Imagine what we could accomplish if each one of us invested even a small amount of money towards making the world a better place to live now and in the future.
Before we get started, I want to be clear that I am not suggesting that you invest any amount of money in any particular way. It is your money so you are the person best equipped to determine if and how you want to invest it.
My goal for this post is to you encourage you to think about your own investing philosophy and to evaluate whether it aligns with your values and the world in which you want to live.
Until the last ten years or so, I would say my investment focus was on growing my money (return) and trying to avoid losing it (risk). I am not saying this is a bad thing, but it is a rather narrow way of looking at financial investments.
I cannot pinpoint any particular event or even a year when my view of what constitutes an investment began expanding but I think it co-evolved with my desire to live more lightly on Earth.
For instance, in 2013, my spouse and I invested in a rooftop solar panel system for our home. Mostly we wanted to help build renewable energy capacity in our community; however, the free electricity down the road was also an enticement.
We joined the SLO Natural Foods Co-op in 2014 because we wanted to buy and eat delicious organic food and support local and regional farmers and food businesses.
After talking about it for years, in 2015, my spouse and I finally rolled our IRAs out of traditional bond and equity mutual funds into fossil fuel-free socially responsible investments. In this case, our goal was to invest in companies and organizations that are screened for environmental, social, and governance performance as well as risk and return criteria.
Last year, we began looking for a small investment opportunity where we live in San Luis Obispo County, CA. Two weeks ago, this quest landed us in an all day Saturday workshop entitled Align Your Financial Portfolio with Your Values hosted by Slow Money San Luis Obispo.
That day I realized something that I think has been percolating in the back of mind for some time. There is an investment space between charitable giving and traditional investing.
Financial people refer to this as impact and/or regenerative investing. I like to think of it as making-the-world-a-better-place investing.
Before we talk about the workshop and regenerative investing, it will probably be helpful for you to have a bit of background about the Slow Money movement.
Slow Money Movement
The Slow Money movement is led by the nonprofit Slow Money Institute whose mission is catalyzing the flow of capital to local food systems, connecting investors to the places where they live and promoting new principles of fiduciary responsibility that “bring money back down to earth.”
They accomplish this through a variety of approaches including public meetings, on-farm events, pitch fests, peer-to-peer loans, investment clubs and, most recently, nonprofit clubs making 0% loans.
Slow Money groups are independent organizations that adhere to Slow Money principles and facilitate investments and loans within their community and region.
I met Slow Money San Luis Obispo founder, Jeff Wade, at a Central Coast Bioneers conference last November and signed up for the email newsletter list. When the workshop announcement landed in my email inbox, I knew I wanted to go so I talked my spouse into attending and signed us up.
Values-Based Investment Workshop
Our instructor for the day was Marco Vangelisti, a founding member of the Slow Money movement. For a mathematics whiz and former investment manager, he was a surprisingly down to earth and humorous speaker and kept me engaged throughout the day.
Some of the things we learned during the workshop included how in traditional investing a tree only has value once it becomes lumber, how banks create money using accounting entries, and how corporation stock prices are inflated because they benefit from free ecosystem services provided by Mother Nature.
Marco gave us a crash course in portfolio management and due diligence. He explained regenerative investing and gave us examples. We also talked about direct investing, which is where you make an investment directly with an entrepreneur or business.
Just before lunch, Marco asked us to determine our personal investment compass. He handed out pieces of flip chart paper and colored markers. Using my limited artistic skills, I drew my investment lens (see featured image at top), which are things I consider now when making an investment.
The SLO Natural Foods Co-op prepared a delicious lunch for us and Jeff provided reusable coffee mugs, napkins, and tableware in the interest of making the workshop a low impact event.
The word regenerate means reborn, renewed, restored, reformed, and reestablished. Regenerative systems keep going indefinitely.
When you make a regenerative investment, you are purposefully investing with the intention of generating a positive social and environmental impact.
The main return is not financial. It is things like bringing a grocery market to an inner city food desert, helping a young organic farmer obtain access to farmland, or enabling a school to install solar panels over their parking lot.
Regenerative investing is democratizing investing because it enables people to make small investments (as little as $25) or large ones and gives a wider range of entrepreneurs and businesses access to financial capital.
You might get your money back. You might get your money back with a small amount of interest. You might not get your money back at all. This is true for other kinds of investments, too.
As we were wrapping up the final Q&A session of the workshop, Marco asked each one of us to tell the group one thing that we learned or got out of the workshop.
The idea that stuck in my mind is that when you make regenerative investments you are investing in “livable future insurance” for you, your children, and people of the future.
I hope reading this post challenged your view of what constitutes an investment return and inspires you to create your own personal investment compass.
Featured Image at Top: This is my investment lens drawing from the workshop.
- 1% for The Planet – Keep Earth in Business
- Building Social Business – Book Review
- GDP is So 20th Century – Gross National Happiness is In
- Green Investing – New Year’s Resolution
- Microfinance – History
- Microfinance Institutions and Organizations
- Natural Capitalism – Book Review
- The Resilient Investor – Book Review
- BALLE (Business Alliance for Local Living Economies)
- Capital Institute
- Environmental, Social, and Governance (ESG) Criteria – by James Chen, Investopedia, 05/10/19
- Essential Knowledge for Transition (Marco’s website)
- GIIN (Global Impact Investing Network)
- Global Reporting Initiative (GRI)
- RSF Social Finance
- Slow Money Institute
- Slow Money San Luis Obispo
- Street Shares
- What Returns Could We Expect from Local Investing – by Marco Vangelisti, Essential Knowledge For Transition (EK4T), 03/20/17