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The Purpose of Capital Ross Net Impact Conference: Purpose Driven Profits October 13-14, 2011. http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg. - PowerPoint PPT PresentationTRANSCRIPT
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http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg
The Purpose of CapitalRoss Net Impact Conference: Purpose Driven
ProfitsOctober 13-14, 2011
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Understanding system transformation
Capital Institute is about paradigm shifting.
consciousness
system
problems
CHANGE
As derived from Dr. Monica Sharma’s work at the UN
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4. Finance: Critical acupuncture point
3. How we got here
1. Competing world views
2. Our UNSUSTAINABLE economic system
Agenda: “Think Different”
5. Regenerative Investment: Grasslands, LLC
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1. Competing world views
After 500 years of progress based on the Cartesian logic of the Enlightenment…this is our Copernican moment
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Reductionist
Western View
HolisticSystems
View- Economy exists apart from nature and - Web of life: one system with multiplesociety as monetary phenomenon subsystems (holons); hierarchy
of wholes is critical
- Progress: Perpetual material improvement - Phase transitions, emergence
- “Invisible hand” analogous to natural law - Adheres to laws of thermodynamicsthat delivers most efficient outcome which implies absolute limits
among relative scarcities
- “Externalities” are fixable market failures - No such thing as “externalities”requiring government intervention Society needs to define a “SOS”
- Supremacy of the individual - Interdependence – all is connected
- Machine as model – mechanistic/linear - Nature as model – complexity/emergence
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2. Our UNSUSTAINABLE economic system
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OVERSHOOT
The global economy now uses up 1.5 times the earth’s capacity to regenerate the natural capital upon which the system and life depends.
- The Global Footprint Network
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“Safe Operating Space” -- The world is full
“Safe Operating Space” - National Center for Ecological Analysis and Synthesis
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UNCERTAINTY SPIKE
Symptoms of an unsustainable system overwhelm our senses with crisis upon
crisis
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2b. rising inequality is UNSUSTAINABLE
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Symptom: Increasing Wealth Inequality
http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/
Wealth Disparity:•2% of population Controls > ½ the World’s Wealth•50% of population controls < 1% of World’s Wealth•Income gaps between rich and poor > 2X in last 50 years Spain
Denmark
Norway
Finland
Sweden
NetherlandsSwitzerland
Belgium
Germany
Austria France
Canada Italy
Australia
IrelandGreece
New Zealand
UK
Portugal
Japan
USA
Better
Low Wealth Gap
Wel
lbei
ng
Worse
High
Wilkinson & Pickett, The Spirit Level (2009)
Wealth Gap vs. Wellbeing
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Capitalism and democracy demand trust
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Inequality lead to the Financial Crisis
Paul Krugman: “Inequality and Crisis: Coincidence or Causation?”
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3. How we got here
Our economy has become an anti-economy, a financial system without a sound economic basis and without economic virtues.
- Wendell Berry
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Economic Efficiency
Economy
Finance
What’s wrong with this picture?Desired Outcome
Planet
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The most important chart
in the world…
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Sustainability Optimum
Efficiency
100%
0%
Resilience
Source: Lietaer, Ulanowicz, Goerner 2008
Sustainability in Natural Systems
Collapse of Financial System
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4. Finance: Critical acupuncture point
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What are the “First Principles” of sustainable economics?
• Bruntland Report, 1987: “Sustainable Development”
• Dematerialization through efficiency
- Jevon’s Paradox• Weak vs Strong
sustainability
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“First Principles” of sustainable finance: What’s your impact?
• Relative scarcity vs absolute scarcity
• Real vs virtual wealth: the exponential function
• Finance practice: what is “value”?
Unsustainable
SRI/ESGGreen
Sustainable
RestorativeRegenerative
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Resiliency: Driving financial capital upstream
http://3.bp.blogspot.com/_o0s746IzxZQ
/TJwM
EtnPvsI/AAAAAAAAAWo/lX-2e-w
PZzo/s1600/upstream
.jpg
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Regenerative Investing: Grasslands, LLC
A Holistic Management Enterprise inPartnership with Savory Institute
• Alan Savory won the Buckminser Fuller Award in 2010
• Ranch management contracts, owned and third party• 55,000 acres under management in S. Dakota and
Montana• Expansion in Great Plains, New Zealand, Patagonia
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• 12.5 billion acres — (~40% of total landmass)• ~1 Billion people, many poor, make their living
as pastoralists
The World’s Grasslands are The World’s Grasslands are VastVast
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Peak Soil?
•Soil is second largest carbon sink after the oceans
•According to James Hansen, the atmosphere contains 800Gt of carbon, plants 600Gt, and soils contain 1500Gt
•We’re losing about 24 B tons of soil per year
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Nature Provides the SolutionNature Provides the Solution
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Impact Investment: What we feed, GROWS
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Wyoming – both photos taken same dayWyoming – both photos taken same day
• Left-side upstream, managed holistically (260% inc in livestock over 10 years)• Right-side is downstream land managed ‘conventionally’
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