A Field Guide to Resilient Investing - The Resilient Investor (2015)

The Resilient Investor (2015)


A Field Guide to Resilient Investing

A Tour of the Nine Zones of the Resilient Investing Map

NOW THAT YOU ARE ORIENTED TO THE ROWS AND COLUMNS OF THE RIM, you are probably eager to see the colorful variety of investments that are blossoming all across this expanded territory. What do you find in the place where tangible assets chart an evolutionary course, or financial assets come close to home? This section is designed as a field guide, one that will help you recognize some of the species that you will encounter in each of the nine investment zones.

Here is where you’ll experience just how rich and vibrant resilient investing can be; the write-ups are packed with detail, providing a solid introduction to the diversity of options available in each zone. As with any field guide, this detail is fascinating but perhaps best taken in small doses; digging in to a couple of these zones in a sitting may give you more than enough to chew on. If so, we suggest that you return to this section periodically. Of course, the book’s website fills out every zone in ways we can’t fit into a book.

A couple of quick points of context are in order before you dive in. First, the specific options mentioned in each investment zone are just a few of many similar or related opportunities, intended to give the flavor of what can be done there; they should not be seen as specific recommendations. You will want to get to know more of them, and dig deeper, so that you can make an informed choice for yourself about which ones to bring into your resilient investing portfolio. Second, because everything is connected, many of these investments cross over into zones other than the one we put them in. That is to be expected; life is holistic—and messy. In the real world, not everything fits into tidy compartments.

Now, let’s start our tour.


Personal Assets/Close to Home

images This first zone is the most intimate realm of investment. It is where we focus on our self, and those closest to us, all within the place we call home. These include investments in your own personal skills and well-being as well as actions that deepen your relationships with family, neighbors, and all those who form your networks of support (even if they don’t physically live close to you, they are close to the heart!). Home also includes the natural world around us; getting to know the place where you live is one investment you won’t want to miss. These investments help build resilience for you, your family, and your community.

Even more than in the rest of the personal assets row, this zone mostly involves investments of your time rather than money. But remember: time is everyone’s most precious resource, so you will want to allocate it wisely. Hobbies, healthy habits, and supplemental skills pay off financially by reducing expenses while also being fun and fulfilling in their own right. These too are investments, providing immediate rewards and paying healthy dividends in the future. This zone is about making conscious choices about how we apply the resource of time and energy to enhancing our personal assets.

These are a few of our favorite things.

Improve Your Health

Invest in yourself in the most intimate way: your own physical and psychological health. As Ralph Waldo Emerson wrote, “The first wealth is health,”1 and as any sick person will tell you, without your health little else matters. There are so many resources available it’s hard to know where to start, and we are investment advisors, not health advisors, so consult your primary care provider and consider diet, exercise, and preventive care as cornerstones of this investment. The time and money you devote now are likely to garner solid returns in the form of increased vitality and reduced healthcare costs later.

Change Your Habits

Habit change is not easy—anyone on a diet can tell you that—but it is often where the biggest returns can be. The best of these investments don’t take any money at all and often very little time; all that is required is attention. What does it cost to turn off lights when you leave a room? That’s right, it doesn’t cost anything! But it results in lower energy bills. Or consider annual gas savings if you go to the grocery store half as often or ride your bike instead of drive. Making minor adjustments to acts of daily living can deliver a high return on investment.

Do It Yourself, Together!

“Do it yourself” (DIY) is integral to the American spirit—the willingness to roll up our sleeves, learn a new skill, and make, not buy, solutions. Learn some basic building or plumbing skills; make sauerkraut or yogurt! We like to add “together” to the individualistic spirit of DIY: join with your family, friends, and neighbors to accomplish something much bigger than anyone can do alone. Join a sewing circle, plant a community garden; have fun, improve your health, and strengthen your social bonds. If you have been paying $8.50 for a small jar of crushed cabbage and salt, you know that these skills can save you money.

Build Community

Small investments of time in community building can garner significant and immediate personal returns (conviviality, inspiration) and possible longer-term benefits (safety and support). Transition Towns and Community Emergency Response Teams (CERTs) are two programs that can help dramatically improve community resilience. Volunteering at local nonprofits and participating in faith communities builds both relationships and community resilience. Knowing concerned and skilled neighbors, working together to address weaknesses in the community, and creating a response plan—Where do we meet up? Can we help one another install emergency water storage?—all help build long-term safety and increase peace of mind.

Close-to-home investments are so pleasing because they easily satisfy other needs: they are fun and they connect you with your community, often across generations. Learning how to knit socks from Nana is a great way to invest a Friday night. These nonfinancial investments in health, heart, and hearth are deceptively powerful, offering returns that are valuable beyond measure. The sense of purpose, satisfaction, connection with land, self, and others—these are all factors that many would cite as what makes life worth living.


Personal Assets/Global Economy

images This zone is where you engage with the big wide world, striving to choose actions that can help tip the scales of the global economy toward sustainable outcomes. Investments in this realm largely involve career and lifestyle choices along with opportunities to use your time and energy to influence the shape of society and the economy.

A Meaningful Career

A key place to start is with your career. Does it provide meaning as well as a good living? Would a career change, or simply a change in employer or specific job, offer better alignment between your overall worldview and how you spend the largest part of your days? Making a change is not easy—it can involve a new course of education or relocating, among other challenges—but the emotional and financial rewards might be enormous. Taking the time to design a life in which your work is deeply meaningful2 pays enormous dividends in personal satisfaction and social betterment and ensures that when you come home from work, you are enthused rather than depleted, with energy to devote to other priorities such as volunteering, family, and exercise.

The Evolving Workplace

Perhaps you already love your job. What can you do within your workplace to change it for the better, both for employees and in terms of the company’s relationships with the greater world? The following examples are among the positive changes that you might participate in or help catalyze.

images Start a wellness club, encouraging exercise and perhaps a shared mindfulness or meditation practice.

images Advocate for recycling and the procurement of local, recycled, and biodegradable products—and work to make your company’s products more socially and environmentally responsible.

images Engage with your co-workers in community service—on company time!

images Share company expertise with young people and the less fortunate via internships and educational outreach.

images Organize your business as a B Corp3 or obtain other sustainable business certification such as from Green America or from an industry-specific association.

These types of initiatives can make work more enjoyable and foster pride in your company, which research has shown to have a positive correlation to both quality and profitability.4

Lifestyle Choices

Beyond the workplace, there are many other lifestyle choices that shape your participation in the global economy. For starters, the choice of where you live has countless ripple effects: urban dwellers who rely on public transit have among the lowest carbon and other resource footprints, while living and working (including telecommuting) in a rural town offers substantial benefits in both connection with nature and opportunities to participate directly in local governance. Orienting your home and work life to accommodate bikeability turns transportation from a large financial and environmental cost to a significant personal health benefit.

Advocacy: Changing Corporate Citizenship

There are many opportunities for citizens and shareholders to participate in the change that is under way to forge a more responsible approach to corporate citizenship. Now that we have at our fingertips the ability to network with like-minded people and groups throughout the world, you can be part of this change by devoting some of your time to citizen advocacy, whether locally, nationally, or globally.

Shareholders hold particular power to influence corporate policy via proxy voting and working with others to submit resolutions; this has led to Home Depot’s no longer selling old-growth timber, FedEx Office’s using only recycled copy paper, and McDonald’s abandoning polystyrene foam cups.5 Individuals and companies can join with groups like the American Sustainable Business Council to participate in public policy, engaging with regulatory agencies and Congress to help establish higher standards and expectations for corporate behavior.


Personal Assets/Evolutionary

images The quest to improve the human condition requires clarity of purpose. Are there ways that we can strengthen our personal assets base to become a valued crewmember on the journey? How can we help humanity not only solve our current challenges but also boldly go where no one has gone before?

This zone asks you to focus on improving your ability to notice, engage with, and help create the leading edge of innovation that is bubbling up all over the planet. That’s a big task, so to get started we steer you to two main entry points, both of which will open up a lot of new ground to explore: looking inside ourselves, and tuning in to the accelerating advance of knowledge and innovation.

Start from the Inside: Self-Inquiry and Personal Development

Many with an evolutionary bent focus on changing the economic and social systems that dominate today’s world, but the system we are all closest to is our own self. As Gandhi famously said, we must “be the change we wish to see in the world.” The inner growth spurred in this zone will pay dividends in the clarity and integration of the decisions you make across the RIM, especially (but not only) in the richness of your personal and professional life.

But where to start? Here’s an idea: take a walk and ask yourself some probing questions. One we like comes from William McDonough, which he uses to help corporate leaders focus on the central questions of our times: “How can we love all of the children, of all species, for all time?”6

Both within and outside established traditions, many are exploring what an “evolutionary spirituality” might look like. As one example, in Integral Life Practice Ken Wilber and colleagues describe a fourfold practice that includes body, mind, spirit, and self-reflection. A framework like this can help you identify which areas need the most attention while ensuring that you are touching all the bases. Perhaps this seems out of place in a book about investing, but what we are suggesting is that it’s possible to deepen your capacities for clarity and balance and that putting some of your time and even money into these pursuits is both wise and prudent.

Finally, don’t forget that we need each other. Doing this kind of inner work can bring up all sorts of questions and challenges, so it is best to have a strong support network, which may include professional counselors or trusted spiritual advisors. The work you do in this zone goes deeper and works faster when shared with others.

Jump into the Future: Learning and Connecting

One hallmark of evolutionary investors is their commitment to lifelong learning. Of course each of us will have our particular primary and secondary interests; the future will also need many of us to be generalists, making the new connections necessary to move society forward. We live in an era that can overwhelm us with information, so finding reliable filters—whether they are websites, podcasts, authors and journalists, or conferences and classes—will enable you to focus on what is most relevant to you.

Technology is a central player in nearly any scenario, and its pace of change requires ongoing focus to avoid becoming a dinosaur. Innovations like 3D printing and bioengineering are rapidly changing our ideas about what is possible. Even if you are not an early adopter, try to stay aware of new tech and systems that are moving from concept to reality.

Turning to the social opportunities offered in this zone, you will want to find your place in the new forms of online global community that continue to blossom. Your ability to learn from leading thinkers and actors in almost every field—and to share your own leading-edge ideas—has never been greater.

And finally, the nature of work itself is being transformed by the quick pace of innovations; robots and outsourcing are taking a toll on jobs that were once thought to be immune from those pressures. At the same time, the opportunities available to entrepreneurs are limitless. From putting your offerings into the budding sharing economy, to collaborating in open-source global networks, you may find your future profoundly shaped by evolving your own participation in the world.


Tangible Assets/Close to Home

images Here is where we are quite literally bringing it all home. Home is where the heart is, and it’s also one of the best areas for making profitable investments. Leveraging your own experience, energy, and sweat equity, along with money you have saved or borrowed, can pay big returns. Investment could be in one’s home, in home improvements such as adding an in-law or rental unit to your house, in energy efficiency and renewable energy generation, or for other ends, such as building the physical elements of household and community resilience. Planting a garden is an easy first step, even for renters.

Converting financial assets into tangible assets is the distinctive feature of this zone. You will find plenty of smaller investments that can pay off via reduced expenses. On the other hand, some investments here are the biggest investments many of us will ever make, such as a home. Much of what you do in this basket offers intangible rewards such as pride of ownership and accomplishment.

The “Realest” Estate: Home and Home Improvements

Homeownership is one of the primary financial goals for many, and for good reason; it serves countless functions beyond providing a roof over your head. Personal real estate is usually the most tangible asset that anyone invests in, while also offering significant tax advantages. But make sure you think carefully about where and how you buy; the physical location and layout of your home plays into many other practical and lifestyle choices you’ll be making in the years to come. Add-on units for rental income or for family can add tremendous financial and social value, as can sharing opportunities such as family compounds or cohousing.7 You could build or buy a “tiny house”8 or a lovely refurbished Airstream travel trailer and use it for similar purposes. If you have sufficient capital, and ideally some construction skills, investment real estate can be a profitable venture. Evaluate your location and your borrowing terms very carefully.

Energy Efficiency and Renewable Energy Generation

Some of the best returns on investment are available through judicious application of energy efficiency strategies. We all know that adding foam-and-tape weather stripping around doors and windows costs little in cash and just a bit of time but can save hundreds of dollars a year in energy costs while improving comfort. Solar thermal or photovoltaic panels often provide an excellent return on investment as well as protection from rising electricity rates. Think big: whole-systems design can provide dramatic returns on investment by “tunneling through the cost barrier.”9 This involves designs that can end up reducing initial capital costs, such as using enough insulation and air sealing so that a smaller furnace suffices to heat a home.10

Shop and Share Locally

Purchasing locally grown and processed foods and goods tends to be more expensive than similar products bought at a big box store, but that differential can be seen as an investment in the resilience and well-being of one’s local community. Look for a CSA farm near you, where fresh, local food can be purchased, often at a cost savings.11 And tap into the sharing economy:12 you can save money and accomplish more by borrowing from your neighbors—and even make some cash by letting others rent your car or a room in your house.

Community Commons

Putting time and energy, as well as some money, into the shared infrastructure of your community can pay long-term social and tangible returns. Supporting a local land trust, tending a community garden, joining work parties at regional parks or trails, or being part of a team reclaiming intersections or creating “pocket parks” in more built-up areas—all are worthwhile investments. Volunteers serving on town committees and as board members for nonprofits and local water, sewer, or electric companies are all providing a key public service while building strong social relationships as well.

Our earliest investments in the tangible aspects of community can be seen as marking the emergence of humankind; in the modern day, our activities here literally give shape to our civilization. There is great satisfaction to be gained from being able to hold, see, or live within a profitable investment.


Tangible Assets/Global Economy

images The center zone on the RIM is indeed the core of our economic lives: shopping! Our activities in this zone offer the opportunity to notice and take responsibility for our consumption of the physical things we need in our lives. While we have become accustomed to having access to consumer goods produced nearly anywhere in the world, how often do we pause to consider the human and environmental impacts created along the way?

The allure and simplicity of participating in the global economy make it all too easy to gloss over the accumulation of unintended consequences that live within that system. Issues such as how and by whom a product was made, or what the environmental consequences might be, are often swept under the rug. Our purchasing decisions offer a chance to rethink some of these consequences and to take some steps toward engaging with the sustainable global economy as much as possible, leading to more informed decisions that not only facilitate our own well-being but also contribute to a just and healthy world.

Tangible Purchases

The choices we make as we purchase both consumable items (food and clothing) and durable products (personal electronics, cars, and appliances) all have ripple effects, including impacts on workers and communities, energy used in making and transporting them to us, and environmental consequences of production and disposal. For motivation to consider these impacts more closely, we recommend The Story of Stuff, a short film that has been viewed online more than 30 million times.

Scaling back your consumption, which conserves resources and can pay enormous personal and social returns, is the focus of the voluntary simplicity movement. There are countless books13 and websites14 featuring strategies for simple living; Joe Dominguez and Vicki Robin’s 1992 classic (revised in 2008), Your Money or Your Life, is an enduring inspiration.

You can also take advantage of a burgeoning new marketplace to fulfill some of your need for many tangible items. As part of the sharing economy, several corporations—notably Zipcar and Uber—are targeting car ownership. Smaller items are also increasingly being shared through online services and community initiatives such as tool libraries.

When you do purchase products, there are many issues that you might want to consider, from human rights to toxic chemicals to management practices. Tough as it is to be aware of the behaviors and policies of every company (did you know Macy’s formally lobbied in Texas against equal pay for women?—in 2013!15), there are resources that can help, at least for well-known corporate brands. Green America’s Responsible Shopper website rates familiar brands on their social, environmental, and management practices, helping identify the best companies in a sector, as well as greener, small-company alternatives; the similar Good Guide developed an associated mobile app16 with a QR-code reader; you can now scan product bar codes and learn instantly about company ethical standards! Many organizations have created conscious-consumer guides17 and issue-specific product certifications18 (see endnote for a list of many of our favorites).

It’s also worth seeking out businesses operating with corporate structures that prioritize social and environmental responsibility. Co-ops come in all shapes and sizes, from local groceries to worker-owned contracting companies and continent-spanning farmer-owned meat and dairy cooperatives. We are particularly passionate about the benefit corporation movement, which includes B Corp certification and a new legal class of corporations in nearly two dozen states that requires businesses to operate for the benefit of people and planet in addition to their owners.

Tangible Investments

A standard hedge against currency devaluation and stock price volatility is precious metals, with gold and silver leading the category; look for legacy and fair-trade sources to minimize social and environmental impacts.19 Art and collectibles may also offer opportunities to hold (and, if you’re fortunate, gain) value outside the currency and financial markets.

Finally, many traditional investments in tangible property can be adapted to fit the sustainable model. Investment property that’s built and managed with social and environmental sensitivity (e.g., urban infill or green-designed commercial property), owning organic farmland managed by others, and eco-tourism projects—all could fit this bill.


Tangible Assets/Evolutionary

images This zone is where we roll up our sleeves and get our hands dirty. By re-envisioning our relationship with nature and how we manage the flow of materials and energy, activities in this area are creating innovative on-the-ground (and in-the-ground) solutions and opportunities. The tangible assets we are talking about are as familiar as life itself: trees, livestock, soil, grass, the oceans, and the atmosphere. But here the goal is to return, to restore, and to regenerate; interdependency, holism, reciprocity, and diversity are actively woven into the design. The outcome, “to recreate the Garden of Eden,”20 is at the heart of the evolutionary impulse. Applying this strategy to tangible assets is a profound investment in the foundation of all wealth.

Returning to our roots, literally, but with new eyes and new abilities, “bioneers”21 are evolving how we can reinvest into natural capital and reinvigorate all human systems. Even our industrial systems can be redesigned “to cherish what remains of the earth and to foster its renewal.”22Let’s look at some of what is being worked on.

Digging into Regenerative Agriculture

The aim of this restorative style of agriculture is to align with the amazing fecundity of nature and build a human system around this abundance that benefits people and planet while also turning a profit. As Slow Money author Woody Tasch describes it, “We can bring money back down to earth.”23 Here are some exciting projects we love:

images Sustainable woodlots and forestry, like the Menominee Tribal Forest,24 where a diversity of species, ages, and functions yields a beautiful and functional forest ecosystem for the long term

images Community-level food forests, such as the work done at the Beacon Food Forest in Seattle that grows fruits, nuts, and other supporting plants right in town

images Aquaponics systems, where plants and fish grow together synergistically, the best of hydroponics and aquaculture; the brilliant Urban Farm in Milwaukee25 is an excellent example

images Planned grazing systems, where domestic animals mimic wild herds and regenerate grasslands as a result; Green Pastures Farm in Missouri is one of many examples26

Are there any examples of regenerative agriculture projects like these in your area? If not, find (or start) a Slow Money chapter27 and work with other interested folks in your community to get something going. Participate in a CSA farm or prepay for larger amounts of produce, meat, or food products, such as on the Credibles model.28

Conservation Finance: Restoring an Ecosystem Near You

Many other innovations are tapping into the regenerative power of nature. Conservation finance focuses on fields such as habitat conservation, sustainable forestry, and clean water. Addressing our greatest planetary challenge, the Virgin Earth Challenge, created by Sir Richard Branson, offers $25 million to any organization that can demonstrate a sustainable and economically viable means of removing greenhouses gases from the atmosphere. Investors looking for inspiration will find Allan Savory’s Holistic Management among the finalists, along with companies developing biochar, an ancient Amazonian technique that stores carbon while increasing soil fertility. The Nature Conservancy and Ecotrust are two organizations that have created opportunities for accredited investors.

Thinking Like the Earth: Evolving the Circular Economy

The many practical visionaries working in this realm aspire to create well-integrated human systems modeled on nature’s wisdom. Permaculture (see chapter 3) offered an early practical foundation, and biomimicry looks to plants and animals for direct design inspiration,29 such as spiraling conch shells leading to far more efficient propellers and fans. As Katherine Collins, author of The Nature of Investing: Resilient Investment Strategies through Biomimicry, says, “Asking, ‘What would nature do?’ can be the first step toward decisions and designs that are optimized instead of maximized, generative instead of extractive, mindful instead of mechanical.”

With this mindset, each step in a process can generate a new yield, a new business opportunity. William McDonough sees red and wriggling vermiculturists (worms to the lay audience) creating soil fertility and adapts this insight into a circular economy approach to the “technical nutrients” of industrial design; as a sign of things to come, you can now return some products to the manufacturer for complete recycling at the end of their useful life.

Decentralized Manufacturing

Extruding (!) onto the scene now, desktop-scale 3D printing revolutionizes the ability to fabricate almost any product, from toys to bikinis to unique widgets.30 As Jeremy Rifkin asks, “What if millions of people could manufacture batches or even single manufactured items in their ownhomes or businesses, cheaper, quicker, and with the same quality control as the most advanced state-of-the-art factories on earth?”31

The “maker movement”32 brings together the DIY spirit with technology. It will be years before we see how truly transformative this tangible technology will be, but this is a great time to jump in.

While much of the activity in this basket is not widely available for direct investment outside venture capital firms and angel networks, that is changing. In the meantime find regional projects to get involved in, consider directing some of your charitable giving here, support companies on the vanguard, and keep your eyes open for chances to get your money dirty while doing some good clean work in the world.


Financial Assets/Close to Home

images In a world where $3 trillion circulates through global currency markets every day, it is easy to forget that, until recently, keeping your money close to home was the most ordinary of choices. Banks were locally owned, and entrepreneurs depended on their own connections if they wanted to finance a business. But local communities, and small businesses in particular, find it difficult to tap into today’s swirling ocean of cash. Complicating the situation, securities rules devised to protect investors from swindlers make it difficult for small companies to sell ownership shares to the public. Undaunted by the challenges, a hardy cohort of community activists has planted local investment seeds that have grown and thrived here in the United States and globally. As a result, there are now many ways to invest in communities, some of which can be done right from a standard brokerage account; you can even make local investments using your individual retirement account (IRA)!

Let’s focus on your home community. What if it were possible to shift a significant portion of your financial assets away from Wall Street and onto Main Street—to invest in helping your neighbors find a place to live, create jobs, and improve the local quality of life? Sure, this soundsgood in theory, but even opening to this possibility brings up a bevy of practical issues: Could you earn a fair return? Can you diversify so that you are not taking too much risk with any single investment? How would you even find such opportunities?

Get Involved

While the best resource is to network locally, we can point you to some tools and directories. Amy Cortese’s Locavesting: The Revolution in Local Investing and How to Profit from It and Michael Shuman’s Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity both do an excellent job of covering the innovations occurring around the United States.

The Local Investing Resource Center is an online hub for collaboration and learning about local investing; and two organizations, Green America and BALLE—the Business Alliance for Local Living Economies—offer community investing guides online.


In many places, you will discover member-owned credit unions and locally owned banks that are happy to provide you with the same services (savings, checking, CDs) that you might now be getting from a distant corporate bank. Do a little digging to make sure that you understand their mission and what sort of impact they are making in your hometown. While some focus on consumer loans, others are deeply involved in affordable housing or locally owned businesses.

Loan Funds

Beyond the familiar confines of banks and credit unions, you may also discover lesser-known options such as community loan funds, which provide financing for underserved populations. Regional funds are at work in most areas of the United States and offer a safe place for some of your savings; rather than being parked in a CD, your money can be paying substantial social dividends.

Investing in Your Neighbors

Getting even more personal is the possibility of investing in specific local businesses. You can make your own deal directly with the owner, or consider joining a group that brings together investors and local entrepreneurs seeking capital. The Slow Money movement is helping support the creation of investment clubs that focus on farms and food. James Frazier, a Natural Investments financial advisor, co-founded the groundbreaking Local Investing Opportunities Network (LION), which is being replicated in many communities. While investment clubs pool their money and vote on which local or regional projects to invest in, LION groups simply bring the parties together and allow each investor to make his or her own deal with selected businesses.

Woody Tasch gets people thinking by asking, “What would the world be like if we invested 50 percent of our assets within 50 miles of where we live?” It is a great question, with nice round numbers, but it’s up to you to decide how much to invest and to define what “close to home” means. Most people will start with modest amounts, increasing as they gain comfort and more opportunities appear. And what’s your range? For those living in a city, 50 miles might be too expansive when there are needs and opportunities down the street. Out in the country, a larger region might be needed to provide the necessary diversity. What matters most is that you take the time to really get to know where you live, see what the needs are, and find opportunities that speak to your desire to connect your money with the place you call home.


Financial Assets/Global Economy

images This zone of the RIM is where we turn our attention to what most people consider “investing”: putting money into a diversified selection of stocks, bonds, mutual funds, and other financial instruments being traded in the global economy. While resilient investing offers us many more baskets to choose from, this zone remains a key place to focus on growing your financial assets.

As you know, we are passionate about engaging the global economy in ways that raise the bar on corporate citizenship. Naturally, much of what we recommend here follows from our 25-plus years in the field of sustainable and responsible investing. We see SRI as a fundamental tool that enables your financial investments to be consistent with all the choices you are making with your time, attention, and money across the entire RIM. In particular, it enables you to align your investment choices with your own values, and by so doing to encourage corporations to change in ways that better serve society and the planet. For most investors these goals are achieved by choosing mutual funds and financial advisors that are as committed as you are to making a positive impact while remaining focused on earning solid financial returns (see Resource 1: The Case for SRI).

Over the past decade, SRI’s pioneering integration of social, environmental, and corporate governance considerations has been embraced by much of the mainstream financial-planning industry33 as well as by institutional investors such as public pensions, religious organizations, labor funds, foundations, and endowments. The United Nations Principles for Responsible Investment, launched in 2006, now has 1,200 signatories representing $34 trillion under management.

Choose Your Criteria

SRI’s values alignment is achieved in part using portfolio screening, which avoids investments in companies engaging in activities that are inconsistent with your values while seeking out stocks and bonds from corporations and government programs that are operated in a socially just and environmentally wise manner. Screening has a fascinating, centuries-long history, much of it with faith-based roots. Its modern expression sprung from the peace and environmental movements of the early 1970s, as investors sought to avoid military contractors and major polluters. Since then such “negative screening” has expanded greatly and may include toxic products, repressive regimes, animal testing, lack of transparency on corporate governance issues, and climate change factors.

SRI is sometimes unfairly pigeonholed as being only about avoiding investments, but it also emphasizes positive screens designed to actively seek out companies that perform well on a variety of issues (e.g., prioritizing employee welfare and diversity and minimizing environmental and host community impacts) or companies active in key sectors of the green economy (including organic food, renewable energy, fitness, green building, or access to water). The particular screens used by each fund vary widely, so you should make sure that the issues most important to you are being addressed by the funds you choose. Our company offers a free “Heart Rating” service that rates more than 120 funds.


The second goal—raising the bar on what we expect from corporate citizenship—is accomplished by engaging in shareholder activism and policy development at the state and national levels. If this is important to you, you will want to choose companies and/or mutual funds that are making positive contributions in these realms.

SRI mutual funds, along with progressive institutional investors, begin by engaging company management in dialogue. This often leads to substantive policy changes, such as the development of sustainability policies and reports (Costco), protection of human rights and safe working conditions (Disney), and product recycling (Apple). When dialogue fails, broader pressure is applied via shareholder resolutions. On the policy front, your investment in these players will support ongoing efforts to improve Securities and Exchange Commission rules and to engage Congress and government agencies on a wide variety of social and environmental issues.

A final thought: The long-term investing we undertake in this zone is often aimed toward fulfilling some future plan or dream—funding our kids’ education or our own retirement, moving to a nicer home, being able to travel a bit. These sorts of goals remind us that we are not investing in the global economy simply for the sake of having more money; we’re looking forward to the promise of the future. Who wants to retire on a polluted, war-torn planet? By directing your investments in this zone using SRI criteria, you are putting your bets on your own dreams and on a better future for all.


Financial Assets/Evolutionary

images We saved the biggest leap for last. Here we are putting our money where our vision is, seeking out game-changing projects and companies. It’s an exciting quest, where you will encounter some of the world’s most innovative thought leaders and hopeful solutions. Evolutionary financial investments are not just about making the best of today’s global economy; they are about changing the game.

Today the innovation that’s closest to what we are describing is coalescing around impact investing. This is the idea of using money not only to achieve a financial return but also to have a beneficial social and environmental impact. At first we were reluctant to utilize this new term, as all investments have impacts (and they are often not positive). But this framework has ignited the passions of a wide range of investors, with interest in such areas as microfinance, renewable energy, low-income housing, and job creation.34 It is thrilling to see how this idea is attracting millions of dollars (and aiming for billions) from large Wall Street firms,35 making it possible for evolutionary ideas to scale up.

Unfortunately, due to a jumble of laws intended to protect smaller investors, today’s range of evolutionary financial investments is rather limited unless you qualify as an accredited investor, which generally means that you have more than $1 million in net worth or earn more than $200,000 per year. But change is afoot, and even today there are several viable avenues on which nonaccredited investors can explore their evolutionary impulses.

images Crowdfunding laws are starting to make room for smaller investors to buy into evolutionary startups.

images The sharing economy is a recent disruptive innovation that is changing patterns of consumption and concepts of ownership while opening up new forms of livelihood.

images Peer-to-peer lending sites such as Prosper and Lending Club are cutting out big banks by enabling people to make loans to one another.

images Shared office and micromanufacturing hubs36 are sprouting up in cities and towns, reducing the barriers for ordinary people to start their own businesses.

Among the most exciting new opportunities in this realm are crowdfunding projects that enable investors to collaboratively own solar photovoltaic energy systems that variously serve large users (hospitals, condos, schools), benefit underserved communities, or are locally owned projects in the investors’ own community. The users lock in a lower fixed utility rate while the investor recoups the capital investment and generates income for up to 20 years. Mosaic led the way, and many other companies37 are now offering investments in solar financing.

A more mature field in this realm is community investing, which aims to serve the needs of those who fall through the cracks of the current financial system. In the discussion of zone 7, we spoke about some ways to invest close to home. But you can also seek out community investments that are close to other people’s homes, all over the world. Community investing is perhaps the best way to participate in evolutionary investments if you do not have a large bankroll.

The Calvert Foundation has made it easy for any investor, with only a $1,000 minimum, to put money into a wide range of projects through its Community Investment Notes. They can be purchased directly, or through most brokerage firms, which means you can hold them in an IRA. They have been rock solid, with a spotless repayment track record. Kiva is a site that lets you invest small amounts and choose a developing-world loan recipient directly. With today’s minuscule interest rates on savings and CDs, you may even find opportunities to earn a slightly higher return while your money does good deeds in the world.

If you do qualify as an accredited investor, you will want to keep abreast of the fast-changing world that is coalescing under the impact investing framework. There are more and more ways for you to find venture investments in cutting-edge companies and funds38 that are seeking solutions to today’s most intractable challenges and pioneering new ways to meet human needs. From distributed energy to vertical farming, 3D printing to ecovillages, you will find many intriguing opportunities.

This whirlwind tour only scratches the surface. New currency innovations like Bitcoin are changing the way we think about money, let alone investing! As with all the assets using the evolutionary strategy, it’s important to stay aware of the latest news and developments.