Investing for a Better World

There is more to investment returns than money.

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 SLO Farm to Buyer Mixer Event Sign

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

Marco Vangelisti

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.

Investment Compass

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.

Regenerative Investing

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.

Colorful Handprints Surrounding Earth
Shutterstock/Holmes Su

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.

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Resources

The Resilient Investor – Book Review

Invest in your best life.

You will never look at the word investment in the same way after reading The Resilient Investor. Investing is about more than money, it is about your life.

The full title of the book by financial advisors Hal Brill, Michael Kramer, and Christopher Peck is The Resilient Investor: A Plan for Your Life, Not Just Your Money. That should give you a clue this is not your typical investment 101 book and you will not be learning how to get rich by investing in the stock market. What you will gain is a broader perspective about investing and a toolkit to help you create your own resilient investment plan.

The Resilient Investor Book CoverI was interested in reading this book for two reasons. First, I was curious. I wondered if it was possible for three money guys to speak about non-financial matters in an understandable and useful way? Second, I wanted to learn more about investing in people, communities, and companies that are taking the long view and working towards keeping Earth habitable now and in the future.

Book Review

“Does the challenge of making informed decisions about your life seem far more complex today than it did even a short time ago? Does the future—your own and that of the world—feel highly uncertain, perhaps even precarious? We can sense you there, nodding in agreement.”

When I read the first few sentences of The Resilient Investor (above), I thought, “Yes that is exactly how I feel.”

Before reading this book, I would have automatically associated money with the word investment but I think the authors’ expanded version is much more useful because it encompasses your whole life and that is what is important.

“…try this on for size: investing is something that we all do by directing our time, attention, energy, or money in ways that move us toward our future dreams, using a diverse range of strategies.”

Readers as you move through the book you will learn about the Resilient Investing Map (RIM), a handy tool for making notes and organizing your thoughts about what you want to keep doing, stop doing, or start doing when it comes to investing in your life. You can work on your own RIM as you read the book, read the whole book and then use the RIM, or skip the RIM entirely and use your own method. I am taking the middle approach. I have read the book and now I am doing my RIM.

You will learn how to recognize your real net worth and about close to home, global, and evolutionary investment strategies (remember it is not just about money). A discussion of possible future scenarios encompasses a full spectrum of outcomes from doom and gloom to a bright new world. These scenarios combined with various investor profiles will help you identify your own worldview, where you stand, and what is important to you.

To help you evaluate your own situation and create a resilient investing plan the authors provide a step-by-step guide and examples from their own lives.

The book wraps up with a review of sustainable and responsible investing (SRI) an approach that screens investments for environmental, social, and governance factors as well as traditional return on investment financial measures.

The Bottom Line

Not surprisingly, tax season is what led me to read The Resilient Investor and write a review about it this April. I do not know about you, but money is usually on my mind when I am collecting and organizing information for our income tax returns. To me, this seems like the ideal time to expand my thinking about investing and to create my own resilient investing plan. I hope you think so, too.

The authors of The Resilient Investor, Hal Brill, Michael Kramer, and Christopher Peck are managing partners of Natural Investments, a B Corporation specializing in sustainable, responsible investments. Jim Cummings is a writer who works with Natural Investments and is the editor of the book.

Admittedly, Brill, Kramer, and Peck are not a diverse trio. They describe themselves as “three college-educated white guys who all co-own a specialty investment company.” However, they do have decades of resilient living and investing experience and a compelling vision for a resilient future.

The book is short (less than 200 pages) making it easy to read and carry around. The writing style is conversational and straightforward. A companion website offers more information and downloadable blank and example RIMs.

“In the end, despite our continued positing that the idea of investing needs to be expanded, there comes a time to drop the distinctions that divide our daily lives into categories. There is only one activity that we are all engaged with all the time: we are simply trying to live our lives the best we can.”

Reader Note: I first learned about The Resilient Investor while reading a newsletter from Natural Investments. Our financial advisor is a member of the Natural Investments team. When I asked him about the book, he offered to give me a copy. I chose to invest my time in writing this review because I think readers may find the book informative and useful.

Featured Image at Top: Purple Flower in a Metal Spring with Loose Petals on a Wood Surface – Photo Credit Shutterstock/Alta Oosthuizen

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