Capital Institute's work on financial system reform is very much driven by the concept of system resilience.
Capital Institute’s John Fullerton has been selected as a juror for the 2012 Buckminster Fuller Challenge, an annual international design challenge awarding $100,000. We are grateful for the opportunity to bring attention to legacy of the challenge’s namesake. As one of the first engineers to contemplate the way design interacts with nature and society, he sought to create a world that worked for everyone through thoughtful innovation and deeply-considered policy. Bucky, as he liked to be called, contributed to the thinking of many of the earliest systems thinkers and understood the ideas at the core of system theory: “There are no solids. There are no things. There are only interfering and non-interfering patterns operative in pure principle, and principles are eternal.” And that, in many cases, the outcomes from “whole systems [is unpredictable] by the behavior of their parts taken separately.”
Learn more about the Buckminster Fuller and the work carried on in his name at BFI.org.
As we look to transform our economic and financial systems to support a more just and regenerative economy, we at Capital Institute are aware of how much we have to learn from observing the resiliency of natural systems.
And the more we learn about the Chicago Manufacturing Renaissance Council project as we undertake the research for our upcoming Field Guide to Investing in a Regenerative Economy study, the more we observe parallels between it and what ecologists call an “ecotone.” An ecotone is a transitional zone between contrasting habitats, a forest and a grasslands, for example, where tremendous creative destruction, rich biodiversity, and continuous ecosystem rebalancing known as “the edge effect” occur.
But, as Bill Reed, one of the founders of the rengenerative development movement, explains: “Edges are about more than simply re-balancing—they are about increased potential of relationship and exchange. The possibility of life happens at edges; edges are the bridge and arbiter of relationships—the more edges we have, the richer the potential to improve the resilience of life.” We have come to see the CMRC as just such a vital “bridge,” in this case between the old industrial paradigm and an emerging one where advanced manufacturing will play a central role.
One of the Capital Institute’s eight over-arching goals is a transition to new metrics of social and environmental wellbeing. Much great work has already been done on the private sector component of this issue by groups like the Global Reporting Initiative, the Initiative for Responsible Investment, the International Integrated Reporting Committee, the United Nations Principles for Responsible Investment, Global Initiative for Sustainable Ratings, and many others. These efforts all contribute to the public recognition that our current economic indicators are an insufficient compass for navigating the problems of critical resource scarcity and growing social disparities. But none of these projects has been able to build a coalition and model large enough to solve the problem in total.
A report commissioned by the Global Alliance for Banking on Values and funded by the Rockefeller Foundation, published in March, shows that over the 2007-2010 period, 17 values-based banks outperformed 29 leading mainstream banks by a number of key measures, including loan and deposit growth, capital strength, and return on assets. The values-based banks, which include Triodos, VanCity, New Resource Bank, and OnePacificCoast Bank, were compared with traditional banks, including Bank of America, JP Morgan, Barclays, Citicorp, and Deutsche Bank.(To be a member of the GABV a bank musthave a balance sheet of at minimum $50 million, a strong retail presence, and demonstrate a deep and transparent commitment to environmental and social concerns in every aspect of its banking practices.)
The Center for Labor and Community Research had reason to celebrate last week when we visited with them in Chicago to work on our next Field Guide to Investing in a Regenerative Economy Study. CLCR’s tactical expression, the Chicago Manufacturing Renaissance Campaign and its Austin Polytechnic Academy, had just been singled out for high praise in a study commissioned by World Business Chicago for their exemplary work in furthering advanced manufacturing in the city. What’s more, the study, co-chaired by Mayor Rahm Emmanuel, entitled “Plan for Economic Growth and Jobs” listed “Becoming a leading advanced manufacturing hub” as number one among its “10 Transformative Strategies for Chicago’s Economic Growth.”
Former Executive Director of Ceres Robert Massie has been appointed CEO and President of the New Economics Institute effective March 19. Massie led the launch of the Global Reporting Initiative (GRI) from the helm at Ceres. As President of NEI, Massie will oversee the upcoming Strategies for a New Economy conference where the Capital Institute will host a track on finance. We look forward to continuing our close relationship with NEI as they continue to drive the transition to a new economy with Massie leading the way.
Last week, John Fullerton added his signature to a letter Ben Caldecott of Climate Change Capital drafted to the European Systemic Risk Board. The aim is to collect signatures from academics, politicians, financiers and investors, raising the issue of the exposure of European financial institutions to carbon-intensive sectors and the potentially adverse impact on the financial health of investing institutions, with serious consequences for the function of the financial system possible. A similar letter was recently addressed to Mervyn King, governor of the Bank of England. (See the draft letter here.)
Capital Institute spoke recently with Steve Waygood, Head of Sustainability Research at Aviva Investors, to learn more about the advocacy work the company— with $433 billion in assets under management—has undertaken to advance the cause of more transparent reporting and management of sustainability risk. We also talked with Waygood about how Aviva Investors has embedded sustainability practices into its own operations, his broad concerns about the flawed methodologies that are currently used to value corporate assets and profitability, and the role both policymakers and the private sector need to play in addressing those flaws.
We spoke last week with Ted Howard, co-founder with Gar Alperovitz of the Democracy Collaborative and a key strategist of The Evergreen Cooperatives, the subject of our second Field Guide to Investing in a Regenerative Economy study. Evergreen is a remarkable experiment in anchor-institution-based cooperative enterprise, rooted in sustainable practices and dedicated to true wealth building in inner city Cleveland.