October 21st, 2014

How do you scale sustainable Ag?

How do you profitably invest in the scaling of sustainable Ag—farms that not only produce abundant and diverse fairly priced clean healthy food without relying on non-renewable inputs or harming the environment, but which also restore soil fertility and enable farmers to make a fair living? Small farms and Community Supported Agriculture partnerships are nice, but they are predicted in the best-case scenario to reach only 1% to 2% of the population.

Farmland LP, a San Francisco, Calif.-based fund manager and farmland manager pursues this goal by converting conventional mid-size farms to multi-crop “beyond organic” properties that use a closed loop where everything on the farm stays there, a process that reintegrates livestock, also making the system sustainable.

For more (but not all) of the story, go here:

www.theguardian.com/sustainable-business/2014/oct/20/investing-sustainable-agriculture-farms-beyond-organic

October 16th, 2014

Kristof on Impact Investing

In his new book, A Path Appears: Transforming LIves, Creating Opportunities, Kristof argues that our cultural mindset is holding us back in terms of solving environmental and social problems. And that is true for impact investors as well.

For more, go here:


www.fa-mag.com/news/kristof-impact-investors-need-to-shift-their-thinking-19476.html

July 15th, 2014

Web Site Matches Ag Deals With Rich ‘Crowd’

What do Jeremy Grantham and Jim Rogers have in common with Silicon Valley’s Vinod Khosla?

They are hot on agriculture—a space that has not been particularly accessible to non-institutional investors.

But Agfunder, an equity-based crowd-funding platform, hopes to change that by linking accredited investors with opportunities in agriculture, Ag tech and food processing.

"We are trying to create the financial infrastructure for agriculture," says Rob Leclerc, co-founder of the New York-based firm.

Late last month, it closed its second campaign, a $350,000 financing for Oakland, Calif. -based Kuli Kuli, a superfood startup that sources its miracle herb Moringa Oleifera from women’s cooperatives in West Africa. The company, whose minimum investment was $15,000, ended up raising funds from notable investors including angel and venture capitalist Brad Feld (co-founder of Mobius Venture Capital and Tech-Stars, among other things), venture capitalist and five time CEO Derek Proudian (who ran one of Elon Musk’s companies), and Mary’s Gone Crackers co-founder and Chairman Mary Waldner, who last year sold her gluten-free cracker company to a Japanese firm.


For more, go here:

www.fa-mag.com/news/web-site-matches-ag-deals-with-rich-crowd-18595.html

July 4th, 2014

Off-Topic: Whimsy in the Garden

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"Darkness cannot drive out darkness; only light can do that, " Martin Luther King, Jr. once said. On a sunny Sunday in Seattle, I strolled over to Chihuly Garden and Glass, the two-year old museum located in the shadow of the city’s landmark Space Needle. Near the entrance, I took in the joyful tones radiating from the Andean woodwinds and strings of Quichua Mashis, a band of Quichua Indians from northern Ecuador.

Seattle’s Dale Chihuly has taken glass blowing from the realm of craft to dazzling blockbuster sculpture. In this exhibit, for example, consider Mille Fiore (1000 Flowers), a nearly 60-foot installation of otherworldly glass botanica that glow in the dark— red spears, blue blooms, green stalks, giantesque yellow and orange lily-pad like blossoms, an 11-foot tower full of icky crawly-looking yellow, orange and red tentacles.

This is color at its most brilliant—luminescent. The forms are natural, says Chihuly, who likes to talk about the breath of life that is engaged in the blowing of glass with fire. “They [are] organic, but they [are] not imitations of natural life,” he says in a pre-recorded museum tour. “They seem to have a life of their own.”

Yes, they do—and that’s what makes this whimsical garden seductive and suggestive, haunting, unsettling—and consciousness blowing. Ultimately, art with a capital A is about moving you outside your emotional and mental boxes. Chihuly uses his work to change the nature of a place—a room, a body of water, a botanical garden. This is not just sculpture but architecture—often on a landscape-scale, incorporating the artist’s own kind of, well, feng shui.

A child of the Pacific Northwest, Chihuly, now 72, began working with glass at the universities of Washington and Wisconsin, and at the Rhode Island School of Design, or RISD. After spending a year in Venice on a Fulbright Fellowship, he founded the glass program at RISD and taught there for ten years.

In 1971, he co-founded the Pilchuck Glass School near Stanwood, Wash.—something that no doubt explains why there may be more hot shops per capita in Seattle these days than on the island of Murano. Blind in one eye, he has not blown glass since a body surfing accident in 1979, and he uses a team to achieve his (and maybe their collective) visions. His work, which has become ubiquitous, can be found in over 200 museums, galleries, casinos and botanical gardens around the world.


The exhibits at this hometown museum span the glass guru’s career. Several installations are well known; for example, Glass Forest, a grove of spooky spindly albino shoots that shine in the dark, lit by neon and sprouting from eery pinkish-blue roots. Another gallery features a table of lovely sepia glass bowls bent by fire to mime the asymmetric shapes, as well as the textures and patterns, of the old and crumply Northwest Indian baskets that inspired them. Included, too, are five of the dazzling multipart chandeliers, baroque behemoths that weigh up to 900 pounds, immortalized in Chihuly over Venice, the 1996 PBS documentary.

A sucker for sea glass, I was particularly taken by the swirly blues and purples of the 20-foot Sealife Tower made up of surprisingly voluptuous sea anemones, starfish, urchins and conk shells. The climax, though, was the Persian Ceiling, for which Chihuly’s team morphed from creating sea forms to characters that might live inside those shells.

In most of the museum, the artist uses the properties of glass to mirror, echo, bend and absorb light in startling ways. But here, you don’t just look up at the rainbow-colored beings; you walk under them and through their reflections. Light and color are energy, and you absorb it on a sensory and physical level—a magical experience that for me was compounded by the sound of Quichua Mashis’s flutes leaking in from the out of doors.

The coup de grace is the museum’s 4500 square foot “glass house.” There, suspended from the ceiling is a 100-foot sculpture made up of 1340 red, orange, yellow and amber glass plates. These exuberant flower suns seem to float like a child’s bubbles, achieving in me a complete and utter lightness of being—clearly an altered state.

Step outside to the surrounding garden/glass-scape, and they continue to dance through the Looking Glass, an integral part of the garden view.

Sitting in the garden afterward, as I admired Chihuly’s Neodymium Reeds and the 16-foot diameter Pacific Sun exploding in yellow and orange beams amidst the black mondo grass, my only regret was that this is a museum and thus a showplace and so outside the bounds of access for everyday life. Light drives out dark, and here in the gloomy Northwest winters, I need that.


copyright ellie winninghoff


A version of this article was published at the Barron’s Penta blog.

June 28th, 2014

SRI Pioneer Amy Domini Takes Impact Investing to the Public Markets

Co-founded together with Oakland, Calif. -based Kristin Hull, Amy Domini has started Nia Global Solutions, a new type of portfolio that takes impact investing into the public markets.

The portfolio consists of narrowly focused firms whose sole purpose is to solve intractable environmental and social problems. Areas of interest include renewable and efficient energy technology, inclusive finance, environmentally friendly affordable housing that promotes community development, organic/GMO food products, health care, affordable transportation and educational opportunities that level the playing field.

"The piece of impact investing that resonates with me is extremely targeted outcomes," says Domini, who has pointed out that venture capital often "disappoints" in this regard because the best financial result for venture capitals often come from selling a firm to a bigger company. "Couldn’t the purchase of public stocks, rather than venture capital, meet the solution orientation of impact investors without this tragic outcome?"

Nia is Swahili for intention or purpose, and for Domini and Hull, it has a double entendre. Besides investing intentionally, NIa’s goal is to demonstrate that these companies can add significant value to society by solving meaningful human problems while earning a competitive return for investors.


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"This is unchartered territory in terms of what kind of difference we can make, " says Hull, who has followed up on her belief that foundations should invest all their assets (not just 5%) to serve their charitable purpose.

To see the rest of the story, go here:

http://wp.me/p3rLoC-bCf

To see Pinpointing Sustainability, my previous story about Domini Social Investments, go here:

www.fa-mag.com/news/pinpointing-sustainability-9108.html

And for more about Kristin Hull, see my Barron’s piece about The New Philanthropists, which you can find here:

http://ow.ly/2tvwDX

June 15th, 2014

Shining a light on an impact investing niche

A new web portal has been launched that offers investors a clearer entry into the world of community development finance institutions (CDFIs.)

CDFIs comprise a niche inside the impact investing realm, usually consisting of unregulated loan funds devoted to funding local businesses and non-profits. While there is growing interest in these entities, whose funded programs can range from solar power for affordable housing to financial services for immigrants, they operate mostly under the radar of analysts and can be a baffling market to assess.

To help investors explore the hundreds of funds that operate in the niche, the rating service formerly known as the CDFI Assessment and Rating System (CARS) this week rebranded itself and launched Aeris Cloud, an online portal that offers data and analytics on the financial performance and social impact of these community investments. Among other things, the portal includes a “CDFI Selector” that enables investors to search by impact area (women, food, healthcare, etc.) as well as various tools to compare CDFIs with one another.


To read the rest of the story, go here:
www.fa-mag.com/news/shining-a-light-on-an-impact-investing-niche-18284.html

For more info on Aeris (formerly CARS), see my prior story here:
www.fa-mag.com/news/a-go-to-place-where-advisors-can-evaluate-nonprofit-loan-fund-12679.html

December 24th, 2013

Can Sheep Restore Patagonia’s grasslands?

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Patagonia Inc. is buying its merino wool from ranches that aim to restore degraded land in Argentina with livestock, a controversial concept

by Ellie Winninghoff

"Sustainability is a joke in comparison to the premise of regeneration." Joshua Finch, Daily Kos

Patagonia’s unique and complex grasslands are among the most damaged in the world, and roughly 20m acres have been abandoned. 

As a scientist, Pablo Borrelli has spent his entire career working on desertification—both as a research fellow at Argentina’s National Institute of Agricultural Technology and as a trainer and consultant evaluating and planning grasslands for sustainability. But despite his recommendations that farmers reduce their livestock, their land had continued to deteriorate and they were left with less to sell. 

"We were completely stagnant with the old paradigm," he says. "The farmers wanted new ideas."

In 2007, Borrelli and Ricardo Fenton, co-founders of an Argentine company that manages and develops a network of wool producers, met early practitioners of “holistic management and planned grazing,” or HM. They used the process —developed by controversial Zimbabwean and rancher Allan Savory—to heal grassland, eventually doubling the number of animals they grazed. 

The next year, in 2008, they started using HM at Estancia Monte Dinero, Fenton’s 65,000-acre family estate. Within two years, Borrelli says, they saw more positive changes in the grassland than they had seen in the previous 10. New plants were covering the bare ground, increasing biodiversity, including many more plants considered rare—in some cases, plants that had not been seen there for 30 years. 

Thus encouraged, their company Ovis XXI created standards to certify sustainable grazing and branded its wool as sustainably harvested. Then, as Borrelli introduced HM to more ranchers, they looked for a customer. 

This fall, Patagonia Inc., the high-end Ventura, California-based outdoor clothing company that has long worked to minimize its negative environmental impact, began selling about 50 items made with the Ovis XXI brand. Rather than engaging in mere “responsible” sourcing, in which it tries not to hurt the environment, this is part of an effort to actually restore the environment. Patagonia and Ovis XXI partnered with The Nature Conservancy (TNC) to create the Grassland Regeneration and Sustainability Standard (GRASS), a set of land management protocols and conservation goals to certify results. 

Degradation or healing? 

But the whole concept of HM remains controversial. Ecologists blame livestock for degrading the world’s grasslands: some 70% of Amazon forest is now used for grazing—and 20% of pastures are degraded through overgrazing, according to a 2006 report from the UN Food and Agriculture Organization. 

Meanwhile, Savory contends that herbivores like cattle and sheep can actually restore these lands. (His TED talk, How to Green the World’s Deserts and Reverse Climate Change, has been viewed by more than 1.6 million people since it was posted to the Internet in March.) “Mimic nature,” he exhorts.

By that, he means emulate the behavior of wild animals of eras gone by. Chased by predators, they fertilized the plains with their dung as they roamed broad swaths of land in tightly knit herds. The migrating trampling of their hooves breaks up the surface of the land, he claims, so it can absorb rain like a sponge. In the modern world, this is done via electric fences, which might split a pasture into, say 12 or 16 partitions, in which animals graze for a few days at a time. 

Savory was influenced by French pastoralist Andre Voisin, who, upon observing his cattle in Normandy, noted that if they were left in the same space for more than a couple of days, they over-grazed the plants they liked and under-grazed the others. So he advocated “following the grass”, or carefully rotating livestock in different paddocks to eat grass at the optimum time in its growth, for the optimum amount of time. 

Savory, who brought Voisin’s ideas first to Africa and then to other semi-arid and arid climates, argues that animals left alone in one place for extended periods of time chew their favorite grasses down to the roots, killing them and causing erosion. Ultimately, he says, overgrazing is not about the number of animals on a fixed amount of land, but the amount of time the plants are exposed to grazing and the amount of recovery time in between. 

The evidence, though, is inconclusive. In 2008, David Briske, professor of ecology and ecosystem management at Texas A&M University, and his colleagues published a report called Rotational Grazing on Rangelands: Reconciliation and Experimental Evidence. In this broad study, they found no evidence for the ecological benefits of rotational grazing. There’s only anecdotal evidence; no scientific data, they said.

Briske, who calls Savory’s TED talk “over the top,” says HM shares similarities with what is generally known as “adaptive management,” a concept developed by Canadian ecologist Crawley Stanley Holling in the 80s. “That’s widely accepted as being valuable, and we are looking for more effective ways to implement it,” he says. “But HM is tied closely to intensive rotational grazing, and there is no evidence that as you go more intensive that it’s necessarily better. [Savory’s] results are counter to general ecological principles.” 

Even so, Briske says that grazing, properly managed, can speed up the mineralization process that heals the land. 

Many variables

Daniela Ibarra-Howell, co-founder and CEO of the Boulder, Colorado-based non-profit Savory Institute and an early practitioner of HM with her husband Jim, says HM is not just rotational grazing, but a design technique and decision-making process for planning around many, many variables including ecological ones—where, for example, the birds are hatching, where poisonous plants are at certain times of the year, where water restrictions are.

"In many cases, just doing the planning will allow a rancher to tap into unrealized potential of his/her land, and can immediately increase stocking rates," she says. "With time, ecosystem processes are made more effective, plants increase in number and diversity, soil is covered and fed, and carbon sequestered making rainfall more effective, etc resulting in an increase in the land’s carrying capacity [and thus an even higher stocking rate.]"

But the ability to increase stocking rates is “very, very contextual,” she notes. “It depends on the nature of the land, the initial stocking rate, the weather, the infrastructure, the timeframe and myriad other considerations that are very unique to each whole.”  

Not a nature preserve

GRASS is a revised version of Ovis XXI’s initial sustainability standard—one that took the three partners a year to agree to. Half of the 52 farms certified last year are using HM. But the standard is focused on results; it doesn’t prescribe a specific ranching method. Instead each ranch must have an approved management plan accounting for things like the effect of grazing on wildlife and water quality, along with annual assessments and monitoring confirmed by external on-the-ground and satellite audits. And it includes an overlay of TNC’s conservation goals, which are results-oriented.

"This is a ranching project—not a nature preserve," says TNC senior ecologist Chris Pague. "So how do we get conservation out of these guys doing good grass management? I don’t know what it was like 5000 years ago with millions of guanaco and rheas running down there. But what I can say is: Will that grouse bird be OK? Let’s be sure, and make it part of your ranch plan."

Ranches are scored based on a rangeland health index incorporating about fifteen biological indicators including things like wind erosion, the vitality of shrubs and key species, and percentage of vegetative cover. Each relates to ecological processes and correlates with key environmental services provided by grasslands such as soil stabilization and biodiversity—not just plants, but also micro-and mega fauna and wildlife, above and below ground and in the water. Scores for each biological indicator, which are cumulative, are weighted based on its importance relative to environmental outcomes. Total potential scores range from -130 to +130, with negative values indicating deterioration.

To make evaluations, the scores are compared to those of “reference areas”—sites in each of Patagonia’s 13 ecosystems that are meant to identify the healthiest biological activity.  

Although three-quarters of the farms certified last year had negative scores, the goal is a positive score. Farms in recovery, with a score of at least five, are identified as the Ovis XXI Restore Brand. Full accreditation requires a positive score of 15, which means that the land’s ecological status is healthy. The highest score last year was 45. 

"We are measuring indicators, and if those indicators are moving in the right direction, we have confidence that direction is grossly correct," Pague says. "Borrelli’s commitment and willingness to adapt until the agreed-upon outcomes are achieved is contagious. Their kids are out there monitoring grasses with them. The kids are at the workshops. These people are excited that things can be different." 

In fact, there are already farms beginning to perform better than the reference areas, which were chosen because they had been left alone and “rested” for a long time. Says Borrelli: “We say very seriously that we are building future reference areas.” 

copyright Guardian Ltd. 

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A version of this story was published at The Guardian on Dec. 23, 2013. You can view it here:  

www.theguardian.com/sustainable-business/patagonia-sheep-grass-ranch-savory/

November 27th, 2013

Investing in Hurricane Sandy

Community Capital Management’s flagship fund, CRA Qualified Investment Fund, will dedicate $100 million of fund assets to invest in disaster recovery and redevelopment projects in New York, New Jersey and Connecticut in the wake of Hurricane Sandy.

"We have some existing shareholders in the mutual fund that want a portion of their investment targeted toward Sandy, and other banks and entities are also looking at this," says Barbara Van Scoy, senior portfolio manager at the Fort Lauderdale-based fund. Given that the shareholders include 39 banks and nine other institutional shareholder and separate accounts in the area, she says that $100 million in Hurricane Sandy is a "drop in the bucket" for the fund. "I would not be surprised if we end up investing $250 million."

"There is just so much to be done," she says, adding that the fund has also had a $100 million Hurricane Katrina initiative—and yet continues to invest in New Orleans. "This is not something where it only takes a few months or even a few years to recover. Unfortunately, they are still rebuilding, and we still support the Gulf Coast."

To read the rest of the story, go here:

www.ethicalmarkets.com/2013/11/27/investing-in-hurricane-sandy/

November 22nd, 2013

Carpe Diem

Howard Buffett is promoting a brown revolution to improve soil productivity and help feed the world’s billions

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When it comes to feeding the world’s hungry people, the game-changer is no-till conservation agriculture. “Soil is any farmer’s most valuable working capital,” says Warren Buffett’s son Howard G. Buffett, who spends most of his time managing the Howard G. Buffett Foundation, based in Decatur, Illinois. “Soil fertility has the single  largest impact on production capacity.”

Buffett and his son Howard W. Buffett were in Seattle recently to discuss their new book and manifesto, 40 Chances: Finding Hope in a Hungry World. Both men are farmers, and Warren Buffett has said he’d like Howard G., 58, currently a board member at Berkshire Hathaway, to succeed him as non-executive chairman.

"Forty chances" refers to 40 seasons—the number of chances a farmer probably gets to plant his crops and improve them. When Howard G. heard the idea, it stopped him cold. Realizing that it applies to other aspects of life, too, including philanthropy, he wondered if he was making the most of his chances-listening to new ideas, learning from his mistakes. He’d been making donations since the late l980s—usually in the area of wildlife conservation. But he had had an epiphany when a colleague pointed out that "no one will starve to save a tree."

In 2006, Warren Buffett announced he was giving away the bulk of his fortune. At the same time, he challenged his son by asking him if he had the resources to do something great, what would he do? Howard G. realized that if he really cared about habitat protection and biodiversity, he’d have to focus of a more fundamental issue: hunger and food security for the world’s poorest billion people.

To read the rest of the story, go here:

www.ethicalmarkets.com/2013/11/22/howard-buffett-is-promoting-a-brown-revolution-to-improve-soil-productivity-and-help-feed-the-worlds-billions/ 

September 27th, 2013

The New Forestry

Ecotrust Forest Management’s fund is earning strong returns by valuing the trees it isn’t cutting down.

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A new style of forestry fund is earning solid returns addressing one question: How do you profitably invest in a sustainably harvested forest—not just the wood in the trees but also in maintaining clean water, flood control, habitat for fish and wildlife, and carbon storage? The key principle is to value what is left in the forest as much as what is removed.

To read my entire blog post at Barron’s Penta, go here:

http://blogs.barrons.com/penta/2013/09/27/modern-money-trees/