Review Of 'Nature Of Investing' And 'World We Made'

Apr. 19, 2014 6:30 AM ET
Hazel Henderson profile picture
Hazel Henderson
239 Followers

Summary

  • Review of Katherine Collins' newly released "The Nature of Investing".
  • Review of Jonathon Porritt's "The World We Made".
  • Correcting current investing methods to methods based on nature for the benefit of future generations.

THE NATURE OF INVESTING by Katherine Collins, Bibliomotion, Inc., Brookline, MA, 2014

THE WORLD WE MADE by Jonathon Porritt, Phaidon Press, Forum for the Future, UK, 2013

Katherine Collins, author of The Nature of Investing, is also a successful veteran asset manager of a multi-billion dollar mutual fund for Fidelity, and head of their US Equity Research. After 20 years, Katherine Collins decided to widen her investment lens, first by earning an MTS degree at Harvard Divinity School, and then taking a professional course in biomimicry and becoming an investor in the field's premier global company, Biomimicry 3.8. For full disclosure, Collins also serves on Ethical Markets Advisory Board, and I am also an investor in Biomimicry 3.8 which is a privately held, Certified B Corporation, as is Ethical Markets Media (USA and Brazil).

Collins takes the reader through all the intricacies of professional asset management and how it evolved into today's complexities, driven by mathematical models, benchmarks, algorithms, securitization and the proliferation of derivatives which led to the collapse of the housing bubble and the crises of 2008 and beyond. Unlike many of her Wall Street cohorts, Collins became increasingly uneasy about the growing abstractions, empty formulas and focus on short-term returns dictated by the conventional financial models. Collins decided to refurnish her mind, explore the world of values, ethics, assumptions, and finally, to re-explore the real world, not just of Main Street, but the basis of human survival and success on this planet: how life forms evolved successfully over the past 3.8 billion years.

This deeper worldview is the basis for biomimicry, i.e., understanding how nature designs and innovates, codified in Life's Principles, the core curriculum taught in the global education and corporate innovation programs offered by Biomimicry 3.8, whose clients include multinationals Interface (TILE), Procter and Gamble (PG), Holcim (OTCPK:HCMLF), and Brazil-based Natura. Increasingly, companies see the biomimicry model as the path to innovation: re-designing their products and processes for minimizing energy and materials waste, using lessons from many species to improve their products and operations for long-term profitability, while capturing huge savings through radically enhanced efficiency.

While many companies are innovating through mimicking nature's designs, utilizing green chemistry and lighter elements in the Periodic Table, financial firms, pension fund managers and other institutional investors are still using the obsolete formulas derived from economic theories which led to the financial collapse of 2008. Worse, many are doubling down on the old models of risk assessment which failed so spectacularly, and finding more dubious shortcuts to hype performance, high-frequency trading, selling unsuspecting local governments interest rate swaps, manipulating LIBOR, protecting tax havens, lobbying against reforms and the below-1% transaction taxes introduced in many countries.

Collins, using her newly acquired knowledge, shows how to measure companies and portfolios using the yardsticks of biomimicry and Life's Principles to identify good management, and long-term resilience and sustainable prosperity. This approach is now available for licensing as a turnkey, scientific knowledge system, including some of Collins' input, as the Principles of Ethical Biomimicry Finance®, with a growing list of exemplary companies that successfully use such principles. Collins is now a sought-after presenter after her TED talk, and is reaching asset managers beleaguered by demands to purge their portfolios of polluting companies, fossil fuel producers and shift to the cleaner, knowledge-richer companies like those we track in our Green Transition Scoreboard®. This transition is now global and unstoppable, as solar, wind and energy efficiency are scaling rapidly and becoming cost-competitive with 19th and 20th-century fossilized sectors. Collins' new firm, Honeybee Capital, is pioneering these resilient investment strategies through biomimicry. Time for asset managers to learn this new paradigm!

Jonathon Porritt is Britain's foremost futurist, founder of the influential Forum for the Future, and his The World We Made is a look back from 2050 as if asset managers and companies have learned from Katherine Collins' The Nature of Investing and the consulting practices offered by Janine Benyus, author of Biomimicry and founder of Biomimicry 3.8. The World We Made is deeply engrossing, with hundreds of illustrations and visuals of the designs, technologies and scientific principles that undergird the global transition from the early fossil-fueled Industrial Era to the green economies now embraced by 191 countries at Rio +20 in 2012, the OECD and many pioneer asset management firms, including Domini, Calvert, Parnassus and many others, using all the new metrics from GRI, SASB, IIRC, which I cover in "Mapping the Global Transition to the Solar Age."

Porritt has been a pioneer educator, campaigner and leader in reform of London's capital markets for decades. He outlines in this book his prescriptions for "Taming Our Capital Markets" (p. 220), critiquing the obsolete model of austerity based on theory-induced blindness of economic advisors, central bankers and politicians. Porritt advocates a financial transaction tax (FTT), now gaining hold in the EU, envisions a global FTT to curb tax havens and sees an International Court for the Environment, analogous to today's International Criminal Court (ICC). Porritt's vision is of the successful evolution of human societies as they shift their resourcing from digging in the earth to using the free photons from the Sun and redesigning all our products, processes, buildings, cities and agriculture to conform with our growing knowledge of how our planet actually functions. This book belongs alongside Collins' The Nature of Investing as an inspiring and vivid picture of what our world will be like if we apply the lessons and the technologies already at hand: successful, prosperous, more equitable societies for our children and our human future.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article was written by

Hazel Henderson profile picture
239 Followers
Hazel Henderson D.Sc.Hon., FRSA, is the founder of Ethical Markets Media, Certified B Corporation and producer of its TV series. She is a world-renowned futurist, evolutionary economist, a worldwide syndicated columnist, consultant on sustainable development, and author of The Axiom and Nautilus award-winning book Ethical Markets: Growing the Green Economy (2006) and eight other books. Her editorials appear in Wall Street International Magazine and many other media partners, including Other News, and her book reviews appear on SeekingAlpha.com. Her articles have appeared in over 250 journals, including (in the USA) Harvard Business Review, New York Times, Christian Science Monitor; and Challenge, Mainichi (Japan), El Diario (Venezuela), World Economic Herald (China), LeMonde Diplomatique (France) and Australian Financial Review. Since becoming a full-time media executive in 2004, Hazel has stepped down from many of her board memberships, including Calvert Social Investment Fund (1982-2005), the Social Investment Forum and the Social Venture Network. She has been Regent's Lecturer at the University of California-Santa Barbara, Horace Albright Chair in Conservation at the University of California-Berkeley, and advised the U.S. Office of Technology Assessment, the National Academy of Engineering, and the National Science Foundation from 1974 to 1980. She remains on the International Council of the Instituto Ethos de Empresas e Responsabilidade Social, Sao Paulo, Brasil; serves on the Program Council of FORUM 2000, Prague, Czechoslovakia, founded by the late President Vaclav Havel; is a World Business Academy Fellow; an active member of the National Press Club (Washington DC), and a member of the Association for Evolutionary Economics. She is an Honorary Member of the Club of Rome. She shared the 1996 Global Citizen Award with Nobelist A. Perez Esquivel of Argentina. In 2007, she was elected a Fellow to Britain’s Royal Society of Arts, founded in 1754. She leads the Transforming Finance initiative, created the Green Transition Scoreboard®, co-developed with Calvert the GDP alternative renamed the Ethical Markets Quality of Life Indicators, co-organized the Beyond GDP conference for the European Commission, and funded three Beyond GDP surveys, finding strong support worldwide for ESG metrics in national accounting. In 2010, 2012, 2013, and 2014, she was honored as a "Top 100 Thought Leader in Trustworthy Business Behavior" by Trust Across America. In 2012, she was honored with the Reuters Award for Outstanding Contribution to Development of ESG & Investing at TBLI Europe. In 2013, she was inducted into the International Society of Sustainability Professionals Hall of Fame.  Her 2014 monograph, Mapping the Global Transition to the Solar Age, published by ICAEW and Tomorrow’s Company, UK, is available for free download from www.ethicalmarkets.com.

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