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Posted on Sustainabilitank.info on September 15th, 2016
by Pincas Jawetz (PJ@SustainabiliTank.com)

 thegreeneconomy.com/content/towar…

Towards a New Economy: Investors forging a road less traveled.

We live in an economic world that most would call capitalism: a word we all use, but definitions vary. Generally starting with “An economic ‘system’ …”. The definitions go on to define aspects of the ownership of capital. What is left out is the question: “What are the goals of a capitalist system?” As the goals of a capitalist economy have changed, so have the investor strategies that fuel markets. Currently, the system has tended toward ‘maximizing shareholder profit’ rather than on creating companies that have long term value for shareholders through:

Transparent and accountable governance,
A stable employee base that makes enough money to purchase the output of the economy,
Policies that strengthen local communities, and a
Means of production that produces goods at the least cost to the environment.
Investors, who do use these metrics as a basis for their decisions, use terms such as ‘mission investing’ ,’ triple bottom line’, ‘ESG’ and ‘impact’ investing. However, such terms can miss the point because they imply that investors are searching for social good, not for metrics that provide returns above market rate. Yet as far back as 2009, Sarah Stranahan, speaking at a Sustainable Investing conference in New York, spoke about the Needmor Foundation, which has used a mission investing strategy.

Sarah Stranahan: “Why are we trying to prove that we [mission investors] are as good as the dominant markets? The dominant markets have failed dismally. Needmor did 4.5% better [than a comparable foundation without a mission strategy]. So what? We still lost 25% of our endowment. We failed in our fiduciary duty and disappointed our grantees and our staff because we had faith in the dominant markets.”

As foundations and funds were reassessing their strategic goals in 2009, Dave Chen in San Francisco was working on a plan to implement. Please continue by going to the link!

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