Impact Investments

Investing in regenerative systems; a hillbillies perspective.

Nature is cut throat. In nature life and death is an everyday reality. Organisms that go through life naively ignoring this fact, go extinct. Our society strives to hide these realities to our detriment. What is beautiful about nature’s harshness is that you know what to expect. It is comforting to know your place in the world.

The cycles of life and death are always creating change. Through the myriad of phase changes there is a flow of energy. This energy is natural capital. Much of the success of various ecosystems is based on the capacity to grow excess life off of the natural capital. Healthy ecosystems grow. Our exchange of dollars depends on this natural capital. Where we go wrong is when the fake man made capital (dollars and cents) outspends the capacity for our ecosystem to generate excess natural capital. Agricultural and environmental catastrophe is caused by us overdrawing on our principle.

One of the reasons that breaking sod in virgin prairie to grow crops, and logging in old growth forests is so profitable is because of the accumulated natural capital. It is 2023, none of us want to do this. From the investors all the way down the line to the people who work the land, most of us are good people who want to do good. So how can we make impact investments actually work?

This is where impact investment seems like a great option. Take some money and invest it into businesses that are trying to regenerate our planet. Sounds good. The catch is what do you want your return to look like? If you are investing into a system that has overdrawn on its principle and needs a full rebuild how are you going to make any real money back on your dollars spent? Well the truth is you might not. The wealth that we have accumulated was created on the backs of slaves and low wage workers, busting their asses to overdraw the natural capital. It’s going to take some time to rebuild the soils, ecosystems, and livelihoods of humans who steward these places. At this point if we don’t rebuild our principle, we are going out of business.

Do less with less!

As I said earlier; healthy ecosystems have the capacity to grow excess. Simply put, we need to keep our withdrawals in check and not overdraw on the principle. In the case of our crop land, we need to continue to invest in the ecosystem for many years before they will be healthy enough to grow any excess.

The hierarchy of return on investment needs to be flipped upside down for it to be an actual impact investment. This is going to take some time, generations of time. Instead of returns to investors as priority number one, it is the health of the ecosystem as priority number one.

The humans that work the land are part of the biodiversity in these ecosystems. We need to shift our priorities to include restructuring the profits to prioritize the people on the ground. As the system begins to grow excess, the workers that steward the land and make the everyday decisions need to get the initial returns on the investment. Then once the ecosystem is healthy, and the stewards of the land are happy and taken care of, we can talk about where the profits should go. Taking a lesson from nature, this is more of a wealth distribution model than a wealth aggregation model. The rising tide lifts all boats.

Better define regenerative.

Regenerative is greenwashed just like any other buzzword. We need to define our goals for regenerating our ecosystems. If the regeneration of one piece of land comes at the cost of another piece of land; ie limestone and peat moss mining, then it is not regenerative. There are stepping stones and compromises, but we need to acknowledge them and work towards eliminating these compromises with every step of the journey.

Invest in systems that have the capacity to grow excess.

Truly regenerative investments create returns off of natures ability to grow, not on the exploitation of previous growth. We need to target systems that naturally have the capacity to grow excess. Invest in systems that deploy the investment dollars into self replicating, perennial food crops. Grass fed livestock, trees, and shrubs have the capacity to sequester carbon and increase the biodiversity of the ecosystem just by doing what they do best. Trademarked and patented bullshit like Kernza are just a poorly thought out bandaid, and do not account for the ecosystem as a whole. Getting in a car accident in a Volvo station wagon is better than getting in that same accident with a geo metro, but how about you just slow the fuck down? A perennial grain is still an industrial mono-crop, minimal capacity to grow the biodiversity of an ecosystem, and a risky investment.

Invest in systems that create great jobs.

I can’t say it enough, humans are part of the biodiversity we are trying to grow. Ecosystems create culture not the other way around. When we have a healthy ecosystem that integrates the everyday human, we will have robust and uniques cultures that are worth passing on to future generations. I want to hear different stories, eat different foods, and experience different outlooks on life when I visit different regions and ecotypes.

There is no exit strategy.

As a living breathing creature our exit strategy is death. If you are making an impact investment so that you can cash out in a few years, that is not an impact investment. We are rebuilding ecosystems that generations before us have overdrawn. Profits can be made, but they need to work within the confines of the ecosystem’s ability to grow excess, and continue to reinvest on the principle to levels unknown to modern humans.

But what do I know? I’m not an investment banker, just a simple minded hillbilly.