"Transforming Economics into True Wealth" Statement November 2012

I'm a signatory for this statement on TRANSFORMING ECONOMIES INTO TRUE WEALTH

Posted on Ethical Markets website: 

"This is an invitation to fully engage in the planetary whole-system shift now under way.  Many SRI investment professionals recognize our human responsibility for the many breakdowns in our societies and enfolding ecosystems resulting from our limited consciousness: climate change, hunger, poverty, conflicts, financial crises and ecological destruction. These systemic breakdowns are accelerating due to global interconnectedness and now driving the breakthroughs worldwide occurring below the radar of the mainstream mass media. The 193 country members of the United Nations have recognized human interdependence and that no nation acting alone can solve these global systemic crises.  Thus, they have pooled their sovereignty, however imperfectly, seeking solutions through treaties, agreements, protocols, institutions and agencies to promote the common good and all life on planet Earth.  Likewise, many public, private and civic sector organizations, professional and academic groups are also coalescing to take broader responsibility."

The statement is:

TRANSFORMING ECONOMIES INTO TRUE WEALTH

Invitation To Fully Engage In The Planetary Whole-System Shift Now Under Way

We undersigned investment professionals recognize our human responsibility for the many breakdowns in our societies and enfolding ecosystems resulting from our limited consciousness: climate change, hunger, poverty, conflicts, financial crises and ecological destruction. These systemic breakdowns are accelerating due to global interconnectedness and now driving the breakthroughs worldwide occurring below the radar of the mainstream mass media. The 193 country members of the United Nations have recognized human interdependence and that no nation acting alone can solve these global systemic crises.  Thus, they have pooled their sovereignty, however imperfectly,seeking solutions through treaties, agreements, protocols, institutions and agencies to promote the common good and all life on planet Earth.  Likewise, many public, private and civic sector organizations, professional and academic groups are also coalescing to take broader responsibility.

We humans are leaving the 300-year fossil-fueled Industrial Era based on digging resources from the Earth and are now looking up to our Mother Star, the Sun, increasingly harvesting its daily photon shower just as plants have learned to do – providing sustenance for all species in our biosphere.

Finance has lost its way, strayed from its stewardship role, and become a global casino, a bubble exacerbating many global problems. We, along with so many friends, have addressed reforming financial markets and have been investing in many creative activities and successful models.  Deeper collaboration and broader engagement are now needed at all political levels, from global to local, to better coordinate our efforts to build equitable societies based on Life’s Principles and the successful evolution of Earth’s 30 million species over 3.8 billion years.

Our socially responsible, ethical, ESG, triple bottom line, impact investment communities have long championed innovative investment practices to support well-governed businesses and communitieswith positive social and environmental outcomes. Our industry has led the way in directing resources toward solutions-based socio-economies. After more than twenty-five years of growth and success inour investment industry, social inequality and environmental degradation have reached unsustainable levels, and underlying economies are still:

•Unsustainable: They over-consume and degrade the resources upon which their long-term prosperity depends.

•Unfair: They multiply financial advantages to those already advantaged at the expense of those most in need.

•Unstable: They lack resilience in a time of growing volatility and rapid social, political, technological and ecological change.

•Undemocratic: They operate with inadequate democratic controls and accountability on the part of their most powerful organizations – corporations, financial institutions and governments.

The health of our industry is ultimately conditioned upon the health of our planet and its peoples. Toensure that there will be economies worth investing in, we call on our colleagues to support cross-sector efforts to transform our failing political economic system. Specifically, we ask for greater support for the following key system changes that can accelerate the transition to a political economy that sustains people and the planet.

1.Restoring trust and integrity to currencies and monetary systems.

2.Transforming the global financial services industry from extractive to creative of community health and wealth by:

 •Supporting a financial transaction tax, as approved or implemented in many countries.

 •Protecting the commons and public infrastructure from privatization.

3.Building a new financial system that includes, but is not limited to:

 •Restoring a public banking system.

 •Directing investments to undercapitalized communities through Community Development Financial Institutions and microfinance.

 •Creating the enabling conditions to support flourishing local living economies.

 •Investing democratically through crowdfunding.

 •Continuing to involve mainstream financial institutions which demonstrably share our goals, values and ethics.

4.Restoring democracy and our collective capacity to regulate, tax and invest in public priorities by limiting money in politics, amending “corporate  personhood” and the “money isspeech” doctrine, and promoting public financing of elections.

We celebrate the growth and success of our industry, but the time for a narrow focus oncompetitively developing the market for our own products, brands and services is past. We honor and acknowledge those of us already engaged in system change.  Let us challenge ourselves to go further and exercise ethical leadership by engaging our energy and resources in collaborative networking to manifest the integrated system change we all believe will lead to a more positive future for all life on this planet.

Co-conveners and Initial Co-signers, November 2012

Co-conveners:

Hazel Henderson, president, Ethical Markets Media (USA and Brazil)

Susan Davis, president, Capital Missions Company (USA and Ecuador)

Co-signers

Mariana Bozesan, Ph.D., president & founder, AQAL Investing, Munich, Germany

Katherine Collins, founder and CEO, Honeybee Capital, Boston, MA

Leslie Danziger, Co-founder and former Chairman of Solaria Corporation; Co-founder and former Chairman/CEO of Lightpath Technologies, TX, USA

Mary Houghton, co-founder, Shorebank, Chicago, IL

Alan F. Kay, founder, AutEx and Public Interest Polling, St. Augustine, FL

Kathleen Paylor, Chief Spiritual Officer, Conscious Capital, San Francisco, CA

Helen Rake, principal, Collins Capital Management, Jacksonville, FL

Rosalinda Sanquiche, executive director, Ethical Markets Media, St. Augustine, FL

Sarah Stranahan, New Economy Network, New York, NY

Stuart Valentine, CenterPoint Investment Management, Fairfield, IA

Michaela Walsh, founder, Women’s World Banking, New York, NY

Gregory Wendt, CFP, Stakeholders Capital; founder, Green Economy Think Tank, Santa Monica, CA

Additional signatories

Michel Bauwens, P2P Foundation

Terry Link, Starting Now, LLC

Monika Mitchell Founder/CEO Good Business New York

John Rogers, Value for People, Germany

Elisabet Sahtouris, PhD, Evolution Biologist, Futurist, Professor, Speaker, Consultant

Stephen Viederman, Board, Network for Sustainable Financial Markets

Transforming Finance - a top priority

Last fall, I had the pleasure of joining a group of leaders in the new economy and responsible investing movement at the home of Hazel Henderson for the annual "SRI Leaders" retreat. At the retreat we reflected on the state of the global financial system and further offered perspectives and solutions for transforming finance to serve the world, rather than extract from it. Here's a link to the Statement: "Transforming Economics into True Wealth (November 2012)"

Hazel posted an article on CSR Wire based on the retreat, and the Statement which we created.

Here's the full text of the article:

By Hazel Henderson

Despite incremental reforms, the Dodd-Frank Act in the USA, Basel III and the 0.1% financial transaction tax now approved by EU finance ministers, the global financial casino is still playing.

Financial lobbying still seeks to block or weaken reforms and floods of money distorting democratic politics, loosed by the Supreme Courts’ 2010 Citizens United decision, are still flowing unchecked.  Billions still secretly fund attacks on climate science, social safety nets, teachers and other public employees and their pensions. All these efforts to repeal FDR’s New Deal and a fairer economy continue unabated.

Ethical Markets’ Transforming Finance initiative, launched in 2010 with its first Statement, emphasizing the bigger picture: finance is a part of the global commons, to serve real economies, not dominate them, and its high-frequency traders and all market players use and rely on taxpayer funded infrastructure: the internet, satellite communications, computers, wireless transmission over public airwaves.

Many high-minded financiers who have co-signed this Statement and later ones are former Wall Streeters. They are pioneers of ethical, SRI firms and are also interviewed on our Transforming Finance TV series, including John Fullerton, Amy Domini, Susan Davis, Karl Kleissner, Alisa Gravitz, Terry Mollner, Katherine Collins, Leland Lehrman, Sarah Stranahan, Michaela Walsh, Ben Bingham and author/lawyer Ellen Brown (available at www.ethicalmarkets.tv and www.films.com).

Our latest Transforming Economics Into True Wealth (November2012) is an invitation to fully engage in the planetary whole-system shift now under way. These investment professionals recognize our responsibility for the many breakdowns in our societies and ecosystems resulting from our limited consciousness: climate change, hunger, poverty, conflicts, financial crises and ecological destruction.

Jan 24 2013 Radio Interview on Business Rockstars KFWB about "Conscious Capitalism"

Here's my interview on the radio show "Business Rockstars" about my views about the concept of "conscious capitalism" which is also the title of the new book by Whole Foods CEO John Mackay and Professor Raj Sisodia 


In the interview radio host Ken Rutkowski and I discussed the different paradigms in business. Most notably we distinguished between the outdated view of business as only serving shareholders and the profit motive to businesses recognizing the opportunity to not only succeed but thrive by serving all of the stakeholders in the business.

This more sophisticated paradigm leads to a more robust and resilient business while at the same time stakeholder engagement is a key driver in profitability for the most successful corporations.

I trust you'll enjoy listening to the radio show as much as I did sharing my views.

Here's a link to the show, my piece starts at around minute 44.

Bringing Good Capital Home with a Living Economy Fund

Originally posted on CSRWire.

When was the last time you asked a financial advisor to put your money in a financial fund that would support environmental and social concerns only to be met by a blank stare, because the advisor had no knowledge of that such a fund existed?

Or perhaps you went to your advisor and said, “I’d like to invest my money locally, in small businesses that are struggling here in our community and help them improve our local economy. Do you have a fund that will do that?”

Did the blankness of the stare deepen?

As a financial advisor I regularly place my clients in vehicles that might fundamentally change the way the economy works and at the same time provide a competitive return on investment. Unfortunately, there are simply few if any local choices that will satisfy such needs.

As a member of the California Financial OpportunitiesRoundtable, we ran into similar problems around providing access to capital locally. With SEC regulations and government investor protocols, targeting investments within a community through traditional financial vehicles is often difficult -- but not necessarily impossible.

Needed: Local And State Support For Small Business And Micro-Enterprise

We know that many Community Development financial institutions have been flooded with available funding lately, which says that the local interest exists, but the money is not yet flowing out for  investments in small local businesses and startups.

Getting money into the hands of those who can help build a healthy economy requires an economic development strategy at both the local and state levels that supports small business and micro-enterprises.

Our visions of global grandeur have often redirected our focus away from investing and buying locally, often fueled by the possibility of windfall profits in larger markets. But that focus has pulled us away from the richness of our community businesses and the economy they support. These businesses operate adjacent to the multinational big boxes that can sell for less, but become extractive from the local economy rather than generative.

Transforming Our Finance and Securities Laws

In the book, Creating Good Work: The World’s Leading SocialEntrepreneurs Show How to Build a Healthy Economy, (Palgrave, 2013) I wrote in my chapter about the transformation required to see money as part of the natural biosphere in which it operates. If we can transform our perception of money, we can simultaneously address issues such as the needs of communities, quality of life, human justice, food quality, education, infrastructure, energy security, and soil fertility.

The issue, of course, is that our securities laws and our financial vehicles operating under those laws don’t always allow us to invest our money in ways that can have an impact on these very important living issues.

This is especially true for those unaccredited investors whose net worth is less than $1 million. Equity crowdfunding may allow for more of this kind of investment to take place in the future, but we still run up against the lack of financial vehicles that would allow us to direct investments toward  environmental and social issues in our local communities.

In addition, financial advisors are also limited in this arena by the choices available through traditional channels. These investments are equally as prudent as others on the market while at the same time improving the quality of life in the communities. The problem is they are rarely offered because in many cases the traditional marketplace doesn’t know they exist.

Alternative Funding Sources

Getting funding into the hands of local businesses that are doing good work is a real challenge in this climate. However, instead of relying on traditional bank loans, alternative funding sources could be created for locally-owned businesses.

One new model could leverage network thinking and connectivity to create scale. It would be transparent so it could deliver the desired social, economic, financial impacts for its stakeholders. It would also be a true “neighbor to neighbor” investment experience, allowing local investors an opportunity to achieve a “living return” while at the same time supporting the locally owned businesses and enterprises in their community, and for that matter, communities all over the country.

Living Economy Fund Model

One model we are developing based on this thinking is what we're calling a “Living Economy Fund,” which would be open to all investors. It would provide support to locally-owned, mission-driven businesses nationwide, while at the same time offering the necessary liquidity, transparency and security to retail investors so they could achieve a living return. Currently, such investments are only available to accredited investors.

A key element would be an eligibility requirement so that it could be offered through retail investment  platforms with a low to moderate investment minimum, commensurate with mutual fund minimums and experience. Additionally, the investments would need to be structured so that yields would be high enough to offer a growth of investment for savings, while at the same time offering an affordable borrowing cost to local businesses.

A core component of such a fund’s management and purpose would be embedded within linked networks of businesses (for loan sourcing and review) and an online community to connect businesses with their investors, much like Kiva or Prosper.com. Communities such as Green America, BALLE, and Slow Money, all have aspirations to create such an experience.

A fund like this can then be simultaneously offered in different contexts as a “white label” experience, and also offered on a national basis to fiduciaries nationwide. Thus, community organizations can brand the fund for their constituents, while investors can enjoy the benefits of national diversification.

In addition to its direct benefits, the creation of funds based on a “Living Economy Fund” model would enable others within the financial services and impact investing community to leverage and utilize the business model created to further harness the estimated $120 billion in demand for impact-oriented community investing.

As is stated throughout Creating Good Work, we have to be willing to apply the notion of deliberate disruptive design to any situation that is not delivering the impact required. This is true whether we are trying to end childhood hunger, creating more collaborative solutions to climate-based influences, or building a health local economy.

More of the same simply won’t carry the day. It’s time to build something new.

- Greg Wendt and Ron Schulz

Green Transition Scoreboard - $1,000,000,000,000 per year to achieve an energy evolution

The Unecessary Algebra of Scarcity: Scarcity = Abundance - Trust

A video about Green Business Networking which I founded in 2006

Green Business Networking in Los Angeles from Stephon Litwinczuk on Vimeo.

Film on New Economic Models - "Fixing The Future"

In our political debates, races, etc. there is always room for more conversation about the sustainable, thriving economies we can create in our own home towns. Here's a very inspiring film which I encourage you to watch if you are wondering what can be done to fix our economy, and our future!

Watch Fixing the Future on PBS. See more from NOW on PBS.

I was on the radio show "Business Rockstars" with Ken Rutkowski

Today I had the pleasure of being on Ken Rutkowski's amazing radio show "Business Rockstars" on KFWB News 980 in Los Angeles with over 800,000 listeners.

We had a wonderful conversation about sustainable business, ethics in business, our flawed economic paradigm based on the illusion separate from society and nature, B-Corporations, organic food labeling, sustainable investing, maximizing the quality of relationships in business for success, community relationships to business, corporate social responsibility and sustainable and responsible investing.

Hear the interview here, my brief interview starts at minute 55.

I helped create the Access to Capital Guidebook as a member of California Financial Opportunities Roundtable

A key issue to grow our sustainable economy is moving capital to the businesses who need it most and businesses who are going to create jobs, wealth, and improvements to the quality of life for communities around the world. 

Entrepreneurship and local businesses are some of the key drivers to keeping our communities thriving, and the institutions which are meant to finance such businesses have lost human scale in the last 40-50 years. Big banks getting bigger, Wall Street dealmakers only doing bigger and bigger deals - leave much of the small to medium sized businesses without easy access to much needed capital.

Furthermore - small businesses which are privately owned are more likely to be in tune with the needs of society, the environment and the community of stakeholders around them. Thus the more ways we can support locally owned, small and medium sized enterprises, the better.

To that end, I have been very involved with the local investing movement for the last 7 years.

Most recently since mid 2011 I have been a member of the California Financial Opportunities Roundtable - a group of experts convened by the USDA Rural Economic Development and Federal Reserve Bank to identify pathways for moving money into the businesses and communities which need it most, and who will drive the most positive change for their communities. We represented finance, impact investing, philanthropy, business, economic development, government and more

The California Financial Opportunities Roundtable (CalFOR) is part of a statewide initiative supporting development of regional industry clusters to provide jobs, entrepreneurial opportunities, business growth, public and private sector investment in value-chain infrastructure and sustainable communities throughout California. Working with a wide array of partners, the goals of that project include:

• Innovation in Capital Markets and new sources of investment for projects and business growth.

• Expansion of regional food systems and associated value chain opportunities.

• Growth of biomass utilization, biofuels and renewable energy production.

• Development of region-specific industry clusters and related business networks.

• Improved Rural-Urban collaboration and related infrastructure deployment

Our ACCESS TO CAPITAL GUIDEBOOK is available for viewing and download here.

Evolving our businesses to become Common Good Corporations

There are many stories over the last 20 years of examples of ethically motivated businesses who grew to such a large scale which left the founders with choices either merge, sell out or cooperate with major corporations. The challenge has often been that the values and priorities which originally inspired the entrepreneurs from the beginning were very difficult to maintain when the business or brand is continued in the larger context, or the company is owned by a larger entity who does not share the priorities for the common good of the original entrepreneur.

One solution has been to adopt the B-Corp model, by baking the values into the DNA of the company.

My colleague and close friend Terry Mollner is an expert on such issues, and has played a meaningful role in this context for some time.

Here's a video of Terry discussing the heart of these issues, where he clarifies his vision that all companies have the opportunity to make their highest priority the COMMON GOOD, invites us to all discover the role we can play in bringing about this new way of doing business.

Common Market - What a Food Hub can do for the food economy!

We can create jobs, and healthier community by simply shifting the way that food is created and sold in our cities. It's that simple.

Building an economy based on reality.

It's time that we completely wake up as a civilization to reality as it is: EVERYTHING IS CONNECTED.

Carl Sagan said it decades ago, "the new consciousness is developing which sees the Earth as a single organism, and recognizes an organism at war with itself is doomed."

We must evolve from using war to get our needs met. This means every one of us. Starting with the language you use. Become aware of all of the ways that you use military and warfare lexicon in your daily life - do you really want to war if you are here to create peace?

From this recognition we must build an economy of connection, of relationships. An economy of peace, rather than one of war. Simply that.

Enjoy the video.

"The Possibility for Profound Change in America"

We're in the driver's seat for "The Possibility for Profound Change in America" an amazing lecture which recognizes each of us are responsible for systemic change for our civilization. I met Gar a while back and he's extraordinarily thought provoking. Inspiring, and worth the investment of time. Enjoy!


Gar Alperovitz E. F. Schumacher Lecture from New Economics Institute on Vimeo.

Book: "Economyths Ten Ways Economics Gets It Wrong"

The challenge of our time is that our myth is that we have no myths.


Irony is, that we are still a deeply mythological culture and it is high time that our culture recognize the false premises and untenable myths that define our economic paradigm.

This is most recently highlighted by a blog from The Capital Institute which mentions a book on the myths of our economic viewpoint. Here's the blog entry:


"A Capital Institute shout out to Leland Lehrman for sharing with us David Orrell's eloquent cri du coeur found at the conclusion of Economyths, 10 Ways Economics Gets It Wrong. Leland calls the book "a brilliant reconstruction of economics that covers gender, happiness, fairness and other perspectives on economics in intellectually and mathematically rigorous ways without becoming unreadable." "


From the book:

"So, students. Decision time. You live at what many believe is a bifurcation point in human history. You've seen all the graphs with lines curving up like a ski jump. Human population. Gross domestic product. Species extinction. Carbon emissions. Inequality. Resource shortages. You know that something has to give. You've got an idea that the price isn't right. Maybe you're even suspicious that if the world economy does turn out to be a Ponzi scheme, you or your children are a little bit late to the game."

"You therefore stand at a fork in the road. You can take the orthodox route -- and risk ending up with a qualification as impressive as a degree in Marxist ideology right after the fall of the Berlin Wall. Or you can take a chance on regime shift by speaking up, questioning your teachers, being open to disruptive ideas, and generally acting as an agent of change. You can insist that the economy is a complex, dynamic, networked system -- and demand the tools to understand it. You can point out that the economy is unfair, unstable, and unsustainable -- and demand the skills to heal it. You can tell the oracles that they have failed. You can go in and break the machine. And then you can do something new."

I'm heartened by the fact that so many people have economics on the mind, and are independently coming to similar conclusions.

I trust that in coming years our economy will look much different, and work much better for the well being of humanity and all living beings on the planet. 

We are the 100%

An important ethos expressed in this film, words of my friend Charles Eisenstein, author of the recent book "Sacred Economics"

Social Complexity Theory as a framework for new economic models

I have just learned from my brilliant friend Ron Schultz that he's the co-author of another book on complexity in the context of business. It is called "Coherence in the Midst of Complexity"

In my conversation with him, I learned that the ideas outlined in his book would most definitely apply in my field. I gathered that anyone who shares my passion for advancing the new frameworks in the fields of Sustainable and Responsible Investing would benefit from seeing the world through the lens of "coherence in the midst of complexity."

Here's an overview of Social Complexity Theory from the book's website.

"Complexity and emergence (the appearance and impact of the new) can be the bane of managers and their organizations. Both complexity and emergence threaten to upset adherence to predefined categories, which supposedly allows for efficiency. Indeed, traditional management thinking focuses on a retrospective coherence where ideas and events are assigned to categories, the categories are labeled, and outliers are treated as statistical deviants.  

"The study of how such attributed (retrospective) sense-making breaks down in and around organizations is the focus of social complexity theory. Coherence in the Midst of Complexity discusses the social complexity approach, where dialogue and stories allow for the degrees of freedom needed for the opportunities of emergence to take root. The book focuses on the experience of coherence and how such experiential lessons differ from the establishment and maintenance of categories and labels."

"Social Complexity Theory examines the role of coherence and emergence in organizations. Coherence is regarded by many psychologists as critical to day to the day productivity and effectiveness of individuals. Both scholars and managers have adapted this belief to the world of management and organizations. Coherence is regarded as a sign of a well-run organization. But, the concept of a coherent thought defined as how well an idea holds together as a single entity gradually breaks down as the scale shifts to individuals, groups, and ultimately larger organizations. 

"Adapting to and dealing with emergence is perhaps the most important task facing managers and organizations. Coherence as traditionally defined interferes with that task. By restricting the concept of coherence to measurement against definition (what we call ascribed coherence) managers and organizations implicitly are restricting their ability to deal with the unknown, the uncertain and the emergent." 

"Social Complexity Theory provides another perspective on coherence -- rooted in the felt experience of coherence and in the importance of emergence. Richard Rorty tells us: Knowledge is not a matter of getting reality right, but rather a matter of acquiring habits of action for coping with reality. In common parlance such coping mechanisms are called models. The aim of Social Complexity Theory is to teach managers and members of organizations to make use of some very different models as part of their coping mechanisms."