Scientific knowledge is the key to the coming investment revolution.
By Hazel Henderson
Hitting the Books Beyond Business School
Asset managers have long understood basic principles of geology to guide their investments in fossil fuels, reserves and mineral deposits. Similarly, commodity traders have backgrounds in agronomy, weather patterns, hydrology and soil science. As investors moved into forests, livestock, ranchlands and agriculture, they learned about silviculture, biodiversity and ecosystems. Aquaculture investments require understanding water, oceans and changing fish stocks.
The green energy and cleantech investing revolution now scaling worldwide requires asset managers to learn basic principles of physics, thermodynamics, chemistry and more about the principles of life on this planet.
Exit from La-La Land
All these basics of science are still rarely taught in business schools. Finance classes are still largely grounded in obsolete economic theories, narrowly focusing on money and financial risk and often based on mathematical models that failed spectacularly in the crash of 2008.
Yet, these defunct tools are still in use, often amplified by computerized high frequency trading based on algorithms that now comprise up to 70 percent of all trades on public exchanges and electronic platforms. In Flash Boys, Michael Lewis states that Wall Street’s iconic markets are now rigged in this kind of electronic front-running. I have made similar critiques in our Transforming Finance TV series, distributed worldwide at www.films.com.
We at Ethical Markets have also tried to bring investors and markets back from cyberspace and their illusions of abstractions to the real world with our Green Transition Scoreboard® and the Principles of Ethical Biomimicry Finance. Understanding Life’s Principles, which have led to 3.8 billion years of successful innovation, requires another scientific advance for asset managers – beyond current ESG, “green,” “ethical” and “impact” investing.
Mission to Planet Earth
This next expansion of our frameworks and time horizons requires Earth Systems Science, with real-time data from the 120 Earth-orbiting satellites reporting on the actual conditions for our survival going forward. While NASA and other nations’ space programs spend profligately on dreams of sending humans to Mars or capturing asteroids for mining their minerals, NASA’s Earth Science program has a quieter, more realistic purpose.
This “Mission to Planet Earth,” initiated in the 1980s by astronaut Sally Ride, is composed of Earth – observing satellites monitoring conditions and reporting vital real-time information to policy makers, businesses, academic institutions and researchers worldwide. These Earth-observing satellites are overseen by the GEO consortium and made available to decision-makers worldwide.
Marrying Finance and Science
Now it is time to crank all this information into finance.
All asset managers and investors need real-time information on how our planet takes the daily flow of photons from our Sun, processing them through the atmosphere, oceans and lands. These photons are the source of all processes and life forms on our planet, together with geothermal energy from the magma at the Earth’s core – fostering the phytoplankton blooms in our oceans that underlie our food chain.
Are asset managers and investors up for this new curriculum?
We think so, since investing is about applying what we know, creating technologies, processes and enterprises to serve our human needs and continue our evolutionary journey into cleaner, greener, knowledge-rich economies now unfolding. This is the new rocket science, looking upward to the Sun for our energy and using our eyes in the sky—rather than digging into the Earth.
MBA in Plant Science
It’s learning from plants, which invented photosynthesis and harvest those free photons in their leaves and produce our food.
It’s learning how 10,000 varieties of salt-loving plants can provide food, fiber and oils, using desert lands and thriving on seawater. It’s learning that 400 other kinds of phytomining plants mine millions of tons of minerals out of soils, drawn up into their stems and leaves. These “phytominers” harvest nickel and other metals while cleaning up polluted land and providing alternatives to wasteful toxic industrial mining.
Investors are learning how to use Earth’s most abundant resources: underutilized plants, desert lands, saltwater and sunlight. And we believe that asset managers and investors are fast learners. They are helping accelerate the global shift from the early fossil-fueled Industrial Era to the next Solar Age.
Hazel Henderson digs deeper into these developments in “Mapping the Global Transition to the Solar Age.”