Natural Capital Fund
Ecotrust believes that the wellbeing of people and the planet are inextricably linked. We believe that diverse, healthy ecosystems are the foundations of healthy communities, which together form the bedrock for healthy economies. Nurture people and nature, and business thrives.
For more than twenty years, Ecotrust has been putting our money where our mouth is by growing the Natural Capital Fund. As an investment tool and Ecotrust’s working endowment, the Natural Capital Fund is building a new economy from California to Alaska, one that creates jobs and generates profits while improving the lives of everyday people and the natural environments in which they live.
Instead of investing in traditional Wall Street financial products like derivatives, large-cap public equities and corporate bonds, we back things that deliver better returns. Our long-term forest ecosystem investments protect pristine habitat for nature-based tourism, build healthy watersheds for clean water, reduce carbon emissions and create more stable jobs in rural communities. We have used our growing endowment and expertise to build the nation’s first environmental bank, to lend to fishermen growing local, community-based fisheries, and to pioneer green building infrastructure that improves the livability of our cities.
There are vital lessons here for a growing global community of impact investors.
Ecotrust leveraged our capital assets to create and maintain jobs and generate competitive financial returns while improving the environment, a profoundly different approach than reducing environmental and social degradation while otherwise practicing business as usual. The latter is no longer an option, as our global industrial consumer economy drives climate change, pushes the loss of biodiversity and critical life support systems to permanent and irreversible levels, and increases the disparity between rich and poor.
With the Natural Capital Fund, we have worked to model strategies rooted in community. Investments capturing the natural competitive advantage of a region create jobs, connect businesses to local communities and the environment, and create more diverse opportunities for a region’s residents. This approach has produced some compelling results: We have turned almost $30 million in charitable gifts and program-related investments in Ecotrust’s Natural Capital Fund into more than $800 million in capital assets at work improving the region. That is a leverage of more than 20:1.
Today, more and more people are looking for just this sort of result. Impact investing is not a new idea — it is what we have been doing with the Natural Capital Fund for more than 20 years. But with total capital seeking environmental and social — as well as financial — returns estimated by the Global Impact Investing Network (GIIN) at over $4 billion in the U.S. investment marketplace alone, impact investing is an idea whose time has come. And it is an idea the world desperately needs.
So our question now becomes: How can we better leverage this powerful global movement involving millions of investors and hundreds of funds and financial institutions to scale our collective efforts and move the global economy toward a more reliable prosperity?