Investment Portfolio

Steering all FORMS of capital towards regeneration

ESG investment is booming, but it’s just the beginning

What lessons has the financial sector learned from the COVID-19 pandemic? Is it thinking more about systemic risk? Is it extrapolating any hard-won wisdom to its planning for the climate and environmental emergencies?

Whatever the answers may turn out to be, no single sector will be more important in delivering the Regenerative Economy than the financial sector. 

So we were delighted that much of the early interest in our Green Swans agenda came from the money world. In the development bank world alone, for example, we did sessions with BDNES (Brazil’s development bank, transforming into an impact bank), the CDC Group and (three sessions) the World Bank.

And all this at a time when the ESG (environmental, social and governance performance) agenda has been sweeping through the banking and investment sectors. Last year, for the first time, the global value of ESG-screened assets topped $40 trillion, a huge number. 

Meanwhile, COVID-19 has shown that vast amounts of capital can be mobilized if the threat is seen to be sufficiently serious. But the key follow-up question is whether we know how to spend such huge sums efficiently and to best effect?


Spending Trillions

We have been working with a growing number of students to get a sense of how they would invest billions—or even trillions—in the Regenerative Economy. Increasingly, a recommended book for these sessions is Rowan Hooper’s How To Spend A Trillion Dollars: Saving the world and solving the biggest mysteries in science

A trillion dollars is around 1% of global GDP—and in the wake of the pandemic it hardly seems that much money. In the ultimate thought experiment, we ask what young people would do with $1 trillion? 

What balance would they strike between public, private and citizen sector investments? What impact measures would they use? And how would they prioritize between some of the ambitious targets Hooper spotlights:
  • Increase human lifespans? 
  • Create new types of artificial intelligence?
  • Or refreeze the Arctic?

Over time, we plan to aggregate the findings of these investment projects, to create investable Green Swan portfolios. If you would be interested in helping with this side of our work, please get in touch.

Lessons from Spending a Trillion Dollars

Rowan Hooper Senior Editor, New Scientist; author, How To Spend A Trillion Dollars

So how did Rowan Hooper feel after going through the exercise of spending a trillion dollars to save the world and solve the biggest mysteries in science? We asked him—having been forcefully struck by the last three paragraphs of his book.

He noted that the COVID-19 pandemic had motivated governments and business around the world to conjure trillions of dollars from the ether, rendering possible things that had previously seemed impossible.

It’s time, clearly, to work out how to raise unprecedented sums to both improve planet management and boost breakthrough science. But for this to work, we must need to train leaders to invest such huge sums to the best effect.

Here’s how Rowan concludes his book:

‘It’s easy to despair and it’s normal to feel anxious. I’ve done both. What I have found warming, and sustaining, is talking to some the thousands of scientists and economists and activists around the world who are working for a better world. There are millions of people in this team, in this project to change the world. They are devoting their lives to it. The novelist and political activist Arundhati Roy said that the coronavirus pandemic is a portal, a gateway between one world and the next. We are choosing at the moment to step through the portal into a world where ecosystem collapse is a likelihood. We have to choose, now, to make a different world.

‘Global wealth is greater by far than at any point in human history. Philanthropy is growing. Let’s hope it grows more,

and that nation states act together, across borders and with private enterprise. Personally, I’ll never have anything like the sums talked about in this book, but I have something. I am happy for my taxes to be used in the great transition and redistribution. And I am happy to try to ensure that my own spending, and whoever invests my pension, favours goods and services with low-carbon, carbon-neutral, or even carbon-negative footprints. Governments have to change and so do the rest of us.

‘No one is alone in this. The hope that we can genuinely step through the portal into a post-Covid society that is greener and more equitable—the desire to do so—is shared by a majority of people. There is a togetherness here, and there is succour from the knowledge that we are part of the most important collective mission of all time.’

Extracted with permission from How To Spend A Trillion Dollar, Profile Books, London, 2021