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Horizons: Family Office & Investor Magazine

Book Review: The Clean Money Revolution

Monday, September 16, 2019

Joel Solomon, Chairman of Renewal Funds, is an impact investor with a 35 year track record and change agent. He has invested in over 100 early growth-stage companies, delivering above-market returns while catalyzing positive social and environmental change.

I highly enjoyed meeting Joel Solomon earlier this year in Toronto and enjoyed reading The Clean Money Revolution. It is part memoir of an inspiring thought leader’s journey from presidential campaigner to pioneering investor, part insider’s truly empowering guide to the businesses remaking the world, and part manifesto for a new vision of profit, power, and purpose.

Joel is also a Founding Member of Social Venture Network (SVN), Business for Social Responsibility, and the Tides Canada Foundation; Board Chair of Hollyhock, and a member of the University of British Columbia Board of Governors.

The Clean Money Revolution

Matthias Knab: Joel, when you set out to write your book, did you have a specific audience in mind?

Joel Solomon: There are four main audiences. People with wealth, their children, their advisors, and young people that are motivated and ambitious-the emerging entrepreneurs who are building the map of the future. Very importantly is the wealth management industry. They face profound change in the meaning and purpose of their industry.

For each of those audiences, a common theme is emerging. With ever more information, awareness of crisis is growing. We face challenges socially, ecologically, and politically. Meanwhile, immense wealth is growing. That wealth can be deployed profitably, when that’s the goal, or philanthropically when we with most of the resources, realize we have more than enough. In the middle of those two concepts, is a vastly underexplored potential. It’s ever more apparent that we need a new perspective of our responsibility to the underlying well being of the whole. We ignore this responsibility at the peril of future generations.

My aim is to stimulate the inquiry of our true responsibility for the long term. We must awaken to a reality of a new era, where we often find ourselves unconsciously damaging the very systems that support us. The future of humanity is now at profound risk.

Matthias Knab: Joel, you come from a successful entrepreneurial family. Your first personal investment in 1983 was in a business which was founded a year earlier called Stonyfield Farm. You describe your investment style a “sprinkle investor”, building a portfolio of small private- equity investments in promising mission-based investments.

In 1994 you were asked by heiress Carol Newell to set up her “activist family office” to build a multi-sector portfolio dedicated to her vision and mission. The office deployed the majority of her wealth across for-profit companies, creative philanthropy, public policy and politics, and leadership development across sectors, focused on your region of British Columbia, Canada.

From that base your team built Canada’s largest “mission venture capital” firm, focusing on organics and environmental tech. You have invested over the years in over 100 early growth-stage companies in North America, delivering above market returns while catalyzing positive social and environmental change.

Let’s go maybe back to the 1990s when you met Carol who in the fall of 1992 received the bulk of her inheritance and then decided to invest that money completely differently and also with a real long term vision?

Joel Solomon: It is surprisingly unusual to run into the insights, perspective and drive that Carol has. She grew up in a family that created financial success. She was also very empathic for the challenges going on in the world. She studied geology and spent a lot of time out in the mountains learning about the state of the earth. She came to the realization that we are overtaxing the life systems that sustain humanity, and concluded that we must focus on the long-term impact on the systems which enable the precious balance of life to thrive.

When Carol inherited a large amount of money, her attitude was, “I didn’t make this money. I’m not truly clear why I now own it. My responsibility is to do the most good in the world, that I can do. I have far more than enough, and I am okay to reduce the amount for myself, and would rather support meaningful causes that I believe in.”

Carol’s insight coincided with my own thinking and perspective, so it was a great match and partnership between us. We had a shared vision and distinct roles that matched our skills and interests.

We took a very long term outlook, growing from our first planning meetings in 1994, shortly after the 500- year “celebration” of Christopher Columbus and his so-called, “Discovery of America”. That “discovery” concept was effectively ignoring and colonizing the flourishing indigenous people of the continent who had lived there for many centuries. This anomaly caused us to think about what had happened in those 500 years of European settlement, genocide, and the importation of slaves from tribes in Africa, to enrich the settlers who forcibly took the land for their own, across North America.

On one hand, humanity was exuberantly successful at building economic activity, but on the other, the growth of industrialized society caused irreparable and profound harm to planet and people.

There must be wiser ways to include long term thinking along with better awareness of externalities that could shift capitalism and money to create a positive long term future.

We contemplated the complex idea of “500 years into the future’’, and how our work with money might begin with such a long term intention. “500 years” was a powerful metaphor to use as an exercise to help us think outside of the norm, particularly on the outcomes we wanted to have. Could people today intentionally affect what happens in 500 years? Or is it simply beyond our control, and we just ride the wave wherever it goes?

We were captivated by the idea of such an intention serving as a guiding “North Star” for us to use as a screen for everything we did. It could add far more dimensions to our financial thinking, and our personal inspirations, when we considered each transaction we committed to in light of how it contributed to a better long-term future we or our children would ever see.

This thinking unleashed our creativity. We wanted our money making, our philanthropy, our human relations, and any influence we could have, as a representation of a vision and way of thinking about financial capital. We chose to look at our life and work from the perspective of our own death beds. What would we do to have fulfilling lives, use money to its full creative potential, and use it as a blessing for the future

Thus arose some obvious questions. How much is enough money to own, for an individual, for a family What is the purpose of an answer that sees no limit to those questions, shouldn’t this be a basic truth? Isn’t it a higher purpose to use our talents and resources for helping create a stable long term civilization that is clean, safe, fair, and about human potential for the spiritual balance of ecology and society, driven by a visionary capitalist economy.

We were determined to experiment with this thinking.

We found these guiding principles worked well for us. We then set out to model and prove that creative capital could adhere to this thinking. If more smart people accepted this point of view, might 500 years into the future be a magnificent testimony to human creativity and ingenuity

Matthias Knab: If you put yourself into the shoes of other asset owners, be they small and be it large, would you give the same advice

Joel Solomon: I think a good starting place is to consider what matters to you in the long term, and highlight that thinking as the central multi- generational question.

As humans, we want to enjoy the pleasures and benefits of life, but we must also care about the future. We ought to make a conscious effort to find out what matters to each of us in the deepest possible way. The anticipation of our metaphorical death bed gives us a powerful tool for evolving our own guiding principles for lives well lived. Imagine all we could accomplish if the highest spiritual achievement were to contribute intentionally to the best possible future human civilization.

Profound economic transitions are underway. Change happens throughout history, but right now change is happening at an ever more accelerated pace. A huge amount of money can be made by investing in the shifting of the economy towards what can be more resilient, less wasteful or damaging, and more regenerative, well beyond our lifetimes. Those funds can continually revolve into ever more contributory excellence.

Each of us, whatever asset level we have, should first consider what our basic needs are, for our family, and then ultimately our communities. What’s the long-term future? What is our part? What will we be remembered for about our life work? What is our legacy and how will it matter in the future?

Each one of us can create unique and meaningful legacies, far beyond financial success. Then, life can be creative, and we can experience more love. Making money can be fun, and the rewards wonderful. It is a powerful tool. Let’s be outstanding creators of positive change. Let’s guide our lives to maximize long term contributions to community, society, and to the future.

Matthias Knab: Why isn’t everyone sharing this philosophy? Is there a kind of invisible wall people seem to run against?

Joel Solomon: We have developed a conventionality that says the most meaningful thing we can do is to double our wealth. And then, double it again. Too often the only ethic around money is simply, “How can I get more?” That ignores morals, spirituality, philosophy, and our sense of the future and what our true sacred responsibilities are.

Our natural enthusiasm for ambition and accomplishing things is wonderful. Emerging generations are highly creative and entrepreneurial. Necessity will bring forth sophisticated design improvements that reward much more than traditional financial rates of return. Signals of hope emerge continually, as so many people are recognizing the urgent need for new and innovative thinking approaches.

When you ask people, everyone wants clean air and safe food, a toxin-free household, and to live in a healthy environment. People don’t want ever more species extinctions, masses of people living in extreme poverty, or an apparent global insanity in high-risk atmospheric carbon numbers exploding.

By 2050, $50 trillion will change hands in North America in the largest generational wealth transfer ever. It will remake the world and be the biggest money-making opportunity in history. And yet, we have a grand opportunity to shift trillions of dollars towards good outcomes for civilization and the natural world we all depend upon. The greatest economic activity in history is to rebalance the entire economy for long- term well-being, as we solve the problems of the future.

Matthias Knab: Joel, with such a long track record investing in impact and green finance, please share with us also what you are focusing on in your investment funds right now.

Joel Solomon: I have invested in the solutions economy for 30+ years, in clean food, healthy households, and environmental technologies that contribute towards slowing the acceleration of climate damage. So many investors now understand the issues at hand and want to engage in solutions.

20 years ago and even 10 years ago, when we launched our first funds for LPs at Renewal, we were viewed as exotic and a bit idealistic. It’s satisfying to do business based on what seems to us as simple truths, be patient as that thinking evolves and spreads, and then be well positioned for success. Innovation can be as simple as common sense. Who doesn’t want a safe, clean, fair future for everyone? Why invest other than with our deepest values and spiritual beliefs? How much money is enough? Then what? Can we sleep at night having little idea what the dollars we own, are doing to people and places? How are we fulfilling our service to future generations?

Excess wealth should only serve our higher purpose. Let’s be billionaires of good deeds!

 
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