Local investing is about intergenerational justice

Originally published in Slow Money State of the Sector Report (2014)

I worked in finance for about 20 years, the last 6 managing investment portfolios for institutional investors. As fiduciaries we were tasked with preserving and growing the capital of our clients. Our fiduciary duties were discharged by delivering financial returns with moderate risk by investing in our area of expertise.

Many of our clients were foundations and no one seemed concerned that some of the investments we were making on their behalf caused or worsened the very social and environmental problems those foundations were created to address.  A case in point was one of our best performing stocks, a Malaysian palm oil company that had destroyed tens of thousands of acres of original rain forest and replaced it with a monoculture of palm oil plants. Such operation destroyed the Borneo habitat of the Orangutan, yet a few of our clients were environmental foundations trying to protect such habitat with their grants!

A few thoughts on Slow Money investing

Slow Money seeks to catalyze investments into local foodsheds and to bring about a new way of investing, one that is appropriate to place, based on direct relationships and aligned with the values of caring for the commons, sensitivity to the carrying capacity of the planet, and non-violence.

Slow Money is also a response to Global Finance that has, on one hand made investing easy and accessible through intermediation and pooling of capital (think about all the ETFs and all the mutual funds, now in the tens of thousands, which are investment options available to all of us), while on the other hand it has allowed for the disconnect between our agency in the world, expressed through our investments, and the values we hold dear. In other words, Global Finance by making it easy for us to invest through intermediaries has removed our own investments from our sphere of awareness. Most of us are not aware of the individual holdings of mutual funds in which we might be invested, let alone how the individual companies in them are utilizing the capital and how they treat their employees, the communities they affect, and the environment.

TPP and the Great Peril of Inattention

President Obama recently returned from a trip to Asia. The primary goal of his trip was promoting the Trans Pacific Partnership – a massive “trade” agreement with vast social and environmental consequences. You will be excused for not knowing much about the TPP since it has been negotiated in secret. It turns out, the more you know about it and the less you will like it – hence the necessity for secrecy. It transfers power from sovereign governments to multinational corporations damaging democracy and frustrating attempts at bringing about a more sustainable and just society.

The goal of Essential Knowledge for Transition is to make visible the operating system of our society – to reveal the design of the monetary and banking system, the economic system and the financial system and to show ways to redesign them for the benefit of our communities and the natural systems on which we depend.

The TPP represents a massive redesign of the operating system of our society that further entrenches the very problems we are trying to solve: erosion of democracy, the power of unaccountable multinational corporations, environmental destruction, climate instability, and wealth and income inequality.

Local Investing – a Powerful Tool for Effective Economic Development

With the economic slump well into its sixth year and unemployment still significantly higher than at its inception in 2007, it is understandable that the priority of elected officials is job creation. States, counties and municipalities, while dealing with budget deficits, have been competing with each other to attract jobs in their region with tax abatements and other financial incentives mostly targeted at large corporations.

Attracting jobs through tax incentives has been at times extravagantly costly, like the recent $55M tax abatement Apple received from the state of Nevada to create 35 jobs in a new data storage center in Reno, or the jobs created in the State of New Jersey in the last decade – as the NYT reported on April 12th, 2012 “… the Christie administration has granted more than $900 million in state tax credits over 10 years to 15 companies, including Panasonic, Goya, Prudential and Campbell’s Soup. The companies have promised to add 2,364 jobs, or $387,537 in tax credits per job, over the next decade”.

Investing and the Disappearance of the Sacred

I spent this weekend at the Bioneers conference and something shifted inside me. I understood at a deep level that the destruction of the natural ecosystems on which our survival depends, is rooted in the loss of our understanding of Nature as sacred. As Sufi scholar Llewellyn Vaughan-Lee mentioned during the panel on Spiritual Ecology: A Spiritual Response to the Ecological Crisis, indigenous cultures have retained the understanding of Nature as sacred while Western culture lost it at around 400AD, when monotheistic religions suppressed pagan earth-based religions, hence banishing the sacred from the Earth and relegating it to the heavens.

Nevertheless, many in our Western culture still seek connection with Nature as a way to nourish and uplift the spirit. Many intuitively understand that a walk through these woods can reinvigorate the body, mind and spirit.