BLOG

Investing in what we need, not what we want

Imagine the essential transformations necessary to live well in the years ahead — the progress we must make toward healthy, local and diverse sources of food, water and energy, meaningful jobs, lively cities, and functioning ecosystems.

The goal is enormous, but the steps are clear.

We must start by asking: Is there a way to encourage an ethical, social movement in these directions and make money at the same time? Might there be a more natural model of development that generates competitive financial returns to workers and investors while actually improving social and environmental conditions? How do we find financial reward building a more reliable prosperity?

Ecotrust believes this is possible because for over twenty years we have been carefully growing tangible initiatives that generate competitive returns while improving the wellbeing of both people and place.

Instead of investing in traditional Wall Street financial products like derivatives, large-cap public equities and corporate bonds, we have used our Natural Capital Fund – our working endowment and signature investment vehicle — to back things that deliver better returns. Our long-term forest ecosystem investments protect pristine habitat for nature-based tourism, build healthy watersheds for clean water, reduce carbon emissions and create more stable jobs in rural communities. We have used our capital and expertise to help build the nation’s first environmental bank, to lend to fishermen growing local, community-based fisheries, and to pioneer green building infrastructure that improves the livability of our cities.

After two decades of investing across the region, our Natural Capital Fund has converted $30 million in grants and program- and mission-related investments into $800 million in assets at work in communities from California to Alaska.

And our experience has more relevance than ever, as private capital is increasingly seeking to serve greater good. A broad group of investors is now actively looking for social and environmental, as well as financial, returns; In the United States alone, this market is valued at over $4 billion.

So our question now becomes: How can we better leverage this powerful global movement involving millions of investors and hundreds of funds and financial institutions to scale our collective efforts and move the global economy toward a more reliable prosperity?

We are not necessarily inventing a new idea here, but rather building on a strategy inherent in nature: invest in diversity and redundancy to withstand unforeseen shocks. Patagonia founder, Ecotrust friend and Natural Capital Fund investor Yvon Chouinard puts it simply, “The safest thing to do is invest in what we need, not what we want.”

Today people call this “impact investing.”

Tomorrow, we imagine people will simply call it “investing” — the standard and accepted way to design a more reliable prosperity.

It is the best way to catalyze the change we seek in the world.

It’s an idea whose time has come.