Email   Print

A sustainable alternative to the financial meltdown

Although the global financial problems are causing trouble for investors now, they could lead to something better – for investors and the environment.

This fall, the week after the global markets plunged into freefall, Griswold traveled to a convention of like-minded entrepreneurs and investors. For two uncharacteristically sunny San Francisco days, the first Social Capital Markets conference welcomed socially responsible companies, social venture funds, green banks and philanthro-capitalists to tackle the issues that arise at the intersection of business and social goals. The week before, registration had spiked, from 300 participants to 600; by the time Kevin Jones, a founding principal at Good Capital, welcomed the crowd, the hall was filled to capacity.

The crowd included a handful of traditional financial institutions, too, including representatives from Fidelity and Merrill Lynch. "There are a lot of people sniffing around this space right now, and that’s mainly because their clients are asking for it," says Good Capital’s Selke. And the implosion of the traditional markets doesn’t hurt either: Mission-driven businesses offer the potential for a long-term investment that might sidestep the vicious cycles of boom and bust.

Or maybe they’re just looking for an early toehold in what one conference speaker called 'the largest pre-profit segment in the world.' Venture capital funds like Kleiner Perkins Caufield & Byers and Sequoia Capital have recently made massive investments in alternative energies and microfinance, betting that future profits lie in cleaner technology and growth in the developing world. International investment banks like Société Générale and Citigroup have assigned analysts to research 'sustainable investment themes.' They have the kind of money that can move mountains, but, cautions Steven Lydenberg, chief investment officer at Domini Social Investments, traditional models can’t account for social and environmental returns. And when price is the only consideration, he says, investors fall victim to speculation and bubbles, precisely the problem sustainable businesses are trying to avoid.

That’s why those like Bernard Lietaer, an expert on international money systems and currency with the Center for Sustainable Resources at the University of California, Berkeley, say that to fix social problems, we have to offer an alternative to the monetary system as a whole. Today, he says, money has no intrinsic standard of value. Its value fluctuates in the worldwide currency markets, destabilizing global trade and promoting the same kind of speculative bubbles that the stock market creates. Not only that, but the dependence on a singular monetary system makes the whole world vulnerable to currency shocks. "Monocultures are not sustainable," he says. The lack of diversity in the financial system leads to inherent instability.

His solution? Parallel currencies that encourage the exchange of goods and services when the conventional money system fails. For example, Lietaer says, more than 62,000 Swiss companies use the WIR Bank, a complementary currency system that allows companies to do business if bank lending gets tight. "When banks don’t lend money, companies die," Lietaer says. "The WIR is like a spare tire, and the rest of the world is functioning without one."

<< PREVIOUS   1 2 3 4 5 6 NEXT >>
view as a single page