In early April, 650 leaders from around the world met at the UN in New York for a High Level Meeting on Wellbeing and Happiness: Defining a New Economic Paradigm. Yes Magazine provides a good overview of the meeting, which began with stirring statements by the Prime Minister of Bhutan, the President of Costa Rica, and UN Secretary-General Ban Ki-moon, who cited Aristotle and Buddha in calling for the replacement of our current economic system with one based on happiness, well-being, and compassion. “Social, economic, and environmental well-being are indivisible” he said. See many of these opening statements on this conference website.
During the meeting, John Helliwell, Lord Richard Layard, and Jeffrey Sachs introduced the World Happiness Report, a study they prepared for the conference. The report found that money and economic growth have a relatively weak correlation to happiness; happiness is much more strongly associated with things like community engagement, having lots of friends, doing work you love, and feeling a sense of trust in others. Altruism, too, is essential; a world that makes equity, care, and compassion more possible will be a happier world. As the authors write:
The realities of poverty, anxiety, environmental degradation, and unhappiness in the midst of great plenty should not be regarded as mere curiosities. They require our urgent attention, and especially so at this juncture in human history. …if we act wisely, we can protect the Earth while raising quality of life broadly around the world. We can do this by adopting lifestyles and technologies that improve happiness (or life satisfaction) while reducing human damage to the environment.
NI Managing Partner Michael Kramer was recently featured in an interesting interview with Joyce Lee-Ibarra, a consultant to non-profits, which focused on B-Corporations and what B-Corp designation means to Natural Investments.
NI partner Michael Kramer was a featured speaker at TEDx: Hilo in February. In this talk, Michael shares his ideas for transforming capitalism. He describes what’s possible and achievable as we all come to better understand how we spend our money and consider the values of the corporations that we support. Michael also played a key role in moving Hawaii’s B-Corporation designation through the state legislature and shares insights into the changes we can make to improve capitalism for everyone.
Natural Investments’ Michael Kramer and James Frazier were the featured speakers at a recent event co-sponsored by several Maui organizations, on the topic of “Green Business and Investing Locally.” The wide-ranging presentation received detailed coverage in the Maui Weekly, and we encourage you to check out the full article here.
Michael stressed the importance of a new initiative that would allow small businesses to use crowd-sourcing projects such as Kickstarter to accept investments from individuals up to $10,000; currently, there are some daunting regulatory hurdles, designed to protect small investors, that make it difficult for small businesses to raise money locally without going through complex SEC oversight. HR 2930, the “Crowd Funding Bill,” is before congress now with bipartisan support.
James shared his experiences as a part of the Local Investing Opportunities Network, a membership-based network that has created another pathway to legally invest in small local businesses. (see more in thesetwo previous NI Blog posts). Frazier noted that local investing used to be the norm, with new business owners receiving startup funds from friends and neighbors or the local bank. In addition, many cities had their own local stock exchanges, including Honolulu. However, with the growth of Wall Street and the New York Stock Exchange, investing became national; local exchanges could not compete and ultimately closed. LION is a step toward changing that; in Port Townsend, Washington, where the initial LION network emerged, over $2.7 million has been invested in 37 small businesses.
Natural Investments has been recognized as ‘Best for the World’ in a list of U.S. businesses with less than 10 employees creating the most overall positive social and environmental impact. Natural Investments and the other ‘Best for the World’ businesses earned a score in the top 10% of all Certified B Corporations with 10 employees or less, and, on average, 50% higher than the average score of nearly 2,000 other sustainable businesses that have completed the B Impact Assessment.
The B Impact Assessment, governed by the nonprofit B Lab, is the most rigorous, comprehensive, and comparable independent assessment of overall corporate impact in the country, and shows the relative value businesses create for society by comparing nearly 200 individual metrics on corporate impact on workers, consumers, suppliers, community and the environment.
“Natural Investments is a leader in the global movement to redefine success in business,” said Jay Coen Gilbert, co founder of B Lab, the organization that certifies B Corporations. “Natural Investments is among the best in the world at being the best for the world.”
“We are proud to have earned this distinction,” said Natural Investments’ Managing Partner Michael Kramer. “Our clients walk their talk with their investments, so it makes sense for us to operate our company with attention to high social and environmental standards.”
The ‘Best for the World’ list appears in the 2012 B Corp Annual Report published in early March by B Lab. Learn more about how Natural Investments creates positive social and environmental impact at bcorporation.net/naturalinvestments
In this in-depth interview from The Browser, Francis Fukuyama, author of The End of History, discusses five recent books that he feels offer a comprehensive look at the roots of the global financial crisis of 2008 and beyond, as well as the ways we’ve responded since then. At the same time, this dialogue itself offers a solid ten minute overview that’s well worth the time it takes to read.
The five books which serve as jumping off points for the conversation are This Time it’s Different, The Big Short, Fault Lines, 13 Bankers, and the report of the Financial Crisis Inquiry Commission. Some of the many themes explored here include the American proclivity to address income disparity through expanding access to credit, the enduring focus on social responsibility in Japanese business, and the ways that the smaller Asian and South American financial meltdowns of the past twenty years have more in common with the recent American and European experience than is generally recognized.
I recently had the pleasure of meeting Kat Taylor, co-founder of One PacificCoast Bank, a “beneficial bank” newly arrived in Portland. A fan of banks with strong community-service visions, I was interested to hear about their work, but what really caught my attention was that Kat has spent half her time involved in Regenerative Agriculture. Here was a woman after my own heart: combining high impact work in social finance with trailblazing work in building sustainable food systems in her community and beyond.
When we got together, Kat explained that she thinks of things in terms of systems. She believes that our current extractive models of food production, finance, and energy must be replaced with systems that support life. And clearly, she has stepped up as a driver of these changes.
Kat and her husband Tom Steyer originally purchased 2000 acres in Pescadero, California as a conservation project aimed at saving a critical watershed from development. The land, a former dairy farm, was a depleted landscape of coastal scrub and grasslands, interspersed with Douglas Fir. The couple soon realized that this watershed was in the midst of a vital food network connecting rural agricultural land to the suburbs. Drawing on that systems-oriented way of looking at the world,
A recent segment on the CBS evening news highlighted the emergence of the Benefit Corporation, which provides a legal structure for companies that wish to pursue a social mission, rather than being legally constrained to always maximize shareholder value. As you may know, Natural Investments was one of the sixty or so founding members of B-Lab, which certifies B-Corporations, and was an early recipient of the B-Coporation certification.
The two-minute CBS segment is not available for embedding online, but can be viewed here on the CBS News site and here on YouTube (the clip starts with 20 seconds on Muhammed Ali, then moves into the B-Corp segment).
Natural Investments partner Michael Kramer was the recipient of an award announced at this year’s B-Corp Champion’s Retreat. Michael was one of several people bestowed with the “I’m Just a Bill” Award, in recognition of his key role in moving Hawaii’s B-Corporation designation through the state legislature (as covered in this recent NI Blog post.)
While surprised and honored by the award, Michael was especially excited that the kudo was named after a classic Schoohouse Rock segment that he clearly remembers from his childhood. For those of you a tad too old for this cultural reference, these were shorts presented in between the main Saturday morning cartoons, teaching kids various important lessons. In this case, as you might have guessed, the lesson was what it takes to move a bill from idea to law. Check it out yourself (3 fun and educational minutes!) on YouTube.
New York Federal District Court Judge Jed Rakoff triggered lots of headlines with his recent rejection of a settlement between the Securities and Exchange Commission (SEC) and Citigroup, in which the company admitted no wrongdoing and agreed to pay a fine the judge called “pocket change.” Matt Taibbi exulted at “one of the more severe judicial ass-whippings you’ll ever see,” detailing the sorry state of the SEC’s enforcement actions, in particular the repeated agreements by companies to “never do that again,” while all too often ending up back before the SEC on similar violations. Much of the day-after coverage had a similar focus on the wrist-slapping nature of most SEC settlement.
But as the dust settled, many commentators noted that the weak penalties doled out by the SEC may be attributed to its meager operating budget (which necessitates quick settlements over long, expensive trials), as well as to the challenges of proving malfeasance on the part of companies engaged in a business in which everyone recognizes that risks are part of the game. Both of these reflections suggest that if the SEC pushed harder, it may have to trade a few high-profile trials for dozens of small-potatoes settlements.
Judge Rakoff rejected a similarly paltry SEC deal with Bank of America in 2009, but reluctantly approved a revised deal that raised the fine from $33 million to $150 million, though he called the final settlement, “half-baked justice at best.”
The clear solution is to give the SEC the resources it needs to dig deeper and push harder, including following through on legal charges when necessary and appropriate; the SEC’s slim staff and budget leave it relatively toothless in the face of a continuing supply of potential violations needing investigation and prosecution.
"We're not here to put corporations down,” says Sister Nora Nash. “We're here to improve their sense of responsibility.” Photo: Laura Pedrick for The New York Times
A recent New York Times piece, The Nuns Who Won’t Stop Nudging, is a great profile of the Sisters of St. Francis of Philadelphia, who have been visiting corporate offices to push for more socially responsible and sustainable business practices for the past several years. The order of over 500 nuns has a Corporate Social Responsibility Committee, and, with the Interfaith Center on Corporate Responsibility, has engaged in constructive dialogue with Goldman Sachs, Kroger, McDonald’s, and Wells Fargo, among others.
The Sisters’ shareholder activism is just what Jeffrey Sachs says is needed as citizens work to build on the Occupy movement:
The young people in Zuccotti Park and more than 1,000 cities have started America on a path to renewal. The movement, still in its first days, will have to expand in several strategic ways. Activists are needed among shareholders, consumers and students to hold corporations and politicians to account. Shareholders, for example, should pressure companies to get out of politics. Consumers should take their money and purchasing power away from companies that confuse business and political power. The whole range of other actions — shareholder and consumer activism, policy formulation, and running of candidates — will not happen in the park.
Natural Investment’s Michael Kramer was the go-to guy for Scott Cooney of Triple Pundit when Cooney wondered how SRI was weathering the current extended economic storm. Check out Michael’s comments in full on the Triple Pundit website; here’s a teaser:
Kramer said that the current interest in the impact investing was truly inspiring. “Having done this for 20 years, it’s remarkable how exponential the growth in this field is,” he said. Kramer cited that socially responsible investing is a $3 trillion marketplace. “We’re redefining what corporations are, and there are more and more assets flowing into this space,” said Kramer.
This week, the Investor Network on Climate Risk joined similar groups from around the world in releasing a comprehensive call for energy policies at the national and international level that will encourage increased investment in renewable energy solutions. The Global Investors Statement on Climate Change includes proposals and criteria for designing useful and forward-looking regulations and incentives that will support “investment-grade” climate change policy.
The 4-page Statement, signed by 285 investment advisors institutional investors representing more than $20 trillion in assets, and a detailed 44-page report have been sent by the sponsoring investor networks to the G20 and other governments in anticipation of the UN conference on climate change in Durban. The investor networks will use the statement and report as a central resource in their ongoing engagements with national governments.
The Statement says, in part:
Climate change presents major long-term risks to the global economy and to the assets in which we invest. At the same time, well designed and effectively implemented long-term climate change and clean energy policy (“investment-grade policies”) will not only present significant opportunities for investors in areas such as cleaner and renewable energy, energy efficiency and decarbonisation, but will also yield substantial economic benefits including creating new jobs and businesses, stimulating technological innovation, and providing a robust foundation for economic recovery and sustainable long-term economic growth…..With data from the IEA indicating that global energy-related emissions of carbon dioxide (CO2) in 2010 were the highest on record, it is clear that the need for action is urgent. However, current levels of investment in low-carbon technologies fall far short of what is needed. Private investment will only flow at the scale and pace necessary if it is supported by clear, credible and long-term policy frameworks that incentivise investments in low-carbon technologies rather than continuing to favour carbon-intensive energy sources.
Natural Investments, LLC, is pleased to be one of the signatories, on your behalf. For more, see the links above, or investorsonclimatechange.com.
A growing movement to recognize social and environmental benefits as a legitimate purpose of corporate activity, alongside making money, has added two new states to the growing roster of those adding “Benefit Corporation” as a state-recognized legal designation. Both Hawaii and California recently passed Benefit Corporation statutes, joining four other states with such laws on the books; legislation has been introduced in five others as well.
According to B Lab, which both certifies companies as “B Corporations” (a formal process that is not state-recognized) and promotes the adoption of legal “Benefit Corporation” structure and mandates at the state level, state-registered Benefit Corporations “are legally required to pursue the creation of material positive impact on society and the environment, while meeting higher standards of accountability and transparency. Current law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities, and the environment.”
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Natural Investments’ Michael Kramer and James Frazier were the featured speakers at a recent event co-sponsored by several Maui organizations, on the topic of “Green Business and Investing Locally.” The wide-ranging presentation received detailed coverage in the Maui Weekly, and we encourage you to 
