During July, Caux Palace in Switzerland hosted the Invest in Peace Forum. The initiative, a cooperation between the Swedish Sustainable Economy Foundation and Initiatives of Change, Sweden, convened land restorers, peace activists and investors in its first-ever conference to explore how investment can better help build a foundation for peace. The main theme centered around what we need investment for, and how to meet the needs of fiduciary investors.
This article is also available in German
The conference opened with Invest in Peace co-founder Stephen Hinton asking we consider peace as the main project of humanity – something that we collectively want to achieve. Without the basics – food, water, a roof over our heads – we suffer. At the same time, we long for peace. These needs come with being human. But so does our innovativeness, our entrepreneurship, our ability to work together and our ability to feel peace within us.
This is old wisdom: working together, we humans have the capability to take care of the Earth – and the Earth can provide for our needs. And if we do not take care of the Earth, we suffer. Many conflicts arise as land productivity declines, creating a ripple effect where the conflicts spill over into countries far away.
Guest speaker, John D. Liu, ecologist and film-maker, opened with the story of the Loess plateau. This huge area in China was once dry and barren and a typical example of how destruction of land productivity stresses populations, threatens basic security and increases the likelihood of conflicts.
A massive restoration effort of terracing, tree-planting and water management restored it back to a lush, green and productive area. Bringing back the function of the land also brought productive agriculture and jobs to the region.
Typically, government funds restoration, but after that finance is needed to assist agricultural production, value adding and distribution that comes with the return of jobs to the region.
But, where should and could the money come from? Tim MacDonald, with many years’ experience of Wall Street, gave us an overview of the various sources of money to finance enterprise and government initiatives.
Each of these sources has its own built-in logic that determines what they invest in, the risk they are willing to take and the demand for returns in terms of size and how fast they want to see returns.
One of the largest sources of investment capital is the fiduciary area comprising pensions, insurances, government funds etc. As pensions need paying out regularly this kind of investment is looking for a portfolio of investments that produces regular returns. The risk may be low and the returns modest, but they need a steady inflow of money to cover the regular outgoings needed for pensions.
Buying and selling stocks and bonds – the mainstay of Wall Street and other financial centers, Tim maintained, is a poor fit for pension funds as it does not afford this regular long-term return.
Tim argues that an Evergreen approach to investors would be more appropriate. Real estate is a better example. Investment in, for example, land that is leased out, goes on giving as long as it is maintained productive.
Indeed, extractive business practices in general – examples include the practice of mining fossil fuel reserves, or industrial-scale agriculture that degrades soil – are not such good long-term investments any more. Developments in renewable energy projects and organic agriculture that regenerates soil, for example, are showing better returns.
Willem Ferwerda, the founder of land restoration company Commonland, explained how restoring land is a good business case. Restoration brings four returns: financial capital, on social capital, environmental capital and return on inspiration.
One innovation that could boost restoration is Skymining. Founder Carl Pendragon demonstrated technology that turns grasses, used for stabilization of soil, into biocoal. Restoration projects that take time to mature could be profitable earlier by producing and selling this fuel.
With Peace as a starting point for business activity, we saw how removing carbon from the atmosphere, regenerating land, investing in revitalizing communities can bring the conditions for peace. And with peace comes prosperity and a steady income stream for investors.
We will be publishing more reports from the conference during the coming weeks, with more on the above themes as well as the soft launch of a new fund that aims to underpin peace, a report from a fictive case study – Coaltown – exploring how to bring a once-thriving mining town back to prosperity, a session on scaling up investments and an exploration of techniques to remove carbon from the air using the power of nature as well as the initiatives fair with young entrepreneurs and investors.