Investing Our Way to a World of Mutual Flourishing.
Current 5 - Insights:
As Charlie Munger famously said, ‘Show me the incentive and I will show you the outcome.’
The closer we get to creating a world that works for 8 billion people and the planet, the more we run into the deeply rooted structural issues holding us back - and we won’t move past them without an infusion of imagination. These structural issues are all too often reinforced by incentive structures that discourage change for those in power, who typically benefit most from ‘the way things are’.
Last year, we invited The Telos Group to host a workshop on peacemaking at the Align Impact Annual Retreat. Sounds a bit odd for a financial services company, no?
It ended up being one of the most inspiring sessions I attended last year. The Telos team provided an expansive perspective on ‘mutual flourishing’ - the concept that we cannot flourish at the expense of our neighbors (with an inclusive definition of neighbor). We are all too interconnected.
For example, I may live in a $15m condo in San Francisco, but when I walk outside, I’ll be faced with people in extreme poverty. I may have access to clean energy to power my home, but continuously rising temperatures around the world will drive climate refugees to seek safe, secure places to live… maybe in my country or my city. I may celebrate finding a great deal when I purchase a $9.99 white t-shirt, but it’s likely that a woman in Bangladesh produced it in unsafe working conditions for a wage that won’t feed her family.
What if instead of succumbing to shame and overwhelm, we see this as an invitation? What kind of future could we design if we made financial and purchasing decisions with ‘mutual flourishing’ in mind?
What could it mean to hold this tension in our lives, to become unwilling to ‘flourish’, or profit, from decisions that extract from our neighbors? What would it mean to reject the idea of investing in companies depriving workers of a living wage or destroying the planet? And, even further, how might our imaginations inform the investments we do make to create a world that allows others to flourish?
That’s ultimately what we’re doing at Align Impact. We help our investors leverage their resources across asset classes to build a future that is more inclusive, more sustainable, and better for all people and the planet - not just those in the position to benefit from growing their wealth. We are challenging the historic zero-sum game of wealth building that many of us have often unknowingly opted into.
There’s a scene in the Kristen Bell show “The Good Place” that often comes to mind when I think about how hard pursuing ‘mutual flourishing’ can be in practice. In the imaginary “Good Place”, the main characters are shown how decisions they made contributed to ‘good’ or ‘bad’ scores while on Earth. Chidi, a highly analytical Professor of Moral Philosophy, is surprised when he gets dinged for eating an organic apple. Then the show explores why, taking a walk through history, revealing the unfair wages of the apple pickers, the amount of water it took to grow the apple in drought-ridden California, and so on. A seemingly good decision can actually have complicated ripple effects.
It’s a quick scene but it’s always struck me as a powerful reminder of how it can feel when we start considering the role our purchasing and financial power can play in creating a better world. Totally overwhelming. Wouldn’t it be easier if the frameworks and data were already fully baked? Couldn’t we make better choices if laws required corporations and companies to be transparent about the non-financial impacts they have on the world and our neighbors?
The process is messy and imperfect, from the politicization (and criminalization?) of considering factors like good governance and environmental impact in investment decisions, to the continued evolution of tools for measurement and transparency, to lack of awareness among most financial advisors, and an impact investment universe that is impressive, but still growing. This messy middle requires our imagination and our grace to redesign a financial system that creates mutual flourishing.
Because here’s the thing: financial systems have too much power to systemically address global inequities to avoid engaging because it’s messy.
I’m hopeful that this moment is just one stop on the ‘moral arc bending toward justice’ (MLK Jr) and proud that Align and our clients are in it for the long haul.
