1. Business Beyond Tomorrow Montreal Sustainability Weekend Sustainability and Finance: Are We Radical Enough? March 11, 2011

2. Agenda 1.Our UNSUSTAINABLE economic system 1.How we got here 1.Finance: Critical acupuncture point 2.Sustainable Finance: Are we Radical Enough?

3. 1. exponential growth is UNSUSTAINABLE

4. 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

5. FACT If everyone were to live like Americans we would need 5 Earths http://passmethemalkplease.files.wordpress.com/2008/04/gursky.jpg

6. Symptoms of an unsustainable system…

7. Symptom: Population Crisis http://cdn5.mattters.com/photos/photos/1370157/crowded_train_stations_in_china_10.jpg&imgrefurl World 6,826,859,514 http://2.bp.blogspot.com/_JSpbgoKp8LA/SjF4960b8qI/AAAAAAAAFVg/B4 CaOwK2yTk/S1600-R/worldpop_2009_lowerfertility.gif

8. Weather-related disasters affecting 1 million up 4X over 4 decades Economic losses up 10X (The Millennium Ecosystem Assessment) Symptom: Climate Change Risk http://www.katrina.noaa.gov/helicopter/images/katrina-new-orleans-flooding3-2005.jpg Hurricane Katrina, 2005

9. Energy Crisis http://cdn.content.compendiumblog.com/uploads/user/206a9a2b-627f-446d-b836-03b603106274/08ef70d7-7014- 48c5-b9a5-7d322cf1fccc/Image/caa79888d3200de8c9ed8dbfb0bfd8c4.jpg “Nothing has changed….oil and natural gas are essential to our way of life.” - Jack Gerard, American Petroleum Institute “Nothing has changed….oil and natural gas are essential to our way of life.” - Jack Gerard, American Petroleum Institute

10. http://www.naturalbuy.com/wp-content/uploads/2008/08/water-crisis.jpg Symptom: Water Crisis Lake Meade, primary water source for Las Vegas, projected dry in 10 years (Las Vegas Sun) (Las Vegas Sun)

11. The Silent Global Crisis: Soil loss: 24 B tons per year* (1992) C02 emissions: 28 B tons (2009) In past 40 years, 30% of farmland has become unproductive Symptom: Desertification http://www.globalenvision.org/files/343342966_d32322dd2a_b.jpg

12. Symptom: Increasing Wealth Inequality http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/ 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 Spain v Denmark Norway Finland Sweden Netherlands Switzerland Belgium Germany Austria France Canada Italy Australia Ireland Greece New Zealand UK Portugal Japan USA Better Low Wealth Gap Wellbeing Worse High Wilkinson & Pickett, The Spirit Level (2009) Wealth Gap vs. Wellbeing

13. http://macleans.files.wordpress.com/2009/04/houses2.j pg?w=660 Symptom: Financial Crisis

14. 2. How we got here: The efficiency of capitalism

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

16. What does “Sustainability” mean?

17. UN Brundtland Commission - 1987 “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

18. The Natural Step “A state in which society does not systematically undermine natural or social systems within the biosphere.” - 4 Systems Conditions must be met

19. Harvard Business Review* “An activity is sustainable when all costs are internalized.” “Holding on to an economics-based definition of sustainability helps reconcile broader social interests with the measurement of shareholder value.” * “We Need a Definition of Sustainability”, Chris Meyer - 2008

20. A system is sustainable when it does not generate the symptoms of unsustainability. The most important chart in the world…

21. Sustainability Optimum Efficiency 100% 0% Resilience Source: Lietaer, Ulanowicz, Goerner 2008 Natural Systems Definition: Balance of Efficiency and Resiliency Collapse of Financial System

22. “What did you do, once you knew?”

23. 3. Finance: critical acupuncture point

24. Finance is the fuel source, what we feed GROWS

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

26. Driving Capital Upstream Individuals/Institutions (Impact investment) Corporations – TBL, B-Corps, Government policies (carrots and sticks) Public Finance?

27. 4. Sustainable Finance: Are we Radical Enough?

28. What is Sustainable Finance? Currently no Wiki entry for “sustainable finance” Baseline - Top score in 2006 Sustainable Finance Report* was ABN Amro and HSBC: D+ *WWF and Banktrack

29. Expressions of Sustainable Finance Responsible Investing Community Development Finance Environmental, Social, Governance (ESG) Impact Investment Environmental Finance Sustainable/Ethical Banking

30. Sustainable Finance: A Definition (radical) Finance is sustainable only when in aggregate it fuels the transition to, and serves the needs of, an economy that creates more equitable well-being while respecting the finite geophysical boundaries of the planet.

31. Even More Radical… Unsustainable finance is unethical.

32. Sustainability Optimum Efficiency 100% 0% Resilience Source: Lietaer, Ulanowicz, Goerner 2008 Radical Sustainable Finance – Step 1 Sustainable Financial System Sustainable Monetary System

33. Complementary Currencies: proven models WIR Bank Founded in 1934, Switzerland Response to stock market crash in 1929 The word for “we” in German > economic circle is also a community Has grown from 16 to 62,000 members Swiss Franc 1.6 Billion annual turnover

34. Radical Sustainable Finance – Step 2 Differentiate and constrain capital flows to shift economy Invest “upstream” in social and ecological Resiliency Requires new goals, tools, metrics, markets Private Direct (“Impact investment”) Corporate Real Investment Government Real Investment

35. Canadian Tar Sands: “The most destructive project on earth”

36. Models of resiliency exist Basque Country, Spain Founded in 1956 Philosophy: Co-operation | Participation | Social Responsibility | Innovation. Divided into four areas: Finance, Industry, Distribution and Knowledge 85,000 people, 256 companies, 15 Billion Euro turnover

37. Resiliency can be replicated “Import replacement” activity (Jane Jacobs) Employee-owned, for-profit companies: greenhouse produce, laundry service, solar energy Based locally, hire locally: permanent green jobs Workers earn a living wage, build equity as owners Circulate money within community - 5:1 multiplier Cleveland, OH

38. Grasslands, LLC: Holistic Management Restore ecological function, revitalize rural communities. Profitably.

39. Radical Sustainable Finance – Step 2 An assessment of Wall Street Commercial Lending Securities Underwriting Trading Mergers and Acquisitions Retail Banking Services Investment Management Hedge Funds Venture Capital/Private Equity

40. Imagine: Harnessing Capital A world in which finance serves a just, resilient and sustainable economic system…

41. Sustainability and Finance: Are We Radical Enough?