Written by Jim Cummings.
Two new reports highlight the expanding adoption of Environmental, Social, and Governance (ESG) criteria among money managers, as well as the benefits to the bottom line that accrue to ESG-savvy investors.
The biennial Report on US Sustainable, Responsible and Impact Investing Trends from US SIF, the trade organization for the SRI industry, shows a continuation of the rapid adoption of ESG criteria among mainstream money managers that was noted in the previous Trends Report. In the last two years, the value of portfolios that include consideration of ESG factors has mushroomed by 69%, to over 8 trillion dollars, under the management of 777 money managers and institutional investors, and over 1000 community investing financial institutions. While the number of more active money managers who filed shareholder resolutions
Tags: ESG, financial assets, sustainable global economy strategy
Written by Jim Cummings.
Two new programs aim to get subject-matter experts linked up with local and regional governments to take on their most pressing resiliency challenges. Andy Revkin offers up his typically link-infused overview of these efforts, centered on Thriving Earth Exchange, which is networking to bring in experts to help cities with specific issues such as flood risks to food distribution systems, adapting to extreme heat, responding to drought, and many others. Meanwhile, the Obama White House rolled out a similar program dubbed The Resilience Dialogues, an “online consultative service will help communities find, use, and understand information, tools, and programs to support their climate-resilience needs.”
Both of these programs are actively soliciting requests from cities for expert guidance, and subject-matter experts willing to share their insights. If you’re active in your local community’s transition, resiliency, or climate response programs, check them out! Start with Revkin’s introduction, then dig in.
Tags: climate, close to home strategy, collaboration, community groups, evolutionary strategy, future, resilience, tangible assets
Written by Jim Cummings.
In May, the SEC finalized its long-anticipated new rule that opens the door for more investors to take part in the most exciting—and risky—realm in the investing universe: innovative startups. Previously, only “accredited” investors ($200K/yr income or $1 million in assets) were allowed to take these risks, and thus to reap the outsized rewards that can accrue to early investors in companies that are not yet available in the public stock markets.
Indiegogo announced this week that it will begin allowing small companies to offer equity investments on its platform, rather than just the rewards-based pre-sales that have been the core of crowdfunding up til now. Many small companies have used crowdfunding platforms to get rolling and prove that there’s a ready market for their new products, only to turn to the super-rich when the time came to scale up for mass marketing their innovations. Oculus, for example, raised millions from early adopters, but it was equity funders who reaped the windfall when the company was sold to Facebook for $2 billion.
In these early months, the potential is just beginning to be realized. According to WeFunder, the largest equity crowdfunding portal so far, about 55 companies have successfully raised a combined total of $12 million from small investors. WeFunder is currently hosting several dozen offerings, which range from
Tags: crowdfunding, driver, evolutionary strategy, financial assets, local investments
Written by Jim Cummings.
Acclaimed permaculture teacher Ross Mars has just released a new book that will be a valuable resource for the burgeoning crop of small farmers working on modest landholdings, as well as for people moving toward increased self-reliance on their property while maintaining their jobs away from home. As Mars notes, “Today in North America, the fastest growing forms of agriculture are small peri-urban farms of less than 20 acres growing vegetables for market.”
The Permaculture Transition Manual: A Comprehensive Guide to Resilient Living is a hefty (450 page) resource that features in-depth guidance on all elements of permaculture design and personal homestead resilience—land, labor, wildlife, energy, and your own mindset—as well as case studies of four diverse projects. We fully support Ross’s underlying respect for the value of permaculture’s insights:
Permaculture connected many streams of the world’s traditional knowledge with modern forms of science and urged ordinary people everywhere to continue that lineage of empirical investigation. The books were a prospectus for a worldwide distributed experiment in ecological subsistence agriculture for the post-industrial world.
That experiment is now over 30 years old, and I will argue that its fruits are abundant and that results have validated the original thesis well enough that we should expect it to meet the needs of a new generation of garden farmers whether they be former pastoralists settled into towns in Botswana or industrial workers made redundant by energy descent in Boston.
Check out the Table of Contents and Introduction. Then go get some dirt under your fingernails!
Tags: close to home strategy, evolutionary strategy, regenerative, resilience, tangible assets, your home
Written by Jim Cummings.
Not long ago, I stumbled across The Daily Yonder, an excellent website that focuses on rural economic and social issues (try their Weekly Yonder email to get a taste). This week, they featured an inspiring interview with Maury Forman, Senior Manager for Rural Strategies and Entrepreneurship for the Washington State Department of Commerce, who urges small towns and cities to cultivate an entrepreneurial culture that can entice young and middle-aged kids who left town to return to start small businesses. In contrast to the concern about “brain drain” in small towns, he says, “Let kids get out and explore. People keep saying we want to keep our kids after high school. I think we should let them go out and explore new ideas, new things, and then come back educated and experienced, so that they can start a business, and create new jobs, and live in healthier communities.”
Forman enthuses:
I actually think it’s easier to do economic development in rural areas than it is in big cities. …. When you have small successes in rural, they’re big successes; the thrill is so much bigger there than it is if Seattle hires 10 employees. It’s going to make the newspaper in a rural community. I find rural communities to be easier to work with, more fun to work with, they take life a little less seriously.
Forman has also collaborated with a colleague to put together one of the best concise primers on raising capital that we’ve seen, and they’re giving it away free online. Startup Wisdom: 27 Strategies for Raising Business Capital offers succinct 2 or 3 page overviews of everything from crowdfunding to local investing clubs to grants (while also making nods to the lottery and even lemonade stands!). It won’t get you all the way to being funded, but it’s a perfect first read to help you narrow down the avenues you want to investigate further. They put this booklet together after finding that many potential rural entrepreneurs were struggling with Step 1, since “banks were not loaning to people in order to get businesses started. They didn’t like the idea. It was a risk. The whole bank idea of making bank loans just wasn’t in the banks’ interest, especially in micro-loans. That’s really what many small communities are looking for, probably under $50,000.”
Forman is offering just the kind of practical, localized guidance that can invigorate the regional vitality that is essential to the flourishing resilient economies and social networks that we envision in The Resilient Investor. Here’s to both local communities and early- to mid-career rural expatriates taking this advice to heart!
Tags: close to home strategy, community groups, crowdfunding, local investments
Written by Jim Cummings.
In the face of continued grim climate news and disturbing societal trends, it is increasingly clear that governments cannot marshall the resources—or perhaps even the will—necessary to the tasks before us. Increasingly, though, forward-looking investors are stepping in to help lead the way forward. Two recent reports offer some encouraging signs that global finance does indeed include many actors who are committed to the changes that we need.
Domestically, a progress report on an impact investing initiative from the White House Office of Social Innovation and Civic Participation shows actual investments to be outpacing and outperforming the initial commitments and expectations. When this private-investment initiative was announced in June 2014, they had $1.5 billion in new commitments to impact investments from private funds, foundation programs and endowments, investment banks, small family foundations, and nonprofit organizations. By the time the dust settled on the first round of planning, that total had grown to $2.5 billion to be invested over the five years from 2014-2019. The recent report followed up and found that in just the first eighteen months, through December 2015, almost half of this total had already been invested, suggesting that in the long run the goal may well be exceeded. This is especially likely when we turn to the returns coming in on the early investments, which universally have exceeded expectations. It turns out—no surprise to the SRI community—that investing in projects with strong social and environmental impact is very good business! So far, about two-thirds has been invested for social impact and one-third for environmental impact, especially climate solutions. 81% has been invested here in the U.S.
Internationally, the news is also encouraging. A recent UN report outlines the challenges before us: to meet both the UN’s 2030 Sustainable Development goals and the targets in the Paris climate agreement, $90 trillion of investment is needed over the next 15 years. This amounts to about 8% of global GDP over this timeframe, a daunting but not unrealistic goal. But to get there, it will mean marshaling the same power of private financing. As former Secretary of the Treasury Hank Paulson points out in an op-ed entitled How to Raise Trillions for Green Investments:
“The good news is that there is a global abundance of private capital. To unlock these riches, governments must create conditions that encourage private investment in clean technologies and sustainable development. With smart, well-designed and coordinated policies, financing models and instruments like bonds and incentive programs, countries have the potential to solve some of the planet’s most pressing environmental challenges while still maintaining economic growth.”
Paulson is especially enthused about the explosive growth of green bonds, which nearly quadrupled from 2013 to 2015, up to $42 billion. Of this, 40% is being deployed in China, where the government there has set ambitious green energy and building targets. The Building Energy Efficiency and Green Development Fund is a public-private partnership that will bring leading-edge technologies from U.S. companies to China to increase the energy-efficiency of new buildings there. (One more reason to NOT start a trade war with China!)
All this investment is still just the first few drops in the $90 trillion bucket, but the rapid ramping up of these and other green investment commitments suggests that the financial powers that be are finally waking up to the scope of our challenge and are ready to put their massive wealth to work making the changes that are needed. Time will tell whether it will be enough, but we’re encouraged that it’s happening on a scale we haven’t seen before.
Tags: climate, financial assets, global, impact investing, sustainable global economy strategy
Written by Jim Cummings.
Did you know that despite the lack of any federal laws protecting LGBT people from discrimination, three-quarters of Fortune 500 companies have policies in place to do just that? The “S” part of corporate ESG (Environmental, Social, and Governance) standards and SRI (Socially Responsible Investing) has been coming alive in increasingly dynamic ways in recent years.
This year, as three southern states passed laws that actively codified anti-LGBT discrimination, some of the loudest—and most effective—voices raised against these initiatives came from large companies. As summarized by The New Yorker:
Last month, executives at more than eighty companies—including Apple, Pfizer, Microsoft, and Marriott—signed a public letter to the governor of North Carolina urging him to repeal the state’s new law. Lionsgate Studio is moving production of a new sitcom out of the state, Deutsche Bank cancelled plans to create new jobs there, and PayPal has cancelled plans for a global operations center. In Mississippi, G.E., Pepsi, Dow, and others attacked the law there as “bad for our employees and bad for business.” Disney said that it would stop making movies in Georgia, which has become a major venue for film production, if the governor signed the bill. Something similar happened last year in Indiana, after the state passed a religious-freedom law allowing businesses to discriminate against L.G.B.T. customers and employees. At least a dozen business conventions relocated.
The article goes on to look at the ways this leadership by corporate interests upends both progressive and conservative orthodoxy. Progressives often decry the influence of business on government decision-making, but this time it’s a welcome addition to grassroots voices against regressive new state laws. Meanwhile, as the New Yorker’s James Surowiecki notes, “to many conservative business leaders, today’s social-conservative agenda looks anachronistic and is harmful to the bottom line; it makes it hard to hire and keep talented employees who won’t tolerate discrimination.”
Though we’ve long been champions of the idea that business can play a key role in reshaping society in positive ways, this vocal leadership on perhaps the leading social justice issue of the day is a welcome surprise.
Tags: justice, SRI, sustainable global economy strategy
Written by Jim Cummings.
A new set of regulations issued by the US Department of Treasury opens the door for private foundations to direct more of their investments to socially and environmentally beneficial projects. Foundations are careful to separate their investment portfolio, used to grow their asset base, from the funds used to further their charitable mission, distributed in the form of grants or loans. In recent years, many foundations that wanted to support social entrepreneurship or make loans to organizations within the areas of their missions had to treat these as part of their grant-making budget, rather than as part of their investment portfolio.
The new rules clarify that foundations “can factor in how the anticipated charitable outcomes from the investment might further the foundation’s mission in addition to the financial returns that are typically considered. Thus, a foundation may prudently choose to make investments that provide both a charitable and a financial return without fear of facing a tax penalty.”
For more on this welcome new Zone 8 and 9 development, see this press release, issued by the Director of what sounds like a fantastic place to work: the White House Office of Social Innovation and Civic Participation.
Also, see this recent article from the Natural Investment News, in which our own Michael Kramer discussed the implications of the new rules and related changes at the IRS.
Tags: evolutionary strategy, financial assets, impact investing, sustainable global economy strategy
Written by Jim Cummings.
In the wake of a recent conference on Finance & Democracy, Leslie Christian highlighted a fundamental tension within the philanthropic and impact investing community: at what point, if ever, do those with extreme wealth begin easing up on the “do well” side of the equation, and start putting more of their resources into the “doing good” mission? In a brief post titled Confluence…or Collision?, Christian is pleased to see that “the rarefied world of Wall Street investing and its ‘good investors’ is now being infiltrated and questioned by a small, vocal, and growing number of people with wealth who are eager to question and redefine investing.” She shares a striking moment, when one of the conference participants rose to challenge the underlying mindset of the managers of the Rockefeller Brothers Fund, which has been praised for its decision to divest from fossil fuels:
Tags: financial assets, impact investing
Written by Jim Cummings.
Readers of The Resilient Investor will remember that our picture of more vibrant local economies is rooted in a shift from national and international trade networks toward increasingly vibrant regional economic systems. A recent article in the NYTimes speaks to the emerging regional character of the US economy and society, suggesting that national policy should be redirected from state-specific funding, and instead nourish the already-emerging regional networks, which can then breathe new life into their surrounding rural areas and depressed smaller cities:
America is increasingly divided not between red states and blue states, but between connected hubs and disconnected backwaters. Bruce Katz of the Brookings Institution has pointed out that of America’s 350 major metro areas, the cities with more than three million people have rebounded far better from the financial crisis. Meanwhile, smaller cities like Dayton, Ohio, already floundering, have been falling further behind, as have countless disconnected small towns across the country.
Here’s the map of the US that the authors suggest we begin to plan around (click for larger version):
Tags: evolutionary strategy, future, resilience, sustainable global economy strategy
Written by Jim Cummings.
Ah, good old Grist. Too often lost in the modern online cacophony, I’m always grateful for the bits of their work that float to the surface of my info-stream. This one tackles an asset that totally blurs the tangible/personal line, your own body. Resilient investing tend to lump most of the body-related stuff into the “personal assets” row: health, career, learning. But once we die, well, our body gets pretty darn tangible for our loved ones, and this Grist piece, Find out how you can reduce your footprint even after you’ve kicked the bucket, is a great primer on what to do—and what not to do—with your tangible remains. As they set the stage:
As the sole species responsible for filling the oceans with plastic, pumping the atmosphere full of pollution, clear cutting the world’s forests, and bringing about what could be the sixth great mass extinction, it’s perhaps fitting that when we die, we turn our own corpses into toxic flesh bags that ensure ecological damage for years and years to come. It’s as if someone dared us to come up with the most environmentally harmful burial practices imaginable, and we dutifully complied, stopping just short of strapping vials of radioactive waste to our chests on our way to the grave.
Okay, you got my attention! So what are my options? Well, for starters,
Tags: consumer guides, lifestyle, personal assets, tangible assets, your home
Written by Jim Cummings.
This is a one-two punch I couldn’t resist: one of my top-5 journalists recommending a powerful new essay by my favorite “recent discovery” in earth-connected literature. Even better, Andrew Revkin and Robert Macfarlane are both riffing on one of the juicier umbrella topics for thinking about our rapidly-changing world: the Anthropocene, or the idea that the human mark on the planet is likely to take its place as the latest geological epoch.
Both Revkin and Macfarlane set out to point our attention to the best of the recent writing on this key topic. Revkin, in large part, welcomes Macfarlane’s recent piece as a chance to take a break from his regular dips into the recent literature, but he adds a few of his own recent faves at the end of his column. By contrast, Macfarlane’s extended essay in The Guardian presents a rich and complex introduction to the topic. You couldn’t find a better starting point (just as you couldn’t find a better deep-dive for learning about the field than those regular dips collected on Revkin’s site). Here’s a first taste, then click through for more excerpts:
There are good reasons to be sceptical of the epitaphic impulse to declare “the end of nature”. There are also good reasons to be sceptical of the Anthropocene’s absolutism, the political presumptions it encodes, and the specific histories of power and violence that it masks. But the Anthropocene is a massively forceful concept, and as such it bears detailed thinking through. Though it has its origin in the Earth sciences and advanced computational technologies, its consequences have rippled across global culture during the last 15 years. Conservationists, environmentalists, policymakers, artists, activists, writers, historians, political and cultural theorists, as well as scientists and social scientists in many specialisms, are all responding to its implications.
Tags: climate, evolutionary strategy, future, global, learning, personal assets
