Sustainable Finance

Thinking Systemically - Environmental Funders Network

 

I was recently asked to write a blog for the Environmental Funders Network (EFN) 

Pioneering funders play such an important role in tackling root issues - we need funders now, more than ever, to take a systemic approach to there funding.  Here's why.......

Thinking Systemically

By Jen Morgan, 3rd December 2015

“The major problems in the world are the result of the difference between how nature works and the way people think.” Gregory Bateson

So what is the difference between how nature works and how people think?

As empowered change agents, how can we help to align human systems so that they are in harmony with our natural systems?

This is something that I have been exploring for the last 12 years working at the nexus of sustainability and finance as a change practitioner with WWF-UK and The Finance Innovation Lab.

How Nature Works – A Complex System

Nature is a complex system. Orit Gal of Regents University’s Complexity Studio explains that the characteristics of a complex system, such as in a rainforest or a pond, include:

• Many simple actors whose interconnected relationships make the whole
• A collection of local actions – there is no ‘one actor’ in control
• Many interactions between actors – some interactions have surprising effects
• Actors learn and evolve over time and this leads to changing dynamics and patterns

However, through our prevalent thinking, we have designed our human systems with underlying principles of ‘self’ as independent, hierarchal control, predictable cause and effect and siloed expertise. Our predominant thinking has solidified through the influence of religious, scientific and industrial eras. As a result, we have become disconnected from ourselves, from each other and from the universal operating principles of nature that enable the conditions for life to thrive.

The most important thing we need to do now is to help humanity to change the way it thinks. We are not facing an ecological crisis – rather we are facing a crisis of epistemology. And this is the root cause of all our ecological challenges. This requires us to work at a level of worldviews, purpose, values, behaviours and relationships. Making shifts from ‘I’ to ‘WE’, from ‘individualism to interconnectivity’, from ‘fear to love’, from ‘scarcity to abundance’.
Thinking Systemically

Donella Meadows, a pioneering American environmental scientist, teacher, and writer, co-authored ‘The Limits to Growth‘, a seminal piece of work that began a debate about the limits of the Earth’s capacity to support human economic expansion. As a system thinker, she has also helped people to understand systems and how to intervene in systems for meaningful change.

The essence of her thinking is summarised in ‘Leverage Points, Places to Intervene in a System’. In this article, she talks about different leverage points with varying levels of influence. In descending order of effectiveness, she suggests change efforts should focus on shifting:

1. The Worldviews and Values Underpinning the System
2. The Purpose of the System
3. Who Shapes the Rules of the Game
4. The Rules of the Game
5. Information Flows
6. Positive and Negative Feedback Loops e.g. incentives
7. Physical Material Flows

She highlights that the top three most long-term, impactful places to intervene are through addressing the system’s worldviews and values, the system’s purpose and the system’s power dynamics.

But where do we actually focus our change efforts? Most of the of environmental change efforts of UK philanthropists and their grantees have historically addressed the lower order leverage points for change – such as increasing transparency, internalising externalities, and reducing environmental footprints. These are important. We need it all.

However, our efforts for change are seriously not stacking up to the scale of change that is required. We need to think much more critically and progressively about our strategies for change. And this means placing a much greater emphasis on the higher order leverage points that Donella presents.

Acting Systemically

So how can we stimulate change at the root level of systems?

Over the past decade, I have learnt that meaningful long-term change needs convening infrastructure, collaborative communities and personal leadership.

Convening Infrastructure:
Social change takes time. To help to create the enabling conditions for change over time, convening infrastructure is essential to host and grow communities and programmes of work. There is an increased awareness amongst US philanthropists that ‘backbone’ organisations are important convening infrastructure for ‘collective impact’. Backbone organisations clarify context, set intention, build strategy, cultivate resources, and create processes and partnerships that catalyse change at scale. Backbone organisations need the help of philanthropists now more than ever.

Collaborative Communities:
Aligned communities are exponentially more powerful. As we have seen from history, social change is accelerated when groups of people are galvanised by common purpose and find ways to act and move together. To enable an environmental movement in the UK, we need to convene and cultivate a community of change makers, who have a joint understanding of the root issues, are motivated by an inspiring vision, have shared theories and approaches to change, are aligned through a common purpose and have joined up strategies that allow the community to come together to experiment, practice, learn, adapt and leverage their work, relationships and resources.

Personal Leadership:
We are a fractal of the system. As we have learned from complexity science, we are all part of an interconnected system and our local actions influence the whole. So every action we take matters. And our actions will be even more influential if they are all in tune with our personal purpose (and this includes organisational purpose). What is our purpose? What are our values? What are our behaviours? Where are there gaps between our purpose and behaviours? How do we address this dissonance?

What philanthropists can do?

Philanthropists have a very important leadership role to play in pioneering the progressive change that is needed for people and planet. And the timing couldn’t be better. However, we need to take a step back, reflect critically on our efforts, and build better strategies and collaborative cultures.

Here are few thoughts that I believe will make significant shifts for our work.

1. Develop your capacity to understand ‘systems’ and ‘systems change’– take courses, learn from other practitioners, spend time in nature.


2. Invest more in convening infrastructure for change and backbone organisations and support people and projects that are working to address root-level systems change – shifting worldviews, purpose and power.


3. Recognise that meaningful change takes time and that tackling root causes may not produce direct and tangible environmental impact for some time – but when it does it will be significant and lasting.


4. Convene and cultivate collaborative communities for shared strategies, learning and leveraged impact. Do this with within and across the ecosystems of philanthropy and NGO/environmental organisations – and over a longer period of time.


5. Align your purpose and practice with everything you do – this includes things such as aligning programme and grant activity with endowment and reserve strategies.

Jen Morgan enables pioneering leaders and organisations to design and develop systems change strategies – so that human systems can align with the planet’s natural systems. As an intrapreneur within WWF-UK, she co-founded The Finance Innovation Lab – a newly independent systems change organization enabling a fair, democratic and responsible finance system. In addition to supporting systems entrepreneurs, she is an external advisor for the RSA’s Economy, Enterprise and Manufacturing programme and a Fellow at Cambridge University’s Judge Business School Centre for Social Innovation.

 

Royal Society of Arts Journal - Article

I was recently invited to write an article for Royal Society of Arts Journal - Green Economy - September 2015 edition. 

This was a great opportunity to share my learnings of leading the Finance Innovation Lab and showing how we have used complexity science in designing and implementing our strategy for change.  

Enjoy! 

This article was originally written for and published in The Royal Society of Arts (RSA) Journal – September 2015.

 The Finance System – It’s Complex

By Jen Morgan and Chris Hewitt of The Finance Innovation Lab

Cast your mind back to 2008. We sat at the table, poured our morning coffee and read the headlines: “Banks hit by $5.9bn fine for foreign exchange rigging.” A few weeks before it had been “Deutsche Bank fined £1.7bn for LIBOR failings and misleading the regulator”. And before that, “HSBC bosses very ashamed and humbled as bank faces criminal probe threat over its tax dodging”. We may have been shocked but we had grown to expect such news. We were surprised, yet unsurprised, as to how quickly this news came and went. By lunchtime, the headlines were usually off the front page of websites and caused little in the way of political comment. In fact, in spite of the huge impact of the 2008 financial crisis, we seem to have accepted this dysfunctional financial system as a force of nature, rather than a market shaped by human values and intention.

Finance is a complex system. One of the reasons that it has not been dramatically reformed since the crash is that its very complexity has made it hard to sustain public discourse. Citizens, politicians, journalists, civil society and most people who work in the financial services sector –

apart from the few who have exploited it – are intimidated by this complexity. As a result, we feel ill equipped to advance the sort of systemic solutions that are required. But in order to create an economy that will enable us all to flourish, it is essential that we understand the truth: that we are all part of a complex interconnected financial system. Embracing this fact can empower us to take new and diverse approaches to change that will lead towards a financial system that is democratic, responsible and fair.

To do this, we need an appetite to deal with the root causes of this serious dysfunction. That requires new, long-term and systemic approaches to change; fresh approaches that The Finance Innovation Lab and a growing number of organisations are pioneering. Established in 2008, we empower positive disruptors who are enabling a democratic, responsible and fair financial system.   We work at multiple levels to connect people who seek to change the financial system, as innovators and entrepreneurs, civil society advocates, or ‘intrapreneurs’ within their own organisations. Our approach draws heavily on systems thinking, complexity science, values-based leadership and action learning.

Understanding Complexity

It is understandable that our society, our government and UK plc have failed to transform the financial system. For the most part, we are trying to fix a problem with mind-sets and strategies that aren’t fit for the job. We have commonly seen the finance system through a mechanistic lens of solid hierarchical structures, with efficient intermediaries that maximise financial returns. And similar to a mechanic, we think we can ‘fix’ the machine with the existing tools in our toolbox. Common tools proposed include ‘getting the regulation right’ or ‘encouraging challenger banks and letting competition and the market do the rest’. But time and time again, we find ourselves trying to deal with the never-ending breakdowns and broken parts.

Many of us are now starting to wake up to the reality that we are working with a complex and dynamic system rather than a machine, and that responses need to be designed accordingly. Andy Haldane, Chief Economist at the Bank of England has been a pioneer in helping to reframe how we see finance. In a recent speech at the Lorentz Conference on Social Economic Complexity, he explained:  “Modern economic and financial systems are perhaps better characterised as a complex, adaptive ‘system of systems’. Global economic and financial systems comprise a nested set of sub-systems, each one themselves a complex web. Understanding these complex sub-systems, and their interaction, is crucial for effective systemic risk monitoring and management”.

So what exactly is a complex system? Complex systems, such as social and natural systems, all have their own unique intention and purpose. They are dynamic and formed by relationships. They are emergent and unpredictable. They are non-linear and the whole often behaves very differently to the sum of the parts. They have many feedback loops and information flows around the system. They are adaptive, constantly learning and evolving.

Purpose, Values, Power

How can we best catalyse change in complex systems like the UK financial system? In her seminal thinkpiece 12 Leverage Points to Intervene in a System, Donella Meadows, systems thinker, futurist and author of Limits to Growth, maps 12 leverage points of how to catalyse change in complex systems. The most influential leverage points include: tackling root issues such as purpose and values, shifting power dynamics; and changing the structure of the system such as the rules and standards; and opening the feedback loops of information.

How does looking at finance through the lens of complex systems shed new light on the challenges we face? Firstly, the predominant purpose of the finance system has become self-serving rather than serving ‘the whole’ (that’s us and our environment). There has been little meaningful conversation about the purpose of the financial system, either in its current form or its aspirations. It presents itself as a sector that is maximising profits for the UK economy. But others might feel it should primarily serve the needs of the rest of the economy and society. Before we start redesigning the system we need to ask this question about purpose.

Secondly, our current financial system is underpinned by values and cultures that are extrinsically motived such as competition, hedonism and conservation. Research from the Public Interest Research Centre (PIRC) shows that extrinsically motivated values are less open to change and reinforce individualism. the ‘self’. Yet as our economies and societies become more interconnected, we need our institutions to display values that are intrinsically motivated such as kindness, creativity and responsibility. So a pertinent question becomes: How do we cultivate a system that promotes intrinsically motivated values?

Thirdly, the system is controlled by a powerful minority who hold the vested interest and is not accessible to those who have an interest in creating a more human-centred financial system. The UK finance sector is the biggest UK lobbyist in the EU. This is a powerful force that is holding the existing system in place. It is preventing more radical and deep rooted change to emerge. We need a new enabling power that serves society and the environment.

Envisioning a Human-Focused Finance System

In 2008, the anger of society at the consequences and causes of the financial crash was given a powerful voice by the Occupy Movement. This discontent resonated across whole swathes of UK public sentiment. But what was missing was any kind of strategic and systemic approach on creating the long-term enabling conditions for change. With no real strategy in place, any kind of public dialogue over the future of the finance system was quickly swamped by the complexity which served to keep the vast majority of fearful policymakers, public and media disconnected from the system, and thus unable to be open to see how change could happen.

Since then, however, there has been a surge of enthusiasm from outside the traditional finance sector, partly spurred by new technology, which has sought to deliver some financial services in a way which is more connected to people. Peer-to-peer lending, crowdfunding and values-based banks have flourished where the high-street banks have continued to stagnate. New products, such as climate bonds, have been developed to stimulate long-term investment in socially and environmentally useful projects, such as sustainable energy infrastructure.

At the same time, civil society groups, such as The Finance Innovation Lab, ShareAction, New Economics Foundation (nef) and Positive Money have been quietly co-creating a vision of a finance system that is democratic, responsible and fair. This vision has four  Leverage points for change.

 First, a banking system that has a diversity of business models, offering more genuine and fair competition for savings, business loans, mortgages, payments and support in financial management. The globally focused, shareholder-owned high street banks have failed to deliver this. We need more mutuals, credit unions, innovations in payments, locally focused banks, peer-to-peer lending and other creative ways of providing these services.

Second, an investment and capital market that is shaped by the long-term interests of savers, from whom most of the capital originates, in the form of pension funds, insurance or other savings. Our policy framework must reward long termism, transparency and valuation of social and environmental risks. It should, correspondingly, penalise excessive speculation, extraction of rent through hidden fees and a discounting of long-term risks like climate change.

Third, a system of monetary policy intervention, which takes fully into account the social, environmental and economic consequences of those decisions. This would require that we move away from seeing monetary policy as a technocratic activity free from ‘interference’ from politicians, towards one where there is real public and democratic debate and oversight into the use of such tools.

And lastly, active encouragement for innovation and creativity in financial services that increase accessibility and transparency, provide benefit to the whole of the economy and are socially useful. This will require regulation to be more flexible, with fewer barriers to entry, but also placing the responsibility on the innovators to prove their worth to the rest of us.

This transformed finance system should have an explicit purpose to serve society, the environment and the wider economy. This will require leadership from government and, within finance institutions themselves, a rediscovery of the ‘service’ in financial services. We must not continue to see the sector as an ‘industry’ whose profits are a key driver if the UK economy. Research from the Bank of International Settlements, the global ‘Bank’ of Central Banks, shows that if a financial sector becomes too big as a proportion of a national economy, it starts to damage the rest.

The values of its participants will need to reflect that new purpose, both as an explicit intention and in response to market and policy pressures. Competition will increase from innovators who are not afraid to use greater transparency as a means to attract market share and reduce costs to consumers, rather than as something to withhold in order to protect profits and create barriers to entry. Those who cling to the latter will look increasingly outdated and irrelevant.

A more diverse ecosystem of market players will also help to dilute the power of vested interests to shape policy in their favour. One of the roles that The Finance Innovation Lab has played is to bring innovators together with policymakers, in order to build trusting relationships and host in depth conversations about creating a more diverse market. As part of our strategy, in 2012, we held a summit with peer-to-peer lenders, the Treasury, European Commission representatives and others to focus on why and how the new sector should be regulated. We have also held workshops with senior staff at the FCA and Bank of England focusing on the needs of new business models and removing barriers to entry. All of this, combined with the work of many others, has resulted in new regulation for crowdfunding and other models of financial disintermediation, building the market for democratic finance.

Accelerating change
Changing complex systems is a long-term game and we need to build our change strategies to reflect this context. The Finance Innovation Lab has established the infrastructure for systems change that will enable collective impact at multiple levels in the financial system. This infrastructure allows for the ongoing experimentation and practical application of new approaches, builds capacities and cultures of creativity, learning and evolving, and cultivates strong communities of influence.

What we have learned in the Lab is that there is no ‘one’ solution and that change takes time. This is especially true when working with deep-rooted issues of purpose, values and power. Multiple approaches of change across the finance system are needed, including amplifying a narrative for finance, evolving approaches of current mainstream practices, advocating for structural reform and cultivating the niches of positive disruptors[A1] .  Positive disruptors who are all actively working towards ‘repurposing finance’.

 

Ultimately, we are all part of the financial system. There is no system ‘out there’, separate from us. How we choose to relate to money and our finances will directly influence how effectively we can scale change beyond ourselves. Will we choose for finance to be an enabler of a human-purposed economy, or will we choose for finance to remain the dominant force in a self-serving economy? Seven years after the start of the crisis, with banking scandals still hitting the headlines, there is no better time to make your choice.

 

 

Why the financial system needs an innovation lab?

Here is a recently blog that I wrote for Nesta .....

fotoflexer_fil_2.jpg

It was 15 July 2008 – there was tension in the air, as a conversation started in the Royal Festival Hall, London, UK, between four likeminded people: “The challenges we face today are so complex – there has just got to be another way that tackles the roots of these problems.”

The Living Planet Report had just been published – the trend of 30% extinction of all species on planet earth continued. Little did we know that two months later the Lehman Brothers crisis would help to spark the global financial crisis.  

It was then that four of us, who worked for WWF-UK and ICAEW, embarked on setting up The Finance Innovation Lab, which is now on its way to becoming an independent organisation in order to scale its work. Work that aims to empower positive disruptors in the financial system, connect people who are changing the system, develop them as leaders and help them scale their work.

We set up The Finance Innovation Lab for five very important reasons, which are still hugely relevant to the financial system today, and which guide our work:

1. Dealing with the complexity requires a systems approach to change

For too long, the financial system and its actors have been working as isolated components in a big machine. However, the financial system is an interconnected human system that is formed by dynamics, patterns and relationships. Only when we see the system as whole, and all of its complexity, can we then focus on high potential ‘acupuncture’ points that will accelerate change. In The Finance Innovation Lab we have paid attention to leverage points such as P2P Banking and cultivating new business models in finance.

2. Shifting purpose, values and culture takes time  

Not many people would disagree that the current financial system is self-serving, rather than serving the common good. It has been shaped by values such as competition, individualism and hedonism. For the system to serve the whole, we need to strengthen cultures that are underpinned by values of democracy, responsibility and fairness. Inspiring new values and cultures does not happen overnight. It will take decades. We have built a sustainable infrastructure for the Lab in order to cultivate and accelerate change in values and culture. A key part of our sustainable infrastructure is building deep long-term, collaborative partnerships with people and organisations. This is embedded in our culture and comes through in the way that we work. Over the last six years, in co-operation with many of these partners including business coaches, Shirlaws, Tim Jackson of the University of Surrey, Nesta and the New Economy Organisers Network (NEON), we have successfully run a number of incubators such as UnLtd Futures and Campaign Lab — which is now in its third year.

3. Demonstrating ‘the new’ needs safe space for experimentation

New business models in finance and their entrepreneurs have many forces against them when they start up – they often lack resources, leadership skills, community support or the influence to shape the wider market conditions. Innovation labs are needed in order to create safe spaces to try things out, to grow and to build the fitness needed to survive in a system that does not currently support ‘the new’. Check out The Finance Foundry, an incubator for new alternative business models in finance. It will be launched in the summer of 2015.

4. Changing power dynamics requires collaborative communities

The UK finance sector is the biggest UK lobbyist in the EU. This is a powerful force that is holding the existing system in place. It is preventing more radical and deep rooted change to emerge. We need a new enabling power that serves society and environment. And this takes the convening, alignment, strategy and the infrastructure of an innovation lab in order to build trusting and collaborative communities who are able to enable a new form of democratic power. To this end, The Lab is convener of the Transforming Finance Network, a network of civil society organisations dedicated to changing the financial system. In January a coalition of civil society groups, led by The Lab, set out five fundamental recommendations for transforming finance.

5. Inspiring new narratives through collective intelligence and insight

There’s lots of noise in attempts to change the financial system – but no vision of the future. Common narratives are much more powerful than hundreds of competing voices and are more likely to inspire and influence a new landscape. An innovation lab helps to cultivate collective insights and intelligence through action learning processes. Through our incubator programme, Campaign Lab, we work with social, environmental and economic justice campaigners to help them understand the systemic political and economic root causes that they need to tackle so that they can create meaningful change. Taking the narrative of change to the door of policy makers is a core element of The Lab’s work. A recent submission, to the Competition and Markets Authority in conjunction 20 civil society and alternative finance organisations called on the government to pay particular attention to fostering greater diversity of business models within the financial system.   

These five objectives underpin all our work to create a financial system that is democratic, responsible and fair. This is a critical time when more radical and disruptive social change is urgently needed and consequently investment in ‘systems change infrastructure’ is essential. The recent funding award to The Finance Innovation Lab, from Friends Provident Foundation and Joseph Rowntree Charitable Trust (JRCT) of a combined total of over £250,000 was given specifically for the purpose of establishing systems change infrastructure.  

The funding will provide the financial flexibility that The Lab needs as it transitions to independence, to invest in the core costs needed to support our work in building collaboration in civil society, to grow communities, capacity and solutions for transformational change. For people and for planet.

To find out more about the Finance Innovation Lab see: www.thefinancelab.org. This blog is part of our March edition of Lab Notes - a monthly digest for public sector innovators.

- See more at: http://www.nesta.org.uk/blog/why-financial-system-needs-innovation-lab#sthash.cEWmAaJb.dpuf


Photo Credit: tolkien1914 via Compfight cc

Attracting Investment - What Works!

There is so much to think about when ‘attracting’ investors to your work.  

It’s a bit like dating:  you need to show you’re the different dimensions of who you are.   First impressions do matter.   And you are aiming to discover if there is alignment – in intention, values and resonance. And often, you might only have a small window of time to see if there is connection.  


This is something that’s been on our minds at The Finance Innovation Lab www.thefinancelab.org @thefinancelab as we prepare to take our work to scale.  

Here’s what we have learned along the way in attracting abundance to our work.  We hope these insights help you in your work too! 

1.       Start with a story

Find a way to draw your audience – swiftly and deeply.    Stories connect.  Stories inspire.   What is a short story that paints a picture of what you do?  The more personal the story, the better.   How can you weave in the story of ‘self’ – why did you start your business?   What is your higher purpose?

2.       Narrate the Need

What is the big need in the world that you are meeting?   What is the background to this need?   How will what you are doing help to make the world a better place?   How will this help to change lives?   What are the top three areas of impact that you want to have?   What is your theory of change?

3.       Magnify your Market

Who will benefit from your work?   Why do they need your service?   Can you describe them and who they are?    What is your relationship to them? What value do you bring them?

4.       Present your Product

What is your product?    How does it work?  Can you demonstrate how it works through pictures or a customer journey?  What is the visual representation of your product?

5.       Exemplify Experience

Give examples of your track record.  What pilot tests have you done to test the market and its needs?   What have you learned from this?   What successes and impact have you had so far?   How are you measuring value? Give testimonials from people on how it’s changed their lives.

6.       Underline Uniqueness

What makes you so unique?   How are you different from other players in your marketplace?  What are your strengths and assets?  What special recognition have you achieved?  How are you creating large scale change?

7.       Demonstrate Demand

Show that there is a market demand.   Who is demanding your services? Where is there opportunity for growth?

8.       Top Team

Who is in the team?  What are their talents and skills and experience?  What are your values and culture? How are they recognised in the world?   Who are they backed by?   How do they complement each other? Demonstrate that you have a tried and tested strategy. 

9.       Powerful Partnerships

Who is involved already?  What commitments have they made?   What is there reach and credibility?    How do you work with them?  What is important to them?

10.   Showing Scale    

Be clear on why you want to grow?   What is your strategic focus?   What assets are you leveraging?  How is your model replicable and transferable?  How do you want to grow? Be honest about risks and challenges.

11.   Focused Financials

What resources do you need to grow over the next 3 years?   Who has invested in you already?  What investment has been secured? What is your business model?   What is the specific and clear ask to investors?  

12.   Recapping the Return

Why should people get involved?  What are they ‘buying’? How will their contribution make a difference?  Paint a picture one year from now.  Invite people into your dream.

13.   Basic Behaviour

There are many intangible and emotional things going when one person is attracted to another.  Investors invest in people.   So don’t forget when you are engaging with investors in person:  smile and have fun, show respect for yourself through how you dress, ensure a high quality presentation, including graphics, know your stuff,  convey the love of what you do and have belief in yourself and your work.

Being A Responsible Investor

Money is an amazing thing.  Although a human created concept, it has become an elemental force of its own - it moves people, companies, markets and nations.

Money is a great mirror of society and, how we relate to it, is reflection of our worldviews, values and beliefs.  For many, many people, money is power, money is energy and money is identity.

And for me, money -- and how I invest my money -- is totally about responsibility.

On the eve of National Investment Week, October 14th -21st, here are two key reasons why I choose to be a Responsible Investor:

1) Responsibility as an ‘Active Investor’

As humanity, we are facing an interesting crossroads – and in effect we have two main choices – either we choose to be on the ‘inactive’ or the ‘active’ side of enabling a positive future.

Frankly, the challenges we face require us to be on the very ‘active’ side of the game.  This means taking responsibility for our actions.  Every thought, every word and every penny – makes a difference.  It does.  What if we all believed this? – together, we would be an awesome force for change.

It is no longer good enough to wait for others to save us – not the government, not business, not the media, not the law.  We can no longer pretend that it does not matter if our pensions, 75% of value of the FTSE listed companies, are feeding oil, gas and extractives companies in their rapid destruction of the planet.  Our precious future.

So we have a choice.   I choose to invest in companies like Good Energy, Neal’s Yard and Abundance Generation.  I do this through my Self Invested Personal Pension (SIPP), my online cash ISA with Triodos and my current account with Cooperative Bank.  These are funds and companies that are making a positive impact on the world.  They are business models that are pioneering the future.  They need our backing.

2) Responsibility as a ‘Smart Investor’

I also believe that companies that are strategically building business models around the future realities of ecological limits, human well-being and equality are simply just better run companies.   They are the ones who are going to thrive in the future and will provide me with healthy returns for my savings.

Take a look at Triodos and the Cooperative Bank for example.   Since July, Triodos, a bank that invests only in companies that are supporting positive impact, has seen a 78% increase in enquiries for people wanting to open savings accounts.  It has drawn in double the amount of money coming into its accounts compared to last year.  The Co-operative Bank has seen a 43% increase in people switching to their accounts.

We have seen the demise of big business models that are out of touch with reality – especially in the banking sector.   Some businesses will be able to continue to extract short-term profits, however in the medium to long-term, I believe that large organisations, (and the pension funds that invest in them), will be too slow to adapt to our rapidly changing world and the fact of ecological limits.

My view is that it will become harder and harder for big business, and pension funds, to deliver returns.  We are in an intensifying ecological and social crisis-we are going to experience even more chaotic effects in the next 5, 10 20 years and beyond.  And systemically, this will no doubt put markets into turmoil.  So it is in our universal financial interest to invest in companies that are being prudent with our social and environmental capital upon which our future financial capital depends.

I’m in it for the long-run and I trust that the better run businesses will be the winners – not only enabling a positive future for humanity but also creating healthy and steady financial returns.

So for these two important reasons, it is common sense to me to be a responsible investor.    Money matters and every choice with your investments makes a huge difference!   YOU are the difference.

Here are some resources that I have found useful:

MoveYourMoney.com – info on how and where to move your money

YourEthicalMoney.org – info on various types of financial products

FairPensions.org- info on how to engage your pension fund

Barchestergreen.co.uk– support on how to manage your investments

uksif.org – info and resources for to manage your investment savings

Abundancegeneration.com- an example of a new community investment model

GoodEnergy.co.uk- an example of a thriving business model

Triodos.co.uk- an example of a thriving business model

Kiva.org- an example of a peer to peer lending model