 So we're here for a fireside chat, except that we have no fire, but I'm joined by my wonderful colleagues and great friends, really, Leslie Christian and John Fullerton. I'm going to let them each briefly introduce their current organizations to you all, and if others join us they'll sit in the front row, but among us here we're now in a chat. However, before we start our chat we're going to orient our conversation with a few slides from John. But before you do your slides, John, just a brief introduction of you and Capital Institute and then Leslie, you too. So I'm John Fullerton and I spent 20 years almost at J.P. Morgan left in 2001 and founded the Capital Institute a couple of years ago to really go beyond sort of the current conversation about sustainability and particularly with the idea that the economic system is creating a sustainability crisis and the financial system and our finance practice drives the economy. So, questioning finance was sort of the leverage point to focus on, plus it's something I knew a little bit about. Leslie? And I'm Leslie Christian. I also have a background on Wall Street. I have, I think the distinction of every firm I worked for related to Wall Street is no longer there. The majority of my time was with a firm called Solomon Brothers in New York. And I too have moved from the mainstream financial world to the world of systems thinking with respect to ecological and financial limits. Most recently I was with a company called Portfolio 21 Investments where we created a mutual fund to focus on environmental sustainability. I'm now part time with a firm called North Star Asset Management based in Boston. And I am working on framing the whole investment conversation to include limits. So for those of you who are joining us in the room, we decided we were going to turn this into a fireside chat. We had several of our colleagues who were here join us and you'll stay where you are and participate, although not quite as intimately as our group here on stage. So please stay close. Come up close in your chairs and enjoy this conversation with us. So again, John, if you don't mind, we'll have you queue your slides and then we'll... I was going to not use the slides, but I think there's a few, mostly there are pictures that I think will provide a good framing for the conversation. So the topic is what we're now calling financial overshoot. And so I'm going to start by walking through what we mean by overshoot in general, particularly ecological overshoot, and then try to connect that to this idea that we're also in a situation of financial overshoot, which I believe is the sort of the diagnosis that hasn't yet been understood by many people that are deep in the sustainability conversation. And then Leslie is going to shift more and talk about, so given that framework, how does that force us really to respond as investors? And imagine we could have a similar conversation about how do we respond as policy makers, but we're not going to do that today. And how do we respond if we were CEOs or companies? Because Mitt and President Obama took care of it. Yeah, it's all done. Yeah, it's taken care of. So does that make sense as a frame? Totally. So this is kind of weird doing a slideshow, but you guys can watch here. It's okay. You're all right. Everything will be fine. Thank you so much there. So, you know, this is one of these classic, I promise we will all hear this more and more. This is a classic quote, but I tend to start off these conversations with this simple reality that was said, by the way, at least 40 years ago. This isn't a new idea. Perhaps the more new idea is combining that with one of Albert Einstein's sayings. And I asked for it because apparently he may not have actually said it, but so full disclosure. I think he said it in response as a joke to a question. But it's true. And if you think about those two statements together, it's really where the, I think the rubber meets the road on sustainability and the jets must have interfered. This is now kind of the generalized way of talking about this is that we've entered a new geological epoch. The economist a year ago had a cover story saying welcome to the Anthropocene. And the Anthropocene is the period of time where the human economy and its impacts actually will determine the course of the health of the planet. So most of the conversation that you hear in the public media is all about, you know, business cycle issues, boom, bust, how do we get the economy growing? And really recognizing that things are different now. And it's always dangerous to say this time is different. But in a way that is different than people expect, I think this time is different. This slide is, I think, a really important conceptualization of the problem. This comes from a research paper, a peer reviewed research paper issued years ago called Safe Operating Space. And the idea, I won't go through it in detail, but the idea is there are, I think, nine topics here or aspects of a healthy biosphere that need to remain in balance, ranging from the carbon cycle, which is mentioned as climate change to the nitrogen cycle, to fresh water availability to biodiversity. And what the scientists tried to do is first measure where we stand as a planet on all of these critical biophysical systems and then see where we should be if we're going to stay within this safe operating space. So the idea is that the human economy has been expanding exponentially for hundreds of years, and we're now breaching the boundaries of this safe operating space, which is visually shown as the green circle. So for example, you'll see on the top climate change, we're already breaching through the safe operating space on climate, not because the CO2 today is breaching it, but because we're clearly on a path where we will breach it. And without going through each of them, obviously the alarming point is that biodiversity loss is already far worse than climate change, and all of these things, all these systems are connected. So it's not like it's okay if one's bad, but the other ones are fine. We actually have to operate the economy so that everything is within the green space as a visual. So this is a shocking chart. It's not nearly well enough understood by people who quote, run the world. This is another way of thinking about it done by the footprint network. They've sort of thrown all those things together and come up with a nice, simple, easy to understand metric, which is how many Earths are we using? The Earth can regenerate its natural capital miraculously, but it has a limit of how much you can do that, and they calculate that we now effectively use up every year 50% more of the Earth's ability to regenerate natural capital than happens. So as a result, the stock of natural capital goes down each year. So this idea is what's called ecological overshoot. Now, we don't have time to debate all that, and I'm not a scientist, but that, within the science community, that's a, that's not a controversial idea. That's accepted wisdom, and most people in the ecological and science sphere look to the economists and the people running the world and wonder why are you people so crazy to think we can keep expanding the economy, which has this expansion area aspect on the footprint, the ecological footprint in the process. So what I'm very focused on is then translating that. What, what, you know, what does that do for the financial system or how is the financial system exposed to that? Or more importantly, how the financial system is actually driving that from a systemic design perspective. And what this chart is intended to show is that our financial system is predicated on a debt-based compound interest expansionary monetary system and financial system. So we've actually architected by design a financial system that drives exponential material growth and drives us into this condition of ecological overshoot. That is, is a problem, but the more challenging problem is getting ourselves back, you know, imagine the road runner that ran off the cliff and is out there in, in space. We need to get back to a, a situation of, of ecological stability, and we're going to need to land the financial system hopefully as gently as possible in the process. And that won't be easy to do, and I think that's the piece of this that most of the, of the people talking about sustainability and we're going to, you know, do this, do that. There's other things that haven't really processed. And so let me try to make that real. There was a very important research report done about a year ago out of Carbon Tracker in Europe where they took the conventional wisdom now in science, which is that if we want to, and I'm just focusing on, on Carbon now, but you could, you could, you could extrapolate this on many of the other systems of the planet. If we accept the two degree warming threshold as the important threshold that we don't want to cross, you can calculate how much Carbon we need to put, we, we, we have left to put in the atmosphere before we breach that. And that works out to be this 565 gigatons of Carbon. And then you can actually calculate how, how much Carbon is embedded in the approved fossil fuel reserves on the balance sheets of the world's largest corporations and the nation states that own the large pools of fossil fuels. This is coal, oil, natural gas. And it turns out that we actually have already discovered and have on the balance sheets of these companies five times more Carbon embedded in the fossil fuels than the scientists say we can put in the atmosphere. So turn that other way around. In other words, we actually need to figure out a way where we don't burn 80% of the fossil fuels that are already valued in the capital markets. And then I did a little very rough calculation that says that that value, that 80% of value has a current market value of about 20 trillion dollars. And 20 trillion dollars is in contrast to the subprime direct loss from the subprime crisis of 1.7 trillion. So I'm not suggesting we need to take a 20 trillion dollar right off tomorrow and the economy is going to go on the ground, but it kind of gives you a sense of why it's going to be so difficult to shift our economic system. This 20 trillion dollars goes a long way in pushing our denial. And so Bill McKibbin is actually on to this issue now and he's just written a really crushing piece in Rolling Stone called the terrifying new math. And I think, you know, unfortunately this is what we need to deal with. And to just summarize then back to the financial system, if we have ecological overshoot, then by definition we have an economy that's predicated on this continued exponential growth. And therefore there's all of these, in a sense, off balance sheet liabilities that aren't yet recognized in the accounting that we're going to have to recognize and we're going to have to come to grips with or we're going to trash the planet and make it a place we don't recognize. So ironic. Little fossil fuel burning going on. You know, think about the price earnings multiple of any stock or the stock markets in general. They're all predicating exponential growth. So if I were to stand up and say to the world and they actually believed me that there will never be economic growth, the P multiple would collapse, the stock market would collapse. Think about the debt capacity of countries. It's all predicated on an exponential growth of the tax receipts which is predicated on exponential growth of the economy in order to balance all these budgets that are already way out of whack. Same, you know, I just cut this short, but same point about pension liabilities, underfunded pension funds. Same about how the endowments work on all the world's foundations. They're all predicated on exponential growth. So the point is that we have this kind of reckoning we need to deal with if we're serious about moving our economic system back into the so-called safe operating space of the planet. And now that I've laid out the problem. I'll take it over in the background. I'm going to leave it to my friend here to give us all the answers. So I think it's clear from what John has pointed out that there really are no powerful in-power forces with a vested interest in pursuing what it means to be in financial overshoot. It's not in the interest of our government, our political leaders as we heard last night. The only thing that we can talk about is jobs and growth. So and anything to do with green is a hot potato. It's not in the interest of the owners of the financial assets or the real assets that have been valued at levels that are not sustainable in a low growth or no growth environment. So it takes a lot of courage to be willing to think about things at this level from the perspective of what really is going on. Now, are we 100% sure about this? No. Are we 0%? Are we 1%? 2%? No. We're pretty sure. I think we're sure enough that we better pay attention to ecological overshoot and its implications for the financial system. And therefore, for me anyway, the question is well what do I do now? And I think that, I think John said this. He either said it privately a few minutes ago or just now, I can't remember. But the inclination is when confronted with this sort of monumental information that is disturbing, it's so tempting to just go to what you know and go do something and work on it and make things better and hope for things to get better and focus on change and making the world a better place. And those are all really critical things. I, however, think that unless we build a working framework for working, we're not going, we may take care of ourselves. We may feel sort of fulfilled that we're making some sort of a difference in our day-to-day lives. But we're not really addressing these huge issues that are driving essentially the survivability of the human species. So not to mention the planet or life on the planet. So about a year ago at this conference actually, Don Shaffer and I presented a paper that I had worked on with RSF called the New Foundation for Investment Management. And in it, we critiqued modern portfolio theory, which is the sort of, it's the scapegoat. You know, you just say modern portfolio theory and you can kind of get all worked up and kind of angry. And it's not, it's really kind of an innocuous thing. It's a theory, but it's achieved the level of religion, of God, whatever. So in that paper, we talked about needing to redefine risk in terms of ecological limits, needing to rethink return in an environment of potential no growth or negative growth of conventional GDP. And we needed to address the utility or the usefulness that people find in their investments. What is it that satisfies people when they make economic decisions? And those were all really, to me that was a great start. And I'm now moving to this next place of realizing that this question of what does overshoot really look like is the question that evokes the grief that Chris Jordan talked about this morning. It evokes sadness and grief. And until we recognize that, until we live it, we are not going to get to the other side, which is, in his words, is love or joy. We're not going to be able to really address overshoot unless we've confronted what it means. And so I think that we need to spend a significant amount of brain power and soul power and heart power on looking at the evidence and making some very well educated estimates of what the world will look like. And we're not talking 50 or 100 years down the road anymore. I just read Jeremy Grantham's paper. He's a big shot money manager and he's got a paper out. He's been writing about resource prices for a couple of years. And I think he said it's 10 to 15 years before we see the marginal impact of food and energy prices and water shortages that are actually going to now really impact economic performance. It's already happening. It's just that it's happening to people who are marginalized and so we're not measuring it in our pricing system. So I encourage all of us to do that hard work. I'm also going to say just quickly that I don't, I've been trying not to use this kind of language, but I'm going to use it anyway. I think that we're going to come out better. We're going to be better off than all those people who are in denial. And that really, let's just quit trying to worry about convincing all the rich people, the people with all the power and even the government. I mean, if we do our work and build our new frameworks, we're going to come out really strong. And the rest of it, unfortunately, has a good chance of sort of crumbling and fading away. And I don't want that to happen to most people, but there is a bit of a little competitive nature in me that says, you know, get on the bandwagon because you're the ones who are going to really be hurt. We're going to figure this out. These people, the stranded asset issue, it's not just oil, it's a lot of other things. And remember that all this wealth that we're talking about is an entry on a balance sheet. It's what we call mark to market. One stock traded at a price. Every other stock in the world is priced at that price and called wealth. And that is not stable. There is no God that's telling us that that's the value of that stock or anything else. So I think it's a double-edged piece here where we're making a really smart move and we're making a really soulful move to build this new framework. So with the delicious irony of all the fossil fuel flying overhead as we're all obviously observing, what I was going to ask those of us on stage who joined early for this chat, can each of you, if you don't mind, just give us the one or two words that this presentation has evoked in you. I don't want you to go on. I want to hear right from here like the one or two words that are on top of your mind as you listen to this. Starting with you if you don't mind. Confusion. Confusion. Yeah, someone conflicted. Conflicted. I definitely feel resonance with it, the work that I do. I hate to be slightly negative, but it feels like we're going about this whole impact investing thing the wrong way. Wrong way. Which thing? Impact investing. The way that we're approaching impact investing that we're just taking the current system and saying if we just plug in social environmental factors and just drive investment in those sectors that we're going to be better off and that it doesn't feel right after listening to conversations like this. Full disclosure. David was capitalism's first fellow, so he's been well trained. Oh, I didn't have to say that. I was going to say one more. Probably two things. One would be the confusion thing, but also opportunity. It's a bit exciting. It's kind of a breath of fresh air to have it out in the open and a little bit nervous. Like, where's it going to lead? It's interesting because what came over me as I was listening was sadness. So I'm really glad that along with my sense of sadness and your sense of confusion and your sense of resonance, we have a sense of hope. I don't know how many of you were in the plenary session in Cal the other day, but one of the speakers on the stage was Wayne Sylvie. Were you some of you at that conversation? One of the things that really hit me was something that he said and it wasn't actually, it wasn't really part of his formal remarks. It was towards the end of the session when they were doing some questions and answers and he was getting really frustrated and he said some swear words, I think. And then he said, I would offer, Wayne, are you in this room, by the way? Okay, Wayne. I thought you might be. Could you come over here? Sure, please. So you can cop to this statement. So the sentence that you uttered was something like, why the hell can't we get an economist? I'll offer nomination for the Nobel Peace Prize. For the modeling of, can you finish that sentence for us? I mean, it was so apt. Thank you. We're in the investment management business and in terms of optimizing portfolios and that kind of thing, especially when you think of money. And the question is today is that so many of us in our economics and this free market system, everyone is trying to maximize their own situation. And you wonder what would happen in an econometric model if it could be done if just two or three percent of our monies, if we all took two or three percent of our monies and said, you know, maybe the return isn't what's important is ecological balance, equal opportunity, maybe I'll help out on that microfinance thing where I don't get the same kind of return I was expecting of my other. What I'm suggesting is that I would nominate for Nobel Prize in economics. You have to give me the nominating address. The person who could show that if in fact you did something like that, that the stability, the volatility of the rest of your investments would be more assured, which means that the financial literature would say, I'll take that any day. Because right now in the prudent man role in others, you're supposed to just look out for yourself. But actually, if there were some kind of prudent woman role, if you will, where you actually looked out for everyone, some part of your money, with some part of your money, it may be that you're actually optimizing your entire portfolio and doing better than you are when someone does write that Nobel Prize-winning economic model, undoubtedly in my mind, it will certainly be modeled after nature and natural systems. And one thing I've learned from people that understand that stuff, like Jeanine Benyes and Biomimicry, is that nature doesn't optimize, it balances, or operates in harmony. So our whole language, we immediately default to what are we supposed to optimize, and in fact, I suspect that is part of the problem. It's exactly why I'm so glad Wayne was here. I mean, to me, what was resonant in listening to the two of you and then thinking about his comment the other day and just sort of my observations of the last few is that I think it was your point, we're sort of going about this the wrong way. And so then the thing that you and I have talked about sometimes, talking more informally about this, particularly with Leslie's portfolio management background and work, I then look at her and I say but you know there's fear involved and I don't remember, I'm never very good at remembering where fear goes with the denial grief spectrum or whether I experienced them in the right order even. But for those of you who are up here on stage and particularly if Leslie you could speak to this, you know, some of the things that you think about actually starting with, you know you say we need to like be thoughtful we need to sort of grasp this and then we need to be thoughtful rather than just all of us being so action oriented. But if I'm not the only one for whom that generates a little fear and I mean actual personal fear like I'm going to lose my money or something's going to happen that's really bad to me personally in order to get us all that's more harmonious, more balanced and I don't think there's a human on earth that's courageous enough not to feel fear at that point in time so any thoughts about that for either view but maybe starting with you? Two things, one I had a really great conversation over the weekend with Mark Fincer where he it wasn't just with me but it really hit me. When he talked about all this stuff that we're talking about about nature and cycles and systems, nature involves death, death and dying and so part of the fear that we're feeling is a very deep really deep fear of death and there's volumes written not by me on death and our fear of death well we're talking about the death and dying of a way of life of a system in an era, whatever you want to call it and therefore the first thing in my mind is to embrace that fear I mean it sounds corny but it's true embrace it, it's natural, it's okay you can't get rid of it, it's a feeling it kind of comes, it floats along it comes in, it overwhelms you, you feel it and then you say that's my feeling it's a feeling of fear and I'm going to experience it rather than running away because I remember years ago reading something called the denial of death a very well known book which brings up the point that denial is the least in my opinion anyway, I think all of us would agree, denial is the least positive response and yet it's the natural we want to just run to denial now in terms of what I would recommend sort of tomorrow what am I going to do what I am going to do and I'm still working on this I've taken a little bit of a break a little bit, I laugh about spending some time on the couch both kinds of couches, the therapy couch and the living room couch do you just move your couch into the living room couch I have a great system but anyways I see Leslie on this rolling couch talking to herself anyway so what I've decided that I'm going to just start with some of the stuff that seems pretty well known I mean again you don't know 100% sure but just start with some of the facts about population and about food supplies and food prices and water supplies and water distribution and energy and just kind of lay those out and then instead of going immediately to well how can we get renewables in the system and how can we teach population control just live with those facts and really think about how that plays out what does that look like as it plays out then look at what are the logical sort of this is where my logical brain comes in what are the economic characteristics of this played out system what's going to happen what will happen with food systems and what will happen with transportation and clothing and housing and luxury goods and iPads and iPhones and on and on and begin to develop a new just sort of a really I'm going to use the word framework again but a discipline around how we make investment decisions so rather than starting with I'm going to put 60% in stocks and 30% in bonds and 10% in real property you start with a vision for this economy not my vision not what I want it to be what do I think it's going to look like and then where do I where can I or should I plug in my money and it's going to be different for everybody some people are going to be very exploitive in their choices and others will be more community based and that's a choice that's where you have choice and then once you come to that sort of piece and there'll be preferences there'll be places you'd rather plug in then you can start to say what is the structure that works here should I consider some sort of a loan should I consider a gift should I consider a grant should I start a co-op should I start a new company myself should I do some equity investing what should it look like but that structural decision is way down the pike from that original framing and visioning piece that's what I'm going to work on more concretely in the next few months so if I got that I'm going to paraphrase it to see if I got it it's sort of it's kind of like scenario planning in the sense that you need to take the time to look whatever issue area you decide to start with sort of think about what it's going to look like if the scenario of limits plays out and then plan as well as you can your investments or your personal investments as well as your capital investments accordingly just a quick anecdote about scenario planning a few years ago I took a course put on by the global business network these are the people who have developed scenario planning based on the Shell Oil methodology some of them are former Shell people they're very highly regarded they operate around the world and they have a one week session actually here in the Bay Area on scenario planning my group which was the co-founder of the ecological footprint network and Kirsten Hennison who I worked with at portfolio 21 and a couple of other people who we kind of roped in we had a group and we part of the process of scenario planning is to come up with a quadrant system and you've got so our quadrants were one was GDP growth and we had positive GDP growth and negative GDP growth and then across the horizontal axis we had communal cooperation and collaboration and sort of on your own individualism and those were the those were the basis for the scenarios that we were going to work with we got up to present our scenarios to the group to the experts to the people who were putting on the conference well known names that you would recognize and to our co-groups and they laughed at us and they told us we were naive and that we were silly and how could we possibly ever think that we'd have negative GDP how could that ever happen that's ridiculous that's not going to happen you've got your scenarios are just not well founded that is the kind of thinking that we are dealing with here that's why I want to repeat courage take some guts to say well you know I want to think about that because I really think there's some reasons that we might actually see some real real declines so I have a big question for you but before I ask it of you the three of us can easily observe that our colleagues here on stage are of a slightly different age than we are and so at least slightly in some cases maybe more than slightly and so I think we have some set of more than one generation represented here with us and I actually thought if we could pass the microphone around again if each of you were and you've got to be brief because we've got very much a time limit here but in a sense or two you've listened to this exchange about thought and then sort of scenario planning but I want to know what's going through your minds again right now in this context so you know as you sort of start to think well what will I do maybe with the benefit in some cases for those of you who are younger that you don't actually have much of a portfolio yet so in a way that's a real advantage maybe there's more opportunity and less of this kind of fear so Jesse I'm going to start with you a couple of sentences and if you get long winded I may have to cut you off that's fine no I'll try not to so I think this issue of fear really resonates with me as somebody who's moved through a transitional period in my life with the hub is focused on a lot of recent graphs who are approaching a new economy with a lot of fear and a lot of people who are saying I want to do good in the world but I don't know how to engage with it because here's this paradigm that will that will meet the expectations for prestige and status so I think a question of what does the personal transformation look like at transitional phases for people at my age but as well as people who are in mid-career changes is a really really important one in addressing that fear Evan what comes to mind to you the conversation really resonates with me because this is exactly how I think and also I also work for the hub and for SoCAB and what I'm very passionate about and looking at as his point was that we're approaching these things the wrong way and this is a very systems level approach also it brings up to me which I think is challenging is that there's these structural elements and these are getting brought up there's also the cultural and the world view elements and that doesn't get talked about very much and that's really hard is that someone taking the investment approach that you're talking about first they have to change their world view the way they're thinking about the system then they can take a structural approach to it and some of the work Jesse and all of us are doing I think are actually on that line between the two even the axis that you'd mentioned was GEP which is more structural to you and I think that's a really fascinating conversation and one that's challenging to have and hope to see more of can I just say really quickly I think I think it's important I think the interventions that may work there hinge around community building and storytelling very important yeah Kristen what's your thought? Well I represent a community based organization and a non-profit that stands for social justice so I guess maybe fear resonates because we're already serving people who are greatly marginalized by today's economy and so as I hear you talk and you know as we struggle with balancing donations and supports and how to really sustain our community and you talk about ecological sustainability but we really look at just even our community of San Francisco and how do we make it work for so many people who are just not already included so that is different from what I thought I was coming to listen to but it's bringing up a lot for me about how to kind of make that work and that's probably the confusion that I'm feeling and then also we do have an endowment that we manage and how do we you know we do social responsible investing and I think to this gentleman earlier we do really think about how to you know in a way that is true to our values and it's different and you know we sacrifice return for that but so I'm really interested kind of how we're going to go next in terms of that portfolio structure you hang on to that because I've got a mic my name is Jason Bradford and I came at this as an ecologist actually I've got a doctor in biology and was an academic ecologist so I was the scientist that wasn't being listened to and then I I got into non-profit work and then I was a non-profit activist that no one paid attention to so I'm resonating with what you were saying and because your culture is looking at you and saying you're a nut you know even though you've got the degrees and you know the data better than your culture does and so it's really hard so what I said was that I looked at them I connected the money system to kind of why we're an ecological overshoot and red limits to growth and all that and then are you kidding me you know so so then I came to finance basically investment from the perspective of this is the frame that our that our culture has right now and I'm gonna try to give them a no-regrets financial instrument that helps us deal with this problem I think for me the two different feelings the one of the confusion or fear and then the opportunity the confusion or fear is more on the selfish personal kind of level of thinking about your own like how do I make sure that I provide for my children and that I don't make terrible decisions that mean that what we have at the moment vanishes and we're in a bad position but the opportunity or excitement there is more around going to that framework kind of level of how do we you know whether it's in our work or in our own thinking do some of those things that will set in motion changes that then will put us in a better position to deal with whatever does end up happening. My name is David Nicola I'm a business school student at Duke actually come from a background of conservation and then to finance and trading and back to conservation back to business school but I want to make I guess three quick points one of which is that when I went to business when I went to business school so enveloping yourself in an area where people aren't usually thinking about these kinds of things people are more open minded than you expect and maybe that is a generational thing I don't know number two slightly more on the negative side is that nobody thinks about environment whether it's recycling conservation ecological overshoot at all in any way shape or form in the business school there's a heavy focus on social but nothing that incorporates the two and the third one is can we phrase these ideas and we know that semantics are sometimes a problem can we phrase them in the language that people understand a focus on GDP growth is a violation of economics 101 principle where you're an 88 if you maximize revenue and you need to maximize profit that is a clear violation of something that people easily understand so is there a way of speaking in that kind of language and saying we don't want companies that grow we want companies that are cashflow positive so they're never going to grow but they're going to be cashflow positive you still make a return people might be able to understand that and then you can kind of trick them into adopting the language of the new system but I think your last comment is at least I can't see everyone out here everyone up here anyways is sort of going like this I want to open it up to the audience for questions but John my big question for you at least it's big in the sense that it requires a lot of candor from you is you've thought about this a lot and you I know because we've talked personally about it have made significant shifts in your own portfolio I mean you are really trying to take a new approach to portfolio management for yourself and also you have to care for your family I know that you like all of us have those selfish instincts how far along that path are you how would you rate yourself can I respond to Kristen's comment first well I think I would say I just wanted to say I think the this issue of do you care more about trees than people I know you didn't say that it's really important to me and I think I think that's a false choice and I think we need to get beyond that and I totally understand where it's coming from but this this idea of triple bottom line is wrong in my opinion the triple bottom line has a hierarchy and our wealth and our prosperity is dependent on a healthy ecosystem and ecosystem function why I'm so passionate about the ecological sustainability issue it's not because I love nature as much as anyone but I didn't enter this conversation as a green person or as a naturalist but it's just my memory obvious to me that if we don't put ecosystem function healthy ecosystem as the purpose that is called social capital broadly defined and particularly the most vulnerable systems the first ones that take get hammered by it I just wanted to make that point now to your question how am I doing great do you feel like this has become easier as you get further down the path of I actually feel at an intellectual level I feel like I've made some kind of real progress and defining this concept of what our financial overshoot is and I've got this idea of an economy that's a regenerative economy both socially social capital regenerative and natural capital regenerative it's very much the kind of north star I can see that and I feel I feel terrific about you know in a very collaborative effort with a lot of people that we sort of see where we need to head explaining and articulating what that means in language that my daughter can understand and my former boss at JP Morgan can understand is really really hard and someone raised I think it was you Jesse's storytelling I mean we're big into this storytelling thing and using art and culture to communicate rather than just analytics and academics but at a personal level you know I too have fear I have three children you know I'm relatively well off financially but I'm poor compared to you know people that are really wealthy and my instinct is that the wealthier you are the more fearful you become other than those that are truly you know at a at an exposed level already but I think you know I don't know a lot of really really rich people really relaxed and comfortable these days and I know a lot of really rich people I know I don't know a lot of really rich people but the ones I know are generally pretty unhappy but at a you know at a personal level and sort of my own how am I dealing with this I'm in the process of shifting my own financial investments into a theme I call you know a investing in resiliency and and I would proffer that resiliency is the investment thesis of the next 100 years and there's lots of ways that when we were talking about this there's lots of ways where you can invest in resiliency and they're not all you know buy an organic farm and grow your food although that's not a bad idea but they also are things I think we need to understand that certain corporations are far more resilient than most governments and we can't be in denial about that and so while I'm working hard to shift the way corporations work in the world and how we understand their role in the world we can't be naive and suggest that there's not 50 or 100 global corporations that are far more resilient than nation states and so as one thinks about their portfolio I think we need to think differently than the conventional ESG SRI kind of lens because we're on the usual kind of limited time frame and because you've all been very attentive I wanted to we got rid of the Blue Angels but we've got other entertainment coming up more organic but still very much live wire so I wanted to make sure we had time for questions and or conversation with the audience and I think Bjorn someone has a microphone there we go here's coming right around and we do have a hard time seeing you so feel free to stand up and say who you are so I'm Leonardo I come from Brazil I run a nonprofit in Brazil we develop financial solutions for the social sector every time we talk about this portfolio I think we end up focusing more about what instruments we're going to use what type of financial institutions will make sense with this regenerative economy but I tend to think about more portfolio of stuff we do in the world and then my mind wanders off to okay what's the role of luxury goods somebody was mentioning before why do we need a $10, $15,000 handbag what purpose does that serve and I don't want to go off and say well that shouldn't exist but at the same time I cannot wrap my mind around being dropped and we take on more organic firms with the same $15,000 anybody want to take that one I completely agree I wandered into a shop on Sacramento Street yesterday and the guy I think now I realize he probably was tracking me so I wouldn't take anything but I thought he just thought I was really maybe a good customer so I pick up this little cute really cute little bag it was made to look like a book and it was Gertrude Stein on the cover I thought oh this is so cute I opened it up he showed me the back it said $15 slash $60 I thought it was $15 then I opened it up it's $2,000 and I thought what am I doing in here so I just sort of wandered on out I don't know I don't know I don't think we have to invest in those things I think we can choose not to but I mean yeah go ahead obviously I agree with the premise but let me be controversial and my daughter is a crafts person and so I'm very close to this now and you know I wish we had more expensive handmade crafts which by the way the industry that makes handmade crafts is incredibly sustainable regenerative in many many ways and so if we spent more money than $2 on our t-shirt but we spent $15 on a handmade t-shirt or whatever I'm just making this up we'd be better off so I don't think it's you know obviously $10,000 for a handbag is probably off base a little bit but there are worse things we could do with our money than to buy a $10,000 handcrafted handbag and where my mind went was towards the beginning of this conversation where one of you said those are the things we just should not bother thinking about I mean there's a part of me that just sort of says I've so long ago realized that I not only couldn't buy that handbag but I didn't want to buy the handbag and I didn't actually care about the handbag I care a great deal about artisanal and very very resilient craft making as an artist myself so that I do care about but that was kind of where my mind was and that the artist can actually make a living exactly that artists are sustainable too but there's actually a broader point that his example brings up is that human beings look for their culture and so there are subcultures that are wealthy and it's this sort of arms race of impressing your peers and it doesn't matter where you are on the income level there are people that get beyond that obviously but in general for 95% of people they're going to find a way to impress their peers you know we've got a race out here for example and so what I think and this is part of the whole dynamic of needing to grow the economy and needing to have a consumer economy is always growing is you've got to find a way to increase consumer spending and whether it's high up on those luxury goods or opening up new global markets so you can bring the billion two billion people that don't have cash income into that market so they can start buying goods you replace the new global market and that's what I think I think that's the most important thing in the global economy of trade and community economy with a formal economy of money systems they're all related we want to get a couple more questions out Bjorn Bjorn I'm sorry we have a couple more questions he's got it I'm sorry I apologize I can't see you but I think the the GDP growth is likely to be negative and substantially negative in the years ahead but just a question for you guys in terms of this notion about are we going about it the wrong way in terms of say impact investing or searching for solutions and particularly solutions that have that capacity to restore you know if there are sort of winners and losers and I sort of believe that there are winners and losers and losers and losers and losers and losers so hopefully sort of like in any dislocation surely the sort of hunt for and betting with sort of solutions that have this are the resilience or even better restorative theme to them are the things that we should be focusing our efforts on so but the question is you know are we sort of betting against the notion of growth or simply that and so on are going to fail, but the fundamentally, the notion of allocation towards restorative and profitable and growing enterprises is something that in itself is not being rethought. Well, two thoughts came to me as you were asking or talking. One is one of my favorite quotes is Herman Daley talking about a steady state economy and how it's not just a static line. It's not just everything is just boring and straight across and it's like nature. There's growth and deaths and cycles and ups and downs. And so it doesn't mean it's not interesting and exciting and that there won't be winners and losers. You can frame it that way or just things that are on the kind of the growth cycle and things that are fading out. So that's one thing is that that's how I kind of want to think about it. And I think it's probably a little bit more realistic to think of it that way, which is I think you were saying. And the other is when we say are we going about it the wrong way? My issue is if we don't have this framework that is really tightly thought out and really logical and really makes sense, then we're sort of relegating ourselves to this little marginal piece, even though this is a fantastic group of people and the energy is incredible. It's still a little kind of a little marginal group, but still just a little spec. And so I just think we want to get, I'm not saying we need to go knock on the doors and try to convince people. I just think we can do it better by having this framework and operating within it and being very transparent and clear about what we're doing. And I know it'll for me it'll have I'll be able to it opens the it opens the the universe of people I can I can influence. Yeah, so I actually want to speak to the issue of fear. So what I've discovered for my own portfolio is that I'm very fearful right now because I don't trust the methodologies of the past and I don't trust the markets currently. I think they're very manipulated by those who have a lot more wealth than me. And so what I've decided for myself is that if I keep following traditional investment philosophy, my future is really not in my control and more likely than not 20 years from now have a lot less money than I have today. So I've decided that I need to take control of this myself. I need to think about this very differently. I like Leslie's idea about a framework. I agree with that. And I need to start investing the old way where you know the companies that you're investing in and you know the things you're investing in. And if I'm going to do that, I might as well do it in things that have a social value for me too. And I will likely screw up along the way and I may end up losing my money. But I think I may lose up end up losing my money now anyway. And at least this way, I'll have a lot more fun along the way. Thank you very much. Can I make one quick? Well, actually, I've got Bjorn on me. So Bjorn, how's our time? Time for one more comment? Out of time. I couldn't hear you. We're out of time. Out of time. So I'm sorry, John. Actually, I'm really grateful that we started out small. And had you join us on stage, this was actually a lot of fun. And this was live streamed. So I think it'll actually be one of the more substantive conversations that we've captured. And thank you also for all of you joining us and have a great rest of the afternoon. There's some great programs here in this room still to come. So come back and join us. I think it's at 3.30. Thanks. Thank you both.