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1. The Purpose of Capital Ross Net Impact Conference: Purpose Driven Profits October 13-14, 2011 http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg

2. A collaborative space to explore and effect economic transition to a more just, resilient, and sustainable way of living on this earth through the transformation of finance. THINK – PRACTICE - TEACH

4. Understanding system transformation Capital Institute is about paradigm shifting. consciousness CHANGE system As derived from Dr. Monica Sharma’s work at the UN problems

5. Agenda: “Think Different” • Competing world views • 2. Our UNSUSTAINABLE economic system • 3. How we got here • 4. Finance: Critical acupuncture point • 5. Regenerative Investment: Grasslands, LLC

6. 1. Competing world views After 500 years of progress based on the Cartesian logic of the Enlightenment… this is our Copernican moment

7. Holistic Systems View ReductionistWestern View • - Economy exists apart from nature and - Web of life: one system with multiple • society as monetary phenomenon subsystems (holons); hierarchy • of wholes is critical • - Progress: Perpetual material improvement - Phase transitions, emergence • - “Invisible hand” analogous to natural law - Adheres to laws of thermodynamics • that delivers most efficient outcome which implies absolute limits • among relative scarcities • - “Externalities” are fixable market failures - No such thing as “externalities” • requiring government intervention Society needs to define a “SOS” • - Supremacy of the individual - Interdependence – all is connected • - Machine as model – mechanistic/linear - Nature as model – complexity/emergence

8. 2. Our UNSUSTAINABLE economic system Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist - Kenneth Boulding, Economist, Quaker, Co-Founder of General Systems Theory

9. OVERSHOOT The global economy now uses up 1.5 times the earth’s capacity to regenerate the natural capital upon which the system and life depends. - The Global Footprint Network

10. “Safe Operating Space” -- The world is full “Safe Operating Space” - National Center for Ecological Analysis and Synthesis

11. UNCERTAINTY SPIKE Symptoms of an unsustainable system overwhelm our senses with crisis upon crisis

12. 2b. rising inequality is UNSUSTAINABLE "The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.” - Adam Smith, Theory of Moral Sentiments

13. USA Worse Wealth Gap vs. Wellbeing • Wealth Disparity: • 2% of population Controls > ½ the World’s Wealth • 50% of population controls < 1% of World’s Wealth • Income gaps between rich and poor > 2X in last 50 years Wellbeing • Symptom: Increasing Wealth Inequality Portugal UK Wilkinson & Pickett, The Spirit Level (2009) Greece Ireland New Zealand Better France Austria Australia Low Canada High Wealth Gap Denmark Germany Italy Spain Belgium Switzerland Finland Netherlands Norway Sweden http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/ Japan vv

14. Capitalism and democracy demand trust

15. Inequality lead to the Financial Crisis Paul Krugman: “Inequality and Crisis: Coincidence or Causation?”

16. 3. How we got here Our economy has become an anti-economy, a financial system without a sound economic basis and without economic virtues. - Wendell Berry

17. Desired Outcome What’s wrong with this picture? Economic Efficiency Finance Planet Economy

18. The most important chart in the world…

19. Sustainability in Natural Systems Optimum Sustainability 100% Collapse of Financial System 0% Resilience Efficiency Source: Lietaer, Ulanowicz, Goerner 2008

20. 4. Finance: Critical acupuncture point

21. What are the “First Principles” of sustainable economics? • Bruntland Report, 1987: “Sustainable Development” • Dematerialization through efficiency • - Jevon’s Paradox • Weak vs Strong sustainability

22. “First Principles” of sustainable finance: What’s your impact? • Relative scarcity vs absolute scarcity • Real vs virtual wealth: the exponential function • Finance practice: what is “value”? Regenerative Restorative Sustainable SRI/ESG Green Unsustainable

23. Resiliency: Driving financial capital upstream http://3.bp.blogspot.com/_o0s746IzxZQ/TJwMEtnPvsI/AAAAAAAAAWo/lX-2e-wPZzo/s1600/upstream.jpg

24. Regenerative Investing: Grasslands, LLC A Holistic Management Enterprise in Partnership with Savory Institute • Alan Savory won the Buckminser Fuller Award in 2010 • Ranch management contracts, owned and third party • 55,000 acres under management in S. Dakota and Montana • Expansion in Great Plains, New Zealand, Patagonia

25. The World’s Grasslands are Vast • 12.5 billion acres — (~40% of total landmass) • ~1 Billion people, many poor,make their living as pastoralists

26. Peak Soil? • Soil is second largest carbon sink after the oceans • According to James Hansen, the atmosphere contains 800Gt of carbon, plants 600Gt, and soils contain 1500Gt • We’re losing about 24 B tons of soil per year

27. Nature Provides the Solution

28. Impact Investment: What we feed, GROWS

29. Wyoming – both photos taken same day • Left-side upstream, managed holistically (260% inc in livestock over 10 years) • Right-side is downstream land managed ‘conventionally’

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