KISS
Keep It Simple, Stupid!
That is a common piece of wisdom in business communications. But the story of Bank of Nature is not simple. So, we have to find a way to make it interesting, because of its complexity, not in spite of it. One way to do that is maybe to make it about you.
The core story of Bank of Nature is about you. And me. And all of us. Because it is a story about changing Humanity’s relationship with Nature in order to avoid crashing into catastrophic climate change, and also to be able to keep Modern Society ongoing, more generally, while making a few important improvements to the possibilities for living well, and pursuing our own happiness.
The back story of Bank of Nature, however, is mostly about difficult stuff: the social structure of social decision making; Finance as a social structure for social decision making; the social structures for social decision making through Finance as the point of leverage we need to be pushing on to take effective action on climate inaction; the six different social structures for social decision making through Finance; the dysfunctioning of Modern Corporate Finance caused by Asset Management and Asset Ownership; Pensions and Endowments and their fiduciary duties to future generations, and therefor to all of us (including you); and the powers of size, purpose, time and technology that these fiduciary institutions have, but are not currently using prudently.
There is no “you” in any of this, except in the small way that each of us has a right and a responsibility to participate in articulating the adaptively evolving common sense that is the legal standard of fiduciary prudence and loyalty that is the fiduciary duty of Pension and Endowment fiduciaries.
Difficult stuff.
Let’s try making it more fun.
Let’s imagine that alongside the Fiduciary Owners of Money Entrusted to Pensions and Endowments who are the primary financiers providing financing to enterprises as arranged through Bank of Nature, we can also create a sidecar share of participation in financings arranged by Bank of Nature, that follows the lead of fiduciary experts, but gives you, and me and any individual the ability to put our own personal money to work restructuring the economy into a Human-Nature partnership that is interactive, and not extractive, and that is not on a collision course with catastrophic climate change and general societal collapse.
Could we create a single-purpose mutual fund whose only investment would be an interest in Bank of Nature that entitles individuals to invest our own money, alongside the money being invested by Pensions & Endowments, in evergreen equity payback agreements with enterprising visionaries who agree to prioritize their cash flows for:
Popularity in their social contract with popular choice;
Sufficiency of cash flows to their fiduciary financiers;
Fair Trade throughout their supply chains;
Accountability to Society, through community engagement and compliance with law and business ethics;
Accountability to Nature, for what Society takes out through that enterprise;
Fair Pay, Benefits and Working Conditions
Fair Dealing with customer and competitors through their distribution channels; and
Fair Sharing between the enterprise visionaries and their various financiers.
This is how Bank of Nature can make Pensions & Endowments the heroes of climate security, breaking the shackles of Asset Ownership, which has them enslaved to speculation on share price in the extractive economy of maximizing shareholder value, setting them free to negotiate with enterprise directly on restructuring our economy so that we no longer need fossilized carbon for energy, and that we do pay heed to Nature, and Humanity, in the pursuit of a new prosperity of sufficiency within a Human-Nature partnership that is interactive, and not extractive, adaptively evolving through changing times towards a future of more that is better for more, inclusive of Nature, and all of Humanity.
A mutual fund that only owns an interest in Bank of Nature could trade like a bond fund, because all the investments arranged through Bank of Nature will be designed to honor the fiduciary duties of Pensions & Endowments, which is to generate cash flows from investment sufficient to the assumptions made by the actuaries when they designed the plan (or equivalent assumptions in the design of a university or foundation endowment). These assumptions currently range between 7 and 8%, for the most part. So a mutual fund owning an interest in Bank of Nature would deliver an equivalent return (perhaps reduced a little to allow money for fund management) to individuals who own shares in that fund. Fund shares could be bought and sold by individuals much they way bond funds offer liquidity to individuals. That is, the shares in the fund would trade more or less at par, which is to say, the share price would not ever really increase. The investment would be a pure dividend payout strategy.
This would allow individuals to support Bank of Nature, financially, and to share, financially, in the financial success of Bank of Nature, as an instrument of prudent stewardship through investment, and not as an engine of shareholder value maximization.
It would also allow us, as individuals, to make our money matter, by investing in making the future better, and not worse.
There remains the challenge of sharing the story of the parts and subparts that make up Bank of Nature, because we will all need at least a conversational familiarity with a new language of prioritizing enterprise cash flows. This will be very different from the current conventional way of talking about buying and selling stocks, bonds, derivatives and mutual funds that buy and sell stocks, bonds and derivatives.
How to develop that familiarity?
That is the current frontier for our design thinking. Join us in thinking about it!