our future, I can’t help but think of the past. I often joke that back when we started Stonyfield in 1983, you couldn’t even use the words “organic” and “industry” in the same sentence.

With just seven cows and hardly any consumers understanding “why” it made sense to eat organic, we had no supply, and no demand. Today our annual sales are over $360 million, and the rest of the organic industry has continued to grow right alongside us. In the U.S., sales of organic food and beverages have grown from $1 billion in 1990 to $35 billion in 2014. Even during the recent economic downturn the organic sector grew at a much faster pace than the conventional food sector. Organic food sales now represent about seven percent of all U.S. food sales. The organic industry grew by nine percent in 2011, adding new jobs at four times the national average. Organic is a growth engine for the economy.

What’s driving this continued growth? The simple answer is the public. Every day more people are deciding they want to take control of their health by taking control of their diet. Hardly a day goes by without another story breaking about a food supply scare. Pink slime in our burgers, antibiotics in industrial livestock production leading to antibiotic-resistant superbugs, arsenic in our chicken, salmonella on our cantaloupe – the list goes on.

For others, it can be a more personal life event, such as a pregnancy or a diagnosis of cancer or diabetes, that leads people to a new awareness of how the food they eat affects their health, or the health of their unborn children. In recent years we’ve learned that prenatal exposure to pesticides can result in lower birth weight, delayed cognitive development, ADHD diagnoses and even lower IQ. It’s been shown that we can avoid many of these risks by eliminating our exposure to pesticide residues in our diets. As columnist Nicholas Kristof reported in The New York Times two years ago, “The President’s Cancer Panel is the Mount Everest of the medical mainstream, so it is astonishing to learn that it is poised to join ranks with the organic food movement and declare: ‘chemicals threaten our bodies.’” Four out of every 10 Americans will have cancer in their lifetime, the report stated. The 2010 panel, whose members were appointed by the Bush administration, recommended limiting your exposure to chemicals by eating foods produced without pesticides as one way to lower cancer.

With cancer, diabetes, obesity and allergens on the rise, people want to know more about their food. At Stonyfield, we hear from people 24/7 asking about ingredients, where they’re from, and how they’re grown. Often they are overwhelmed with contradictory information. There is considerable confusion over the difference between organic and natural, for example – and whether there is any difference at all. Unscrupulous companies have led consumers to believe that ‘natural’ products offer all of the benefits of certified organic for a more affordable price. With the rise in public confusion comes increasing consumer distrust. In response, agribusiness launched a $30 million PR campaign to build trust through a new US Farmers and Ranchers Alliance. The Center for Food Integrity, a non-profit created by Monsanto and other agribusiness interests, is dedicated to “build consumer trust and confidence in today’s food system.”

Americans’ insistence on knowing what is in their food gave rise to Just Label It, the national campaign to label genetically engineered (GE) food. The National Organic Standards prohibit organic growers and food processors from using GE, but it is now in widespread use on non-organic farms throughout the U.S. A relatively new technology, GE has raised a host of health concerns and led to an explosion in herbicide use (herbicides made by the same companies manufacturing the GE crops designed to resist those herbicides). Despite the risks, the FDA has declared that because GMOs don’t smell, taste, or look different from their conventional counterparts, consumers don’t need to be informed about whether their food contains GE ingredients. Last October, the Just Label It campaign petitioned FDA to require mandatory labeling on GE foods, already required by more than 40 countries worldwide, including all of Europe, Japan, Brazil, Russia and China.

More than 500 diverse organizations – farming, parenting, religious, health, consumer, environmental, and business groups – joined the Just Label It (JLI) coalition as partners. Though they held different views about GE technology, they united behind the common belief that we have a right to know about our food. Consumer support for GE-foods labeling in the U.S. is nearly unanimous, according to the political opinion survey on GE food labeling conducted by The Mellman Group on behalf of JLI. Pollster Mark Mellman said that only topics like motherhood and apple pie muster over 90 percent support, but labeling GE-foods is among them. His survey found nearly all Republicans, Independents and Democrats in favor of labeling. No wonder then that JLI met with groundbreaking success. In just 180 days, it generated more than 1 million petition comments – over twice the number on any food petition in FDA history. This extraordinary win is just part of a much broader push toward transparency in the food system.

People want the truth. They want companies and other institutions to be transparent. This was clearly demonstrated through the rapid nationwide response to Pink Slime, and the surging popularity of the Occupy Movement last summer. Americans of all political persuasions voiced distrust of how government and companies are making decisions. Americans will no longer tolerate keeping the public in the dark for the benefit of just a few.

This emergent consumer movement clearly wants to know about its food. People increasingly want to buy food from sources they know. The number of farmers markets has grown from under 2,000 in 1994 to over 6,000 today. Local food sales are predicted by USDA to hit $7 billion this year. And the organic sector continues to grow.

Fed-up consumers aren’t the only force pushing toward a more organic future. A growing number of scientific studies conclude that to feed the world sustainably and affordably will require looking to alternative systems of agriculture. The National Academy of Sciences examination of agriculture in the 21st century concluded that organic systems and diversified farming systems that mix crop and livestock production are key to a sustainable future. The U.N. Environment Program found that agro-ecological systems can double or triple yields in areas of the world that need it most, like sub-Saharan Africa. Long-term agricultural research trials at Iowa State University have shown that organic crops can produce yields competitive with yields from conventional agriculture, resulting in increased profits for organic growers.

I can happily attest that this is not just the stuff of studies; it has been our very real business experience as well. We have learned that organic was not just better for us and for our consumers – farmers of many of the ingredients we purchase have also benefited from higher yields and reduced fossil-fuel based inputs leading to higher and more stable profits. Working to build our organic future is a quadruple win – for consumers, businesses, the environment and farmers. One of the best examples is the 40,000 acres of organic sugar cane we support in Brazil. Our partners there have found the transition to organic to be both an ecological and a financial success. Their green harvesting practices save 40,000 tons of CO2 per year, and 3.5 million liters of water per hour at the processing mill. The use of organic practices has led to a 90 percent reduction in pest damage, dramatic increases in soil carbon content and an incredible increase in biodiversity. They’ve done all of this while increasing their yields by 10 percent compared to when they farmed conventionally.

As we look toward the next 20 years, we can celebrate organic’s commercial success, growing consumer interest, and proven track record of competitive yields, and work to put an end to the lag in public investment. Just a tiny fraction – less than 2 percent – of all the money the U.S. government invests in public research on agriculture is allocated toward research in organic. Imagine what we could do if we were willing to invest more heavily as a society in expanding organic research.

No one has articulated this as profoundly as HRH the Prince of Wales when he addressed the Future for Food Conference at Georgetown University where I also spoke last spring. He said the system of subsidies “has led to a situation where farmers are better off using intensive methods and where consumers who would prefer to buy sustainably produced food are unable to do so because of the price.” There are many producers and consumers who want to do the right thing but, as things stand, ‘doing the right thing’ is penalized. And so this raises an admittedly difficult question – as the time arrives when a long, hard look is needed at the way public subsidies are generally geared. Should the recalibration of that gearing be considered so that it helps healthier approaches and ‘techniques’? Could there be benefits if public finances were directed so that subsidies are linked specifically to farming practices that are more sustainable, less polluting and of wide benefit to the public interest, rather than what many environmental experts have called the curiously ‘perverse’ economic incentive system that too frequently directs food production?”

I believe that the work ahead is clear. We must create a food system that produces healthy food that is widely accessible and can be produced in a way that protects our environment and enhances consumer confidence. Organic food production will improve farm profits, reduce national health care costs and help to reduce the dependence and the economic drain of inflating fossil fuels. In short, organic food production is national security.

Fortunately, the organic model we’ve developed over the last three decades has given us a running head start; we’re well on our way to creating healthy food, healthy people, a healthy economy and a healthy planet. As I wrote in the introduction to Label It Now: What You Need to Know about Genetically Engineered Foods, “Any chance of avoiding ecological or economic bankruptcy depends on business and government leaders – and, ultimately, every person on this planet – being held accountable for activities that pollute the environment, deplete our natural resources or precipitate health problems.”

As we look back, we can see that the organic industry and movement is one of the most positive and hopeful growth engines in the U.S. economy. As we look forward, to the next 20 years and beyond, I believe that the organic business sector can show America and the world how to create an economically successful food system based on true transparency and public trust.


Article by Gary Hirshberg, co-founder and chairman of organic yogurt leader Stonyfield ( ), author of “Stirring It Up: How to Make Money and Save the World and co-author of Label It Now: What You Need to Know About Genetically Engineered Foods”. Gary is a frequent speaker on topics including sustainability, climate change, the profitability of green business and organic agriculture. He also advocates for change in national food and agriculture policies, including those regarding the labeling of genetically engineered foods. Gary serves on several corporate and nonprofit boards including those of Applegate Farms, Honest Tea, Peak Organic Brewing, The Full Yield, Climate Counts, SweetGreen, RAMp Sports, Stonyfield Europe, Glenisk and the Danone Communities Fund. In 2011, President Barack Obama appointed Gary to the Advisory Committee for Trade and Policy Negotiations, and Gary became a co-chair of Agree ­– a food and agricultural policy effort launched by eight of the world’s leading foundations.

Publisher’s Note: Welcome to the Future

Over the past few years I’ve looked ahead to this special 20th Anniversary Year of the GreenMoney Journal and realized that mostly, we need to talk about the challenges and opportunities in our collective future.

We know where we’ve been, but where are we going? How will sustainable business and responsible investing build better communities, improve our environment and grow a greener economy in the next 20 years?

Will innovation provide abundant renewable energy and clean water while growing more food organically to both feed and improve the health of an increasing global population?

Will Wall Street and Main Street work together to strengthen our economy and create more jobs? Will governments around the world finally reduce rampant debts which are compromising global economic recovery? And how do we encourage (and demand) more disclosure, transparency and accountability in business and politics?

Let’s begin here in the first of two special issues in which several leaders explore the possibilities ahead. The writers include: Barbara Krumsiek of Calvert Funds; Gary Hirshberg of Stonyfield; Cheryl Smith of Trillium Asset Management; and Hal Brill of Natural Investments.

Here on you’ll find additional articles including Megan Epler Wood of Planeterra Foundation on the future of Ecotourism, Don Shaffer on the world of RSF Social Finance, and Terry Mollner on the next generation of investing.

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Finally, because we believe that conferences are key to professional education, we have always offered an extensive online Calendar of Global Green Events. One event we never miss is the SRI Conference on Sustainable, Responsible and Impact Investing. The 2012 conference will happen October 2-4 in Connecticut. Keynote speakers are Dr. Muhammad Yunus, Robert F. Kennedy Jr. and Deepak Chopra. For more information go to

In closing, we value your insights. Please share your reactions to these articles as well as your own thoughts on the next 20 years. Do you have ideas about promoting sustainability and responsibility through conscious shopping, local banking, or using more renewable energy? We will feature them in forthcoming issues.

Again, a sincere thanks to our many readers, contributors, advertisers and sponsors over the last 20 years. Be sure to sign up for our Fall 2012 issue, which contains Part II of this look at “The Next 20 Years.” We’ll be sharing more ideas and articles by Amy Domini, Aron Cramer, Joe Keefe, Lisa Hall, among others.

Remember, now and in the years to come, what you do with your money matters.

Featured Articles

Tessa Tennant, Sustainable Investing Pioneer on Several Continents, Wins Annual Joan Bavaria Award

Tessa Tennant, President and co-founder of The Ice Organisation, has been awarded the fourth-annual Joan Bavaria Award for Building Sustainability into the Capital Markets. The announcement was made at recent Ceres annual conference, which ran April 25-26, 2012 at the Westin Boston Waterfront Hotel in Boston, MA.

“I can’t think of anyone more deserving to win this year’s Bavaria Award,” said Mindy Lubber, president of Ceres. “Tessa is an inspirational leader who has worked tirelessly for more than 20 years integrating environmental and social concerns into investing and business decisions. She has taken Joan Bavaria’s original vision of advancing socially responsible investing and expanded it to the markets in Europe , and now Asia, creating real impact beyond the U.S.”

Tennant co-founded The Ice Organisation ( ), which encourages consumers to purchase more sustainable products and services from a wide range of retail partners, mobilizing mass consumer purchase power to reduce carbon emissions and mitigate the effects of climate change. She also co-founded the UK’s first equity investment fund for sustainable development in 1988, now called the Jupiter Ecology Fund.

She was Chair and co-founder of the UK Social Investment Forum, which promotes responsible investment and other forms of finance that support sustainable economic development. She also co-founded the Carbon Disclosure Project (CDP), which has enabled hundreds of companies and investors to better understand, report on and mitigate risk from carbon pollution and climate change.

In 2001 she co-founded the Association for Sustainable & Responsible Investment in Asia (ASrIA) and remains on the Board. Based in Hong Kong, ASrIA is a leading nonprofit organization promoting sustainable investment practices in Asia, including fostering SRI products and services and providing training, research and other resources.

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The Bavaria Award is presented by Ceres annually to an inspiring leader working to move capital markets toward a system that balances economic prosperity with social and environmental concerns. The award’s name honors Joan Bavaria, a pioneer of social investing who founded Ceres and Trillium Asset Management. Bavaria passed away in 2008.

“Tessa has been instrumental in elevating sustainability as a business and investor issue across the globe,” said Trillium CEO Matt Patsky. “She has created multiple funds and organizations that are driving sustainable investment behavior and having a real impact on business, the environment and the global economy.”

In the early nineties, Tennant served as a member of the UK Government’s Advisory Committee on Business and the Environment, and helped develop HRH The Prince of Wales’s Business in the Environment initiative, which educates senior business executives on practical ways to integrate social and environmental solutions into their business operations. She is also Chair of the Global Cool Foundation. She has served as a World Wildlife Fund UK Ambassador and is a Fellow of the Schumacher Society.

“I’m deeply honored.” Tennant said in her acceptance speech. “This award is as much for the people in Hong Kong at the Association for Sustainable & Responsible Investment in Asia, and for the people in London at the Carbon Disclosure Project and other initiatives I’ve been involved with, as it is for me. Joan Bavaria has been a complete heroine of mine all my working life. She gave me that confidence to just go out and do it.”

About Ceres
Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion. For more information, visit and

About Trillium Asset Management
With a history spanning three decades, Trillium is the oldest independent investment advisor focused exclusively on sustainable and responsible investing. Trillium manages over $1 billion in assets for clients including high net worth individuals, foundations, endowments, religious institutions, and other non-profits. To learn more about Trillium, please visit

For more information
contact Peyton Fleming of Ceres
phone: 617-247-0700 x 120 or cell: 617-733-6660

Common Good Investing – The Next Maturation of Socially Responsible Investing – Part of the Wider Common Good Movement

By Terry Mollner, Chair of StakeHolders Capital

The next layer of maturation of the socially responsible investment movement will be part of a deeper, wider, and more fundamental planetary movement that I am guessing will become called “the common good movement.”

Anytime a group of human beings come together to do something they begin living within some agreements. Obviously, the most basic one is to do something together. The second set of agreements is always the identification of behaviors that are acceptable and not acceptable, usually called “moral behaviors.” All subsequent agreements are within and honor these moral agreements, such as today to not kill, enslave, steal, lie, and have all exchanges be considered fair by both parties.

The Occupy Wall Street Movement is the very raw and deeply serious beginning of a new movement to mature our most fundamental moral agreement.

It used to be that if a group was unable to get their village to agree to change one of its important moral agreements, they went to another place in the forest, or across an ocean, and began another village. That is not so easily done today: television and cell phones are nearly everywhere. Within our developed societies that honor and celebrate individual freedom, people do easily leave any sub-group and start another one, whether it is a new marriage, business, or any other group activity.

However, if they want to bring about a change at the very fundamental level of our moral agreements in one of their large communities such as a nation or the planet, today they begin a movement. A movement has three fundamental stages: 1) outrage to alert people to an immoral social tradition, 2) unilateral action to build support, and 3) legislation as a result of widespread support. 

The initial outrage stage is when a group publicly declares that what has been an acceptable social tradition is now declared to be immoral. For instance, when in the 1950s Rosa Parks refused to go to the back of the bus, the Civil Rights Movement began. It declared that the acceptable social tradition of treating African-Americans different than white Americans was immoral. The second stage was unilateral actions by many: allowing African-Americans to sit anywhere in restaurants, having them appear in television commercials, and allowing them to be on professional sports teams. This built widespread support: to the surprise of many the world did not fall apart. Only then was it possible to pass the first Civil Rights Act in 1964. Two other obvious recent examples are the Women’s Movement and the Environment Movement.

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On the surface the Occupy Wall Street Movement is declaring that the up to now acceptable social tradition of having 1% of the people receive 25% of the annual income is immoral. However, there is the beginning of a deeper and more profound declaration also present: the up to now acceptable social tradition of giving priority to anything other than the common good is immoral. While still honoring and building on individual freedom, it is maturation beyond giving priority to individual freedom. The new freely chosen highest priority is the common good. It is an agreement that not only do we each have the right of individual freedom but that we are also already all in this together and of equal importance.

Instead of polarizing individual freedom with the common good, this new movement unites them into a cooperative whole.

Its new more mature definition of moral behavior is “freely choosing to give priority to the common good.” The new ingredient is that word “priority.” Rather than polarizing them (capitalism verses communism) they have been prioritized. The priority is the common good while at the same time it honors and builds on individual freedom. It does this by having the priority be the result of the maturation of our freely chosen priorities. This occurs by recognizing that when we have our priorities in the order they occur in nature we are able to not only get both fulfilled but also more of both fulfilled. We are all in this together on this small planet; therefore, it is more mature to freely choose to give priority to the common good of us all.

When the Occupiers looked at the way our now global village is organized, they saw that our main institutions do not honor this more mature definition of moral behavior. When they looked at the world’s 200 nations, they saw that each was giving priority to its own citizens. That is immoral according to this new definition of moral behavior. When they looked at the corporations, they saw that they were giving priority to the financial interests of a few, the shareholders. In this new era that, too, is immoral because the highest priority is not the common good of us all. When they looked at the politicians, they saw that they tended to give priority to those who gave them the most money to get and stay elected. Similarly, when they looked at the special interest groups, they saw that they gave priority to their one issue. Both of these also are considered immoral in this new era since they are also not giving priority to the common good. Thus, since it did not make sense to join any of these existing institutions, they focused on the other logical option: they started from scratch to see if they could fashion this more mature moral society themselves, in their tent cities. Because of the now hyper-connectivity of the planet, within a month millions of people around the world ran out of their houses, organized support demonstrations, and built sister tent cities. Clearly a new global movement had begun.

The second stage will be unilateral action to build support for this maturation of our most fundamental moral agreement. It will be the formation of new organizations of every kind in the private sector that people can join or leave at anytime (they have to build on individual freedom) that give priority to the common good, not their members.

There will be a re-villaging of people’s lives in a modern context (by agreement rather than living in houses next to each other) to enjoy each other more. They will also make it possible to do a better job of supporting their marriages and raising their children to full human maturity before they leave their teenage years and marry.

They will build businesses of all shapes and sizes that not only give priority to the common good but also build associations of these businesses to finance the transition from classic and all forms of new capitalism to common good capitalism. These companies will primarily cooperate, most particularly by forming agreements among competitors to raise the social level playing field and secondly compete with each other. They will permanently set aside 10% or more of their annual net profits and invest it in some of the many common good investment funds. These funds will mainly buy companies and convert them to common good companies that also put a cap on the return on equity appropriate for the risk involved. They will also permanently set aside the annual excess and also invest it in common good investment funds. Since the highest priority of all of these investment funds will be the same, the common good, they will easily form joint ventures to buy very large companies. In this way, and in a way that fully honors individual freedom and free markets, the world will rapidly self-finance its maturation into common good capitalism. In the same way that companies have embraced civil rights and environmentalism, this will become such a widely supported movement that companies will either have to convert to be common good companies or they will face competition that will make it difficult for them to survive.

Rather than a war of the ballot box, a new more mature form of democracy by representatives from throughout the community will emerge. It will be based on a cooperative search for more mature truths, and the building over time of widespread support for them, to guide the community. They will probably initially have no legal power but operate as a parallel form of democracy and become the most respected organization in the community, the equivalent of an elder body only of people of all ages.

Finally, there will certainly be the emergence of an additional nation based on agreement rather than geography that anyone can join or leave at anytime. Just as we currently vote in our towns, states, and nations, we will also vote in this nation. It will be very appreciated by the geographic nations because it will only attend to things not being done by or well enough by the geographically defined nations. Its highest priority will be the common good of us all; and donations or fees, not taxation, will cover costs. People will mature into giving priority to this nation by agreement because the priority is the more mature priority, the common good.

Much more will emerge, including of course a common good investment movement. It will be for people who only want to invest their capital in companies that are common good companies or moving in the direction of becoming common good companies. These will be companies that, at a minimum, have publicly declared that their highest priority is the common good and their second priority is profit or anything else. We will still be concerned about the checklist of behaviors that evidence this priority – for instance, good relationships with their employees, community, and environment; but our primary concern will be if it is a full member of this movement to common good capitalism.

Maturation is the fundamental cooperative process in nature. Even Edward O. Wilson, who is the 81-year-old two-time Pulitzer Prize winning Harvard professor also known as “the second Charles Darwin,” has recently declared in the August 26, 2010 cover story article in Nature that cooperation not competition is the fundamental process in nature. Cooperation is when the parts give priority to the whole. Although he does not take the next step, the logical conclusion is that he has declared that the universe is an indivisible whole. This is the same fundamental assumption of our beloved spiritual teachers throughout the ages.

If the universe is one indivisible whole, then what we currently assume is true of all the parts of our body – that when healthy they each give priority to the whole – is also true of our relationships with the entire universe: it is natural for us to mature to where we “freely choose to give priority to the common good of us all.”

The movement to mature beyond giving priority to paternalistic systems, like communism, and systems that give priority to individual freedom, like democratic capitalism, is here. We will be part of it and our part will probably be called “common good investing.” Now, instead of focusing on the secondary priorities of companies, we will focus on the highest priority. Also, instead of asking them to mature we will be focused on taking action to replace them if they do not mature.

Our main question will be, “What is your highest priority?” If they say it is anything other than the common good and our maturation of what we agree is the common good, they will be in one camp. Those who agree to give priority to the common good, and back it up with a common good audit by a respected third party, will be in the other camp. Increasingly the public will know which camp a company is in and only support those who are in the common good capitalism camp. A list of socially responsible concerns will no longer be sufficient. We will insist in knowing how they prioritize them. Prioritization is the thinking framework that will define this new era.

Politicians always get in front of whatever parade is going down Main Street. Thus, legislation in support of this will eventually emerge. However, this movement does not need it. Rather, it is fully understood that these more mature organizations must emerge within the private sector so they are clearly based on individual freedom.

And what is the common good? As mentioned earlier, we know the current minimum agreements such as to not kill, enslave, steal, lie, and have all exchanges be considered fair by both parties. However, our common good agreements are consistently maturing, usually through movements such as the Civil Rights, Women’s, and Environment Movements, that accept the responsibility for assisting us all to mature our moral agreements, our common good agreements.

Moral behavior cannot be legislated. It is not possible to pass legislation to have the unique act of each person each moment give priority to the common good of us all.We can only pass laws that encourage people to do things or punish people for not doing things.

In addition, maturation is an inside job; no one can make us mature or mature for us. Thus, giving priority to the common good is an honoring of this process and the commitment we each have as part of being a member of society to give priority at all times to what is best for us all. This, of course, includes participation in our maturation and the maturation of our common good agreements. Our current moral agreements are different than they were thousands of years ago and they will be different thousands of years in the future.

In any society, no one can excuse another from or be excused from honoring our moral agreements, our agreements on what is acceptable and unacceptable. Today, because we have divided our organizations into for-profit and non-profit organizations, some for-profit companies thing they have been authorized to be exempt from this moral obligation. That is not true. That is simply how they are structured relative to each other. In this new common good era it will be clear that no one can excuse another from or be excused from honoring our moral agreements. These will be companies that

The common good movement is here. The common good investment movement will soon be here as well.

Article by Terry Mollner, Chair of StakeHolders Capital, Inc. in Amherst, MA (, is one of the founders and member of the board of the Calvert Social Investment Funds ( ) and the Calvert Foundation ( He is also a member of the board of Ben & Jerry’s ( and chair of Trusteeship Institute, Inc. (

Special CEO Report – Adjusting to a New Norma

By Don Shaffer, President & CEO of RSF Social Finance

Recently, I met with an organic food entrepreneur at a large trade show in Anaheim, California. This entrepreneur, who is seeking a loan from RSF Social Finance to expand her business had just been interviewed by a journalist. She introduced me to the journalist, and could have talked about what we do at RSF – as lender to many leading organic food companies: Numi Tea, Happy Family, Mary’s Gone Crackers, Late July, Revolution Foods, Guayaki, etc.

Instead, she talked about how we do it – our unique approach to working with money.

“It’s not just about getting more funding to great entrepreneurs like me who are changing the world,” she said. “RSF is actively creating a whole community, connecting entrepreneurs with each other, investors with each other, entrepreneurs with investors – making the process much more direct. It is so old-school, I love it!”

This was music to my ears.

This is part of what differentiates RSF from a commercial bank or any other financial intermediary. It boils down to this:

We have found that if participants in a financial transaction can be more visible to each other – if they can understand each other’s needs and intentions, and sustain a personal connection whenever possible – then risk decreases and fulfillment increases. We believe this is nothing less than an antidote for the adverse impacts of modern finance.

But let’s step back and acknowledge the systemic problem first, because it is huge. For most of us, we simply don’t know where our money is going anymore; we are almost completely disconnected from the real consequences of our economic and investment activity.

As a result, we are experiencing a multi-layered spiritual crisis. Not only are natural resource depletion and climate change creating anxiety, not only is severe income inequality creating conflict, but we must now also come to grips with the fact that until many of us make significant changes in what we buy, where we bank, how we invest…we are all contributing to these problems.

A Few Things to Consider

Regarding banks, our policies are enabling a small number of multinational corporations to control an entire sector of the economy. This runs against all the ecological principles we know: that any living system gains strength and resilience to the extent it is diversified and de-centralized. It also runs completely counter to the American spirit of entrepreneurship. The recent bank bailout amounts to privatizing profits and socializing losses for big corporations.

And each quarter brings increased levels of volatility in financial markets. We continue to see problems with high frequency trading and liquidity shortfalls that lead to dips in the market that then send investors fleeing due to a lack of understanding and fear.

One could argue that an individual investor with a long-term buy-and-hold approach does not need to be as concerned about these short-term issues, or that increased regulation will mitigate the problems. I would posit that we can’t count on the regulators. The financial services industry spent $2.3 billion on federal lobbyists between 1990 and 2010, more than the healthcare, energy, defense, agriculture, and transportation industries combined.

A New Normal

At RSF ( ), we believe we have entered a ‘new normal’ economic period that may last for a long time. For individuals and families this means more saving, less debt, and less purchasing of non-essentials. For investors this means lowered expectations of financial returns.
We believe this long-term trend is good. We believe it is healthy to have less consumer debt and spending on non-essentials. We also believe it is rational for investors to expect lower returns. We believe the 60-year period following World War II will be viewed as a historical anomaly, in terms of artificially high investor returns.

Within the next ten years, we believe that new measures of wellbeing and quality of life will begin to be implemented in major countries like the U.K., and will rival GDP as the predominant metric of economic health. In addition, we have already begun to see that the B Corporation and other hybrid corporate forms are going mainstream; social and environmental impact assessment are becoming standard practice for leading companies; and these companies are starting to receive increased investment.

Finally, we believe our centralized global economy dominated by large transnational corporations will begin to be supplanted by a network of diversified regional economies, where small-and-medium-sized, triple-bottom-line businesses produce the most jobs and hold the trust of their communities.

In order for this transition to happen in a timeframe that meets the urgency of our current situation, we need to provide the right kinds of support to those who are on the leading edge of this shift: promising social enterprises and the networks facilitating their development (BALLE, B Lab, etc.) need sufficient funding; and individual investors and donors who are challenging conventional investment practice and philanthropy need opportunities for experimentation and learning, including strong networks like Slow Money and Toniic.

RSF’s Future: Integrated Capital and Regional Food Systems

A powerful role for RSF is emerging: to use our unique ‘integrated capital’ approach to create diversified regional food systems based on organic & biodynamic agricultural practices.

At our 25th anniversary celebration in September 2009, we convened a group of social finance leaders who said, “If we get food right, everything else will follow.” Our clients are increasingly asking for us to do more in this area. And we have a long track record and deep networks in sustainable food and agriculture, in addition to the foundational basis in Rudolf Steiner’s work with biodynamics and associative economics.

In many ways, food is the root system within a healthy regional economy, and the local food movement has gained incredible momentum over the past few years.

There are a multitude of projects that need investments, loans, and grants within the food sphere: growers, processors, distributors, retailers, and value-added product companies. We can also define agriculture to include any product that is grown, harvested, and processed directly from the earth: fish, textiles, forests, water & land itself, etc.

In the past two years, RSF has supported efforts to bring healthy food to underserved populations using the following different types of capital:

  • Seed Fund: Grant to an organization called Community CROPS in Lincoln, Nebraska that provides farming instruction and English language training for new immigrants.
  • Shared Gifting Fund: Grant to Movement Generation’s justice and ecology project that offers permaculture courses tailored to meet the needs of local grassroots organizations in communities of color.
  • Donor Advised Funds: $3M fund recently established to support regional food processing and distribution. One of the first grants will support the Great Lakes Food Hub Network, which works with African American farmers and local food hubs.
  • PRI Fund: Loan to Hana Health in Maui, Hawaii. Hana is a community made up of mostly low income native Hawaiians. Hana Health operates a six-acre diversified organic farm, profitable farm stand, and health clinic with a mission to encourage preventive healthcare through nutritious food.
  • Social Investment Fund: Loan to Guayaki Yerba Mate, which imports organic, sustainably grown yerba mate from South America. The company’s mission is to restore 200,000 acres of South American Atlantic rainforest and create 1,000 living wage jobs by 2020.
  • Mezzanine Fund: Loan to Dancing Deer Baking Company, which provides jobs to low income residents in Boston, MA. The company seeks to sell their organic cookies and brownies in mainstream grocery stores at an affordable price point.
  • Liquidity Portfolio: Certificate of Deposit with Southern Bancorp, which operates community banks and development organizations that work together to promote comprehensive development in the Delta region of Arkansas and Mississippi. They support farmers and value-added food products; 75% of its loans are for $25,000 or less.
  • Impact Portfolio: Equity investment in Elevar, a unique microfinance fund working in India, South America, and Africa that keeps a much higher percentage of investment returns circulating in the local economy through technical assistance and other related services; many of those served are agricultural enterprises.
  • Transformation Portfolio: Loan to Corbin Hill Farm, which has grown its CSA from serving 200 families to over 1100 families since we made the low interest loan. This CSA has taken on the challenge of exclusively serving low-income families in Harlem and the South Bronx.

Using this integrated capital approach (coordinated investments, loans, and gifts to address a particular problem) coupled with targeted sponsorships of the networks and conferences that support social enterprises, we have become an important contributor to a rapidly-transforming food system. Stay tuned for more innovative ways that we are going deeper with this strategy. In the spirit of co-creation, please let us know if you are interested in working more closely with us in this area.

Article by Don Shaffer, President & CEO of RSF Social Finance

This article was originally published in the RSF Quarterly (Spring 2012). Reprinted with permission. Get a copy of the complete Spring issue at-

Megan Epler Wood - Cambodia

The Future of Ecotourism

By Megan Epler Wood, Epler Wood International

>> Back to January 2020

(Reader Favorite from Summer 2012)

Twenty years ago travelers were just beginning to think about the environmental impacts of their tours. Ecotourism became a catch-all term in the 1990s for making travel environmentally beneficial, and it was frequently cited as the fastest growing phenomenon in travel. Journalists tended to run with any reasonable stats they were given on this growing market, but the fact was that truly responsible travelers were a rare breed. It has taken 20 years to take this phenomenon mainstream!

Ecotourism was defined by The International Ecotourism Society (TIES) in 1990 as responsible travel to natural areas that conserves the environment and sustains the well-being of local people. As the founder of TIES, I found this basic definition a vital tool to manage perceptions of what tourism’s impacts are, how we might manage it differently in the future, and how to ask the industry to put a higher value on conserving the landscapes, wildlife, parks, people, monuments, and cultures that make their businesses possible.

Once I saw travel not as just a personal experience, but a way to touch the global community and help promote positive measures for conservation and sustainability, it became impossible to look back. Ecotourism influences a broad global dialog on the sustainability of travel which even led to a United Nations ecotourism summit in 2002. But for me the growth of the tourism economy has been the most important fact to help the global community understand its potential for good and the need to arrest the bad. This huge industry now generates over 10 percent of the world’s gross domestic product. And for 83 percent of countries in the world, tourism is one of the top five sources of foreign exchange.

Travelers are branching out around the planet, and the Internet makes it possible to book in any country, at any time. Volume continues to go up worldwide, and developing countries are seeing enormous growth. Tourists now spend over $200 billion annually in emerging market nations. No other sector spreads wealth and jobs across poor countries like tourism does, but no other sector grows with so few controls.

Vulnerabilities to the economy of tourism are always there. Security risks can cause drastic downturns, armed conflicts destroy tourism markets, and rising oil prices hit fast and hard. All of these factors will affect ecotourism in the next 20 years. I just returned from Egypt, and due to the current news cycle featuring some political unrest, tourist volume is down over 50 percent. This drastic reduction in sales is painful; huge investments are lost, and local businesses lay off workers. The harsh reality of a market-based product cannot be softened. No matter how one wants to present tourism as a positive force for sustainability, it is still a global market that cannot be controlled.

The profile of the ecotourist is changing rapidly. It was once assumed that the ecotraveler was a foreign visitor to exotic locales, dressed in khaki and ready to view wildlife by day and sit by campfires at night. Now, the ecotraveler has many profiles. Throughout the world, ecotravelers often visit rural and exotic locales in their own countries. Brazilians from Sao Paulo are a major market for parks in the beautiful mountains of Minas Gerais. Travelers from Dhaka in Bangladesh are the major market for the parks and reserves on the Bay of Bengal. Indian and Chinese travelers are a growing force in their domestic destinations. Ecotravel is no longer a reflection of a colonial past, it is a highly globalized market. It is dependent on neither backpackers nor luxury safari enthusiasts, but is a full spectrum of nationalities and demographics representing all ages and incomes.

El Rosario Mariposa Monarca - Epler Wood Int - GreenMoney Journal
El Rosario Mariposa Monarca, courtesy of Epler Wood International

In the last 20 years, sustainability and the environmental management of tourism have become a greater focus of the largest tourism corporations on earth. Systems to manage hotel waste, water, air quality, and energy conservation are standard procedure now among most major hotel brands. Travelers may see only that they are being asked not to waste their sheets and towels, but behind hotel walls, efficient systems for lighting, heating and air conditioning, and water conservation measures are being installed across the globe.

Ecolodges, once a rare phenomenon, have become a strong market trend worldwide. Frequently designed by inspired architects; ecolodges set the standard for environmentally sustainable lodging, using renewable energy, reducing waste, composting, growing their own organic gardens, and avoiding the destruction of native vegetation. Dozens of independent lodges now operate in the globe’s beauty spots, from Caiman Ecological Refuge in the Pantanal of Brazil to the Kosrae Village Ecolodge and Dive Resort in Micronesia. Tourism and travel awards are frequently given to chains of ecologically managed hotels that take their cues from the ecolodge movement, such as Six Senses, which operates in Thailand, Vietnam, the Maldives and Jordan. This company builds lodges using local sustainable sources wherever possible and serves organic food, helping travelers to appreciate the “slow life.”

There have been many global gains for ecotourism, but when it comes to aviation, we are talking about one of the most carbon intensive industries in the world, not an ecological strong point of this industry. The global aviation industry presently accounts for three percent of carbon emissions worldwide and is rising fast. With all known measures, including improved efficiency, emissions will nevertheless be up 175 percent in the next 20 years, particularly because of ever increasing numbers of long haul flights. At present, the EU is mandating carbon trading for aviation, but the global airline industry is fighting this tooth and nail. It seems few are worrying about the environmental threats of global aviation, so initiatives to manage the carbon impacts of air travel are difficult to advance.

Making ecotourism a genuine tool for conservation of the world’s ecosystems is a battle which never flags, but also never receives the needed unconditional support. For example, travelers without question are ready to pay for entrances to parks, and foreign visitors are frequently prepared to pay more than they do. Yet parks and protected areas around the world have been extremely slow in adopting measures to be certain tourists pay what is really required. How many times do travelers enter parks around the world without knowing how to pay? Ecotourism in the next 20 years must be a primary source of revenue for parks, and ecotravelers will be ready to pay.

Sri Lanka ecolodge site, courtesy of Epler Wood International

Historic monuments also suffer greatly from a lack of wise management. In the Valley of the Kings in Egypt I was lucky to visit when few other travelers were present, but I was told that there are no limits on the numbers of visitors entering the ancient tombs, which are among the greatest monuments of human civilization. When I questioned whether there might not be a system to implement limits in the future, I was told I was dreaming. If Egypt or Cambodia or any other nation with major monuments cannot control visitor volume, the future of ecotourism is compromised. Traveler overload will damage these sites and they may eventually have to be closed. However, managers of Macchu Picchu in Peru have come to terms with this problem and set out a permit system to control the number of trekkers on the Inca Trail. Through this type of volume management, we can hope that ecotourism will be a positive for the world’s important monuments.

Travel suppliers are increasingly diverse. Small communities across the globe have sought to join the travel economy. We now call this community-based tourism. But often local communities do not offer the quality that travelers can embrace, and as a result do not find ready buyers. Helping these businesses has become an agenda for the ecotourism world, and investments in local community-based providers can help local people to maintain cultural roots and protect their environments.

In my current work, as the head of the Planeterra Foundation ( ) we are investing in local community providers throughout Latin America. We are presently helping Mayan women in a small village on Lake Atitlan in Guatemala to build improved home-based accommodations. As travelers visit the community’s art and handicraft workshops, medicinal herb gardens, and tree-planting ceremonies, tourism is making a positive contribution to the community and creating a living example of the benefits ecotourism can generate. Planeterra can ensure these small businesses get a real market, as we are the foundation for G Adventures, the largest adventure travel company in the world. Wherever Planeterra invests, we work with G Adventures to be sure their passengers enjoy these wonderful authentic experiences that genuinely benefit local people.

Ecotourism has built an influential market base which draws customers committed to a green economy. Its market potential is not limited, but the resources upon which it depends are. One of the biggest issues with providing ecologically sound tourism will be the management of landscapes and regions where tourism has taken off. Authorities rarely have the knowledge to implement smart growth strategies, and the landscape quickly becomes overcrowded with hotels, restaurants and services for travelers. As tourism fans across the land, local services are frequently not provided to local workers who live without basic sewage treatment, fresh water, health services or adequate education for their children. It is difficult to advocate a more ecological future for tourism if basic sanitation and human needs are not met.

The Planeterra Foundation has developed a system for governments to track the impacts of tourism and make better decisions on the investment required to manage tourism. This system, already tested on Ambergris Caye in Belize, is being implemented further by the Belize Tourism Board and plans are now being made to work with other governments to help local authorities develop destination management systems needed to arrest unplanned growth.

What the ecotourism experience will be like in 20 years depends on the commitment of governments to create well-planned destinations. Without local planning, ecotourism could easily be just another problem on the landscape. Local people are increasingly recognizing that they need to protect their resources. What local people do to preserve their destinations must be a high priority for the future of ecotourism.

In Egypt I traveled to the Western Sahara. After one night in the large oasis of Bahariya, four hours west of Cairo, we had a soak in the crystal oasis waters and afterwards ate lunch in a simple building, decorated with local handicrafts and rugs, served by local guides. This was one of those authentic meeting grounds, where locals and tourists enjoy the same laid back experience of being away, sharing each other’s cultures, eating local foods, enjoying interesting indigenous handicrafts and honoring the beautiful place they are visiting without artifice. I found myself loving the Sahara desert, its timeless beauty, and the fun-loving nature of our local guides. I relaxed, got into the groove, and thought to myself, this is the future of ecotourism!


Article by Megan Epler Wood, who founded The International Ecotourism Society (TIES) in 1990, the oldest and largest non-profit organization in the world dedicated to making ecotourism a tool for sustainable tourism development worldwide. Since 2003, Megan’s firm Epler Wood International  has devoted itself to aiding some of the poorest countries in the world with sustainable tourism development. Megan is presently the Co-Executive Director of the Planeterra Foundation where she is leading a global effort to scale up the community and environmental benefits from sustainable tourism. 

Featured Articles, Food & Farming, Sustainable Business

The Next 20 Years of SRI

By Cheryl Smith, Managing Partner of Trillium Asset Management

Over the past 20 years, U.S. assets invested using a Sustainable and Responsible Investing (SRI) framework have increased five-fold, from $639 billion in 1995 to over $3 trillion in 2010 according to the Trends Report from the US SIF. Concomitantly, institutional investors worldwide now recognize the efficacy and legitimacy of the incorporation of environmental, social, and governance (ESG) factors in investment analysis.

The use of environmental and governance factors is widely accepted as a tool in investment analysis, and is spreading from its original home in long-only equity strategies of the activist and SRI community to additional investor groups, asset classes and strategies. The use of environmental and governance factors is becoming more widely accepted, even on Wall Street. Over the next 20 years, we must shift the focus of sustainable and responsible investing to the context within which companies operate: their competitive environment, their implicit or explicit license to operate, and the ways in which corporate actions, influence, and power change social and political systems.

Our goal as investors is to use the ownership of capital to create sustainable communities, and more broadly, a sustainable world. Sustainability is the capacity to endure, and hopefully to flourish, over time. In a human context, it is the potential for long-term maintenance of well-being; it therefore must take into account both short term and long term viability. Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs, and balances current and future needs and growth.

Sustainability-motivated investors begin with the premise that traditional methods of investing neglect a critical aspect of the investment decision: investment creates ownership, and ownership of capital implicates the owner in all of the activities of the companies owned, including their product, their environmental impacts, governance, labor practices, and participation in the economic and social structures of the countries within which they operate. Initially, investors focused on a fine-grained analysis of companies: what does THIS particular company do, how do they do it, what effects do the company’s actions have, and do we as investors want to participate in those actions? Or can we, as active owners, induce a change in the company’s actions by engaging management and other shareholders? While this approach has led to significant changes in corporate behavior, it is limited to company-by-company actions, and reinforces the belief that the sole guideline/measure/responsibility of corporations is to the rate at which they return profit. It does not address the disconnect between the primary goal of corporations, which is growth, and the reality of finite limits imposed by nature. Without changing the competitive milieu within which corporations operate, we can’t create true change, because the competition between companies continues to reproduce the behavior. We must now move the locus of sustainable investing from the actions of individual corporations to the role of corporations in the broader global society and economy. To do so, we must broaden our tools to include analysis and advocacy for policies, laws, and regulations that create a competitive environment consistent with sustainability.

For true sustainability over time, a community must have economy, equity, and ecology all in balance. Economy balanced with equity, so that economic growth benefits all members of a community, but allows for enough difference in outcome to encourage effort and risk-taking.

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Ecology balanced with equity, because widespread poverty leads to exploitation of natural resources and common areas, devastating ecological systems. Ecology balanced with economy, so that the wise current use of resources is counterpoised with the preservation of potential future growth. These three elements of a sustainable community play out over different time horizons.

Economic factors play out over very short periods, such as business cycles and financial crises, and also over long periods. Economic development and rapid growth can create wrenching social and environmental changes, such as the industrial revolution in England, rapid urbanization in developing countries such as Brazil, India, and China, and widespread clear-cutting of tropical forest land for cash crop cultivation. The limited liability, multi-owner, independent and separate legal entities known as corporations speed up the pace of commercial and economic growth, since they streamline the purpose of business: they abstract business from a concrete focus on WHAT is produced and move the focus to the overall rate of profit growth, simplifying corporations’ ability to change product lines and businesses. This simplification has jump-started the speed of economic growth – and exacerbated the issues of inequality, uneven growth, and ecological limits.

We can make this happen: change can be sharp and sudden. Significant social and economic change seems to happen in lurches, fits, and starts, through upheaval and cataclysm, and not in a smooth and continuous pattern. In just 12 years, the US moved from shock over the 1957 Sputnik launch to the 1969 Apollo 11 moon landing. Over the past 20 years, the development of widely-available internet access and the ensuing explosion of information and connectivity have transformed the social, commercial, and technological lives of people throughout the world. Established pathways for the dissemination of information have been upended. Recent events have demonstrated the power of instantaneous and open communication and its ability to topple political regimes. At the same time, the information and communication explosions have set the preconditions for sustainable investing. Information about what corporations do and how they do it has become much more widely available. At the same time, investors’ abilities to communicate this information have grown exponentially.

We’ve done a good job in getting corporations to grow. We’ve done an OK job in getting companies to recognize environmental issues, primarily by working together, by creating multi-stakeholder coalitions. Shareholder concern about environmental issues is now established as an appropriate area of inquiry. Management of climate risk is now a established best practice: with Board oversight, leadership by CEOs, compensation incentives for effective management, greenhouse gas emissions reporting and target setting, and the search for profit opportunities in a carbon-constrained world. At the same time, pressing environmental constraints are becoming more evident, including growing levels of greenhouse gasses, climate change, and re-emerging clean water scarcity. History shows us that when environmental constraints are binding, they can be extremely binding, in the form of famine, catastrophic crop failure, and disease, such as the Irish potato famine. Medieval historians have given us evidence of the role of overcrowding, poor nourishment, famine, and chronic malnutrition in the devastating impact of the Bubonic plague in 14th century Europe. Against such a history, the need for cooperation and responsive behavior is compelling.

The missing piece in sustainability discussions to date is the equity, or social dimension. Environmental issues, environmental degradation, and political instability are tied to poverty. Female literacy is tied to economic growth and economic progress. Ever-growing income and wealth inequality leads to economic stagnation. Inequality, and the ensuing widespread poverty, drives poor economic performance. We’ll make no progress on solving these issues unless we begin to recognize the interdependence of economic and social conditions, and stop treating them as separate issues. Human rights, political rights, and intra-country conflicts are inseparable from the economic welfare of the mass of the population.

The next 20 years will witness the increasing importance of the social component of environmental, social, and governance factors triad. Over the past 10 years, we have seen flashes – that could still be ignored – of the importance of poverty and income and wealth distribution in shaping geopolitical outcomes. The United Nation’s Millennium Development Goals, aimed at reducing world poverty, recognize the interdependence of environmental sustainability, transparent financial, trading, and business governance systems, and social outcomes such as gender equity, maternal and child health, and universal education, with a special emphasis on female literacy. The thriving global corporation of 2032 will recognize that its continued successful existence depends upon addressing critical supply chain issues, and that its ability to grow depends upon an expanding consumer market. The attractiveness to a corporation of shifting production to any location depends upon the education and basic health of a country’s workforce, the existence of a supporting infrastructure, access to clean water, and cooperation and partnership with national governments. Ever growing levels of income and wealth disparity limit the potential for sales growth and the expansion of markets. Further, continued economic prosperity, at the crudest of levels, depends upon political stability. The Arab Spring was initiated by the actions of a single Tunisian fruit seller, self-immolated in response to poverty, corruption, and harassment by local political authorities. In the US, the Occupy Wall Street movement expresses the frustration of a broad spectrum of society, the 99%, at income and wealth inequality. Investors ignore this information at their peril.

How do we as investors address the social and equity dimensions? We must adopt a broad systems perspective and consciously address the role of policy. How do the rules, regulations and policies in each separate national economy influence corporate behavior? What leverage, for good or for ill, do corporations that span national borders have over national economies and governments? How do we shape the rules and the context within which corporations operate? The next 20 years will not be about the HOW of what we do – what asset classes, what tools, what metrics – but about the WHY – how do we create a policy environment that creates a level playing field, that establishes the economic conditions for continued, but measured growth with widely dispersed benefit. How do we set a policy framework in which corporations are not determining political outcomes? While rampant pursuit of profits may be appealing in the short run, it is the ideology and logic of the cancer cell: growth at all costs, leading to the ultimate death of the host. Our challenge is to develop a framework of cooperation and regard for the general social welfare to counterbalance unlimited growth.

Article by Cheryl Smith is managing partner, chief compliance officer, and investment manager at Trillium Asset Management, LLC. Cheryl served on the Board of US SIF for six years; for three of those years she served as Chair. She is currently on the Board of Oikocredit USA, the US arm of Oikocredit, a worldwide organization empowering disadvantaged people with credit. She is a Chartered Financial Analyst charterholder and a member of the CFA Institute and a member of the American Economic Association. She holds a B.S.F.S. degree from Georgetown University School of Foreign Service, and a Ph.D. degree in Economics from Yale University.

Article Information

Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. This piece is for informational purposes and should not be construed as a research report.

Should you have specific questions regarding Trillium’s products or services please visit our website at or call us at 617-423-6655.

Resilient Investing: SRI’s Evolutionary Path Through Precarious Times

By Hal Brill, Managing Partner of Natural Investments

It is with much warmth and gratitude that I offer these thoughts as we sail into a future that will confront us with unfathomable changes. Cliff Feigenbaum was my roommate at the 1992 SRI in the Rockies conference, and although the difference in the length of our hair made us appear quite the “odd couple” (which years later led to an interesting experience years crossing the Canadian border to another conference – but that’s another story!), we became fast friends and helped each other grow professionally, culminating in writing the “Investing With Your Values” book together. So I’ll start with a hearty high-five, GreenMoney Journal!

Cliff has rewarded our friendship by giving me the impossible assignment of envisioning the future of Socially Responsible Investing as our planet takes its next 20 orbits around the sun. Given the precarious state of our society and economy, how will our field evolve?

The inspiration for SRI (the original acronym now reworked into Sustainable and Responsible Investing) has been told many times. It springs from the simple but profound realization that what we do with our money matters. It matters a great deal. People innately have the “natural” desire to walk our talk, to align our actions with our values. My father Jack Brill’s first book, “Investing from the Heart”, written an appropriate 20 years ago (1992) was very much about that – encouraging investors to seek out investments that they could feel good about while still investing wisely. Cliff and I later coined the term “natural investing” to contrast with traditional, “unnatural” investing, which dismisses all but financial metrics.

This worked well for the true believers, but we needed to offer reassurance that investing this way was not lunacy, and, we needed a lot more investment options than the 12 SRI mutual funds that we could find to profile back in ‘92. Voila, the roaring 90’s and traumatic 00’s brought us tons of new funds. Solid tools like the Domini Social 400 Index and the Moskowitz Prize have given us some real gravitas in the investment world. SRI financial advisors could now talk to clients with confidence, showing them that not only was it possible to construct an entire diversified portfolio of SRI investments, but that their financial performance would be competitive. Two other legs of the SRI stool – shareholder activism and community investing – have grown in clout, changing corporate behavior and strengthening local economies.

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Looking forward, I resonate with the evolutionary worldview that the integral philosopher Ken Wilbur has mapped. We’ll grow something like a tree, where the early branches get thicker and more solid, but up top there is new growth that is seeking out the light and weathering the storms. Wilbur calls this “transcend and include”. We’ll continue to deploy the well-tested strategies of screening and activism, but the leading edge of investors will be innovating at a furious pace. We may even see some cloning, where branches break away from the old SRI tree and start their own forests. We’re already seeing this with “impact investing” and “local investing”.

Books on each of these topics have come out this year; the authors helping to carve out new niches. Some are trying to distance themselves from SRI in a way that feels a little like teenagers asserting their independence from their parents; but this is a natural part of the evolutionary process. Both of these branches will continue to grow because they are tapping into impulses that have not been seen at the forefront of SRI, even though they are in fact integral components of what we already do.

Here at Natural Investments, we have been pondering the directions that SRI will take, given the precarious state of our economy and planet. We’ve been squeezing in some time to write a new book for 2013, tentatively titled “The Resilient Investor”. In it we assert that investors should engage in the practice of “scenario planning”, looking at how the world might change and how to be prepared for a wide range of outcomes. We know that the future can’t be predicted, but we think it’s essential to explore the possibilities of where we might be headed, and then design one’s portfolio based on one’s view of the world. Our most exciting discovery is that the tools pioneered by SRI are of utmost relevance for any investor wanting to prepare for multiple scenarios.

One possible scenario is that there could be some sort of systemic failure of our ecological, social or economic systems. The dystopian blockbuster Hunger Games paints a stark picture of what such a world could become. But the belief that things are heading downhill is far from limited to sci-fi writers; many of our most progressive voices have long warned that we need to be prepared to live in a world that fails to deliver the goods in the ways we’ve become accustomed to. Portfolio 21 has produced an educational piece called “Peak: Investing at the Edge of Ecological Limits”. The proposition that exponential economic growth can continue indefinitely on a finite planet is now being addressed head on by a few mainstream investors such as Jeremy Grantham.

If you can imagine that this “breakdown” scenario has at least some possibility of occurring in the next 20 years, then what sort of financial moves could you take to prepare? You’ll be procuring more of your basic needs from the local economy; community investing is a way to strengthen your personal support system. Converting some of your financial assets into tangible assets, such as renewable energy systems and food production, would be a prudent move. Devote more of your time to getting to know your neighbors and working towards “Transition Town” strategies, and expand your own skill set so you’ll have more to offer the community.

On the other hand, the global economy has shown amazing resilience through the years. Many of us who thought the whole thing would collapse long ago are still amazed that the world keeps muddling along. The consensus is that we won’t be eating our neighbors to survive – we’ll find a way to live within our limits and be wise enough not to destroy our society.

In the “muddle through” scenarios, the traditional tools of SRI make the most sense. You will want to participate in the global economy, and you’ll want your money to earn a market rate of return. SRI can do that! An enlightened investor will realize that there are two scenarios for muddling. We can limp along with a downwards bias (“muddle through DOWN”), or we can “muddle through UP,” using the SRI tool chest to forge a healthier world that provides for the needs of all people without destroying the planet. To move up, it’s imperative to engage in shareholder activism, as well as policy work to bring about a more just and sustainable economy. (Thanks to The Forum for Sustainable and Responsible Investment [ ] for stepping up to this role!) SRI’s most high-profile tool, screening investments for various social/environmental criteria, is due for an upgrade. By 2032, we will have outgrown today’s ESG metrics that measure environmental, social and governance factors. It is necessary to go further by looking at the core mission of companies, and develop methodologies that identify and reward innovators who are raising the bar, while moving away from companies who may have good practices but whose products and services are not raising the bar.

The fourth scenario can be the most difficult to imagine, but also has to be given a certain probability of occurring. What if humanity rises to the challenges of our times and unleashes our full creative energies towards building a better world? Can we boldly dare to consider a “breakthrough” scenario, even when we’re dragged down by the dysfunctional morass of our current affairs?

I believe we can, and thanks to our amazing communications technology, millions of people are getting turned on to the ideas that could turn things around and bring us to an enlightened future. The Bioneers is one place I’ve always turned to for inspiration, like learning about biomimicry and using mushrooms to solve toxic waste problems. There are now 15,000 talks available through the TED conference website, which has grown into an app that people access on their phones to enjoy a daily infusion of inspiration. The rise of Impact Investing stems from this desire to put the goal of making positive change, above everything else. Investing in the “breakthrough” scenario requires just that – putting your money towards new systems and technologies. It is taking the “affirmative screening” tool pioneered by SRI and turning it loose to seek out the most impactful, regenerative opportunities.

So, how will the next generation of financial advisors put all this together for their clients in 2032? During the next 20 years we will be pushing up against many limits, in the atmosphere, the biosphere and the economy. We’ve already seen many people lose faith in the stock market. Over the coming decades, this process of weaning off Wall Street is likely to continue. Most investors will continue to invest a portion of their money there, but an expanded definition of what diversification and asset allocation are all about will take shape during these precarious times:

It will finally be possible, and common, for ordinary investors to put a chunk of their money into their own local economies, achieving a combination of financial and social/lifestyle returns that is impossible for Wall Street to match. As Michael Shuman points out in “Local Dollars, Local Sense”, the lack of local opportunities for today’s investors means they are shut out from investing in half of our economy.

Investments in the global economy will utilize ESG criteria… period! It is the only complete way to analyze investments, so it will be the new mainstream method. The body of evidence showing that these criteria are relevant for investors will become unassailable, and virtually all corporations will disclose the information needed by investors to fully evaluate how they are able to adapt to a world marked by climate chaos and resource limitations.

A growing segment of the investment world will put some of their assets into regenerative, high impact investments. The challenges of our times are awakening the vast creative potential of humanity. Investors will be caught up in the excitement of fixing our planet, and will put some of their money into great ideas, a strategy that many of the super-rich already practice. They will know that they are taking measured risks, but they will also know that the quest for the highest social and environmental returns could produce an occasional financial, and societal home run.

Finally, I believe that we are living in a time when consciousness itself is evolving. Our work as financial advisors is changing from one where we talk only about money, to a deeper conversation about the meaning of our lives. Those who choose to enter our field will need the capacity to easily shift from talking about the economy and their client’s material reality, to engaging in a process that helps people feel into their hearts and take action with their money and their time to fulfill their deepest life path desires. Our next generation will be clear about their values and what sort of world they want to create with their investments. We must provide the tools for them to shape the future as it unfolds in ways that none of us can imagine today.

Article by Hal Brill, Managing Partner of Natural Investments, LLC, a nationwide Registered Investment Advisor specializing in Sustainable & Responsible Investing ( ). He is the co-author of “Investing With Your Values: Making Money and Making a Difference”. Hal lives with his wife Allison in Paonia, Colorado, where they are building a straw-clay solar home, starting an organic hops farm, and working to protect their agricultural valley from gas and oil drilling.

Broad, Green and Global: The Future of Sustainable and Responsible Investing

By Barbara Krumsiek, President & CEO of Calvert Investments

Sustainable investing has always focused on the future, not the next trade or the next day or even the next quarter, but the longer-term horizon against which environmental, social and governance issues have an impact on stock prices and the larger world. Yet right now, I believe that our industry is thinking about the future more than ever, as investors take on an increasing responsibility for creating a greener, more sustainable economy.

Consider that 20 years ago, the original Rio Summit looked almost entirely to government to protect the world’s natural resources and clean up the environment. This year, the Rio + 20 Summit asks investors to take up this task.

As co-chair of the UN Environment Programme Finance Initiative, or UNEP-FI, I have been very much involved in this effort. The finance section of UNEP’s Green Economy report, published this year, notes that “A global transition towards a green economy will require substantial redirection of investment …the bulk of which will need to be mobilized through financial markets.” The report also estimates that total world investment in a green economy will have to rise by one to 2.5 percent of global GDP to meet emerging challenges; currently we spend less than 1 percent on these priorities.

Consider, for instance, global warming, which many scientists see as a threat to global living conditions and economic growth. Analysts estimate that it will cost some $46 trillion between now and 2050 to halve CO2 emissions while providing low carbon energy. An additional $316 trillion will be required to develop green transportation and building technologies. Keeping global warming to two degrees centigrade rise may require an investment of $500 billion per year by 2020. The financial markets – and particularly the segment of these markets committed to sustainable investing – will be critical in raising and directing these funds toward solutions.

The future of Sustainable and Responsible Investing (SRI), then, is bound up with the future of our economy and our society. As investors, as money managers and as advocates for sustainable principles, we have to take the lead in developing solutions to sustainability challenges. SRI will become not just a niche, but an integral part of our new green economy.

All this has important implications for the SRI sector as we gear up to play a larger, more important role in the world’s capital markets. At Calvert, we believe that SRI will become broader, greener and more global in the years to come – and that, indeed, these changes are already underway.

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A broader segment of the world’s capital markets

SRI assets have already become a much larger part of the world’s total investments, accounting for $3 trillion at the beginning of 2010 – or one out of every eight dollars under professional management in the United States today.

These assets are also growing faster than the market as a whole. From 1995 to 2010 SRI assets grew by 380 percent, as compared to an increase of 260 percent for all professionally managed assets.

At the same time, more institutional investors are demanding that their asset managers incorporate environmental, social and governance factors into their investment analysis. U.S. institutions currently have more than $2.3 trillion in SRI assets, European institutions 34 billion Euros ($45 billion U.S.) in core SRI strategies. And these numbers are increasing as institutions recognize that sustainability analysis is, in some ways, a form of risk analysis, identifying potential exposure to environmental problems, labor disputes and governance issues, among other negatives.

In one striking measure of SRI’s increasing acceptance, as of early 2012 more than one thousand organizations had signed the U.N.’s Principles for Responsible Investment, including 249 asset owners, 592 investment managers and 165 service firms. Many of these investment managers do not come from traditional SRI backgrounds – they include firms like BlackRock, Goldman Sachs, UBS and Deutsche Bank. As sustainable analysis becomes a standard part of due diligence, more and more companies are looking to improve their ESG profiles.

At Calvert, we noticed several years ago that a number of companies that had never met our screening standards had begun asking us for advice on meeting sustainability criteria. We began to think about how we, as SRI investors, could have an impact on companies beyond our traditional scope. We looked for ways to help companies that did not pass our sustainability screens improve. In 2008, we developed an innovative approach to sustainable investing called SAGE.

Through SAGE, in select Calvert Funds, we invest not only in companies that meet certain screens, but also in a number of companies that do not. Then we work with these companies to help them improve in the areas where they fall short. For instance, as of February 2012, our Large Cap Value fund, which follows the SAGE approach, owned stocks including Duke Energy, Dow Chemical and Wal-Mart. The holdings in this Fund meet only three of the seven criteria required by our traditional sustainable Calvert Funds. But that is the point – to work toward sustainability with companies that we have never held before and to broaden the impact of SRI at the same time.

So SRI is getting broader, reaching more investors, more asset managers and more portfolio companies – and we at Calvert believe this trend will continue.

Moving towards a green economy 

We also believe that SRI will continue to become greener, that is, more focused on the environment, resource conservation and climate change issues. And we will do this not just by screening out companies with poor environmental records, or even through shareholder advocacy to encourage better performance. We as an industry will be involved in directing capital towards the green companies and technologies that can solve our most pressing ecological problems.

For instance, at Calvert our two newer funds are Calvert Global Alternative Energy Fund and Calvert Global Water Fund. Through these Funds, we are seeking out the companies with the best ideas about two of our world’s biggest challenges – finding alternatives to carbon-producing fossil fuels and providing clean water to growing populations. If we are successful, we create a win-win situation. Cutting edge companies get the capital to solve environmental challenges – and bring the best strategies to market. At the same time, Calvert shareholders have the opportunity to participate in the profits that come from innovation, while also building a greener world.

Green bonds provide the same kinds of opportunities to fixed income investors. Right now the market for green bonds, or bonds which raise money for environmental purposes, makes up a relatively small proportion of the global fixed income market. The European Investment Bank, for instance, issued roughly $1 billion in green bonds, and the World Bank about $15 billion from 2007 to 2010. In the U.S., local governments have been experimenting with tax-free municipal bonds, known as Qualified Green Building and Sustainable Design Project bonds. These bonds have real promise in directing capital towards large-scale projects – such as upgrading utilities and infrastructure.

A more global SRI

We’ve seen how SRI is becoming broader and more focused on green issues. The final development is globalization. We are moving towards a world in which any investor – individual or institutional – in any country may seek an SRI strategy or strategies, which cover all the markets in which it is appropriate to invest. At Calvert, we are very proud of our role in bringing the first socially-screened international fund, the Calvert World Values Fund, to market in 1992. Yet we also recognize that this is just the beginning. Investors are now looking for regional funds, sector funds, country funds, indexed and actively managed funds – in short, all the tools for diversified asset allocation – managed in a sustainable way.

Raising the bar

The ways in which we define sustainability will change over time, as they have throughout the history of our industry. Consider that not too many years ago SRI was a niche strategy that appealed mostly to people with a strong sense of values. Today it has become a broadly acceptable, institutional approach to integrating environmental, social and governance risk analysis into an overall framework. Likewise, only a few years ago, socially responsible investors focused mainly on eliminating “sin stocks.” Now we try to advocate for positive change through shareholder advocacy, an expanded scope of investment and the allocation of capital to innovative green companies. And while sustainable investment started as a local phenomenon, it has now become more and more global, with investors, asset managers, and portfolio companies worldwide.

Yet through all these changes, one thing has remained constant. We have continually raised the bar, redefining what it means to be a socially responsible company. I believe that that will continue as our industry becomes more mainstream, and as increasing numbers of companies compete for sustainable investors.

As more and more investors insist on ESG compliance, what constitutes a “good” company will change. It’s hard to imagine what sustainability will look like in 10 or 20 years, but I am pretty certain that the standard will be higher and the performance of companies better than it is today.

Article by Barbara J. Krumsiek, Chair, President and CEO of Calvert Investments, Inc. Calvert manages over $12 billion in assets for individual investors, retirement plans, pension funds, endowments & foundations, and high net worth investors. She currently serves as Co-Chair of the United Nations Environment Programme – Finance Initiative, a partnership between the United Nations Environment Programme and 200 financial institutions around the globe mandated to develop and promote the links between sustainability and financial performance.

Calvert Information:

As of March 31, 2012, Calvert Large Cap Value holdings included Duke Energy (1.24% of the portfolio), Dow Chemical (2.25%), Wal-Mart (2.24%). Calvert may or may not still invest in, and is not recommending any action on, any companies listed. For the most recently available information on holdings in each Calvert fund, visit . Current and future portfolio holdings are subject to market risk.

The Calvert Global Alternative Energy Fund is subject to the risk that stocks that comprise the energy sector may fall in value, and the risk that prices of energy (including traditional sources such as oil, gas or electricity) or alternative energy may fall. A downturn in the alternative energy industry would impact the Fund more than a fund that does not concentrate in this industry, and the Fund therefore may be more volatile than a typical mutual fund. Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations. The Fund is non-diversified and may invest more of its assets in a smaller number of issuers than a diversified fund; therefore, gains or losses on a single investment may have greater impact on the Fund.

The Calvert Global Water Fund is subject to the risk that stocks that comprise the water-related resource sector may fall in value. A downturn in the water-related resource sector would impact the Fund more than a fund that does not concentrate in this industry, and the Fund therefore may be more volatile than a typical mutual fund. Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations. The Fund is non-diversified and may invest more of its assets in a smaller number of issuers than a diversified fund; therefore, gains or losses on a single investment may have greater impact on the Fund.

For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free summary prospectus and/or prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The summary prospectus and prospectus contain this and other information. Read them carefully before you invest or send money.

Calvert mutual funds are underwritten and distributed by Calvert Investment Distributors, Inc., member FINRA and subsidiary of Calvert Investments, Inc. (4-12, 12115)

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