A new pitch for Bank of Nature
Our ongoing quest for the language that engages. Does this land?
As with any startup, the pitch is critical. Think Shark Tank.
We’ve tried a number of ways to introduce Bank of Nature in our development, helped immensely by the support of Arizona State University over the past 12 months. We’ll try many more. It’s trial and error. And, frankly, we’re not selling the next disruptive widget, which is hard enough.
We’re selling, what? A point of view, a philosophy, an economic model, a new way of living in nature, a definitive fix for the climate crisis? It’s not an iPhone.
You see our challenge: Bank of Nature is a very big idea — as big and complex as the climate crisis. It, well, demolishes our conventional thinking, all those assumptions we rely on to do our day-to-day living regardless of where we call home. It delves into intimidating, technicality-blinding black boxes of mystery — aka “fiduciary finance” and the triggering issue of money that many of us so actively avoid. It confronts hard questions about how society measures its successes amid the obvious systemic costs to achieve those successes.
We’re asking people today to correct a problem not of their making — just as we’re leaving the hard, bandaid-ripping decisions (of what do) to future generations, not yet born. Unless, we choose not to punt.
So, yes, capturing a snappy pitch that can “save the world” is a big ask. It’s one we’re up for — because once you see how this might work, you can’t unsee it.
Ok, I’m still working on the Bank of Nature bumper sticker.
I had some time away last month away and returned with a new take on what the Bank of Nature is offering to the challenge of climate inaction. What are your thoughts on this approach? Insights, fixes, better ideas are always welcome. ian@bankofnature.eco
Cue Shark Tank’s intro.
Bank of Nature catalyzes the way we finance climate remedies at planet scale by engaging fiduciaries of global pension funds as "the heroes of climate security."
It's partly finance reform.
It's partly a legal challenge.
It's a philosophy about how society can substantively address climate mitigation at scale through an interactive economy that treats nature like a lender/corner bank.
It's a practical/renewed application of the existing but forgotten legal imperatives called fiduciary duty and stewardship that are in the DNA of fiduciary monies like pension funds.
The conservative estimate of the global value of pension funds (and endowments, which are together called "fiduciary money") is $35 trillion or about twice the annual GDP of the US. That's roughly the cost of decarbonizing the global economy. Other estimates put the value of the global pension market at almost $60T.
That’s 60,000 billions of dollars sitting right there that isn’t stuck in government and corporate shareholder debates.
Scale is the missing link in climate mitigation. Nation states and industries, in many cases less valuable than some pension plans, are ill suited to address the cost sector that is the climate crisis. Borders, growth obligations and short-termism are all factors in climate inaction and endless, fruitless negotiations.
Pensions, which operate at the scale of climate, are far more vulnerable to challenge and Bank of Nature is pushing that envelope.
Through a change in US legislation in 1972, pension funds became institutional players in speculative markets like Wall Street -- markets that were specifically designed for individuals. It has made a lot of money for non-fiduciaries.
While nominally managing money for pension beneficiaries, pension funds today wield an outsized role in how markets and economies evolve. They meet their "fiduciary" minimums through high-commisioned asset managers who are not bound to the fiduciary responsibilities due to those beneficiaries.
Essentially, pension funds are gambling in speculative markets to make their annual 7% or 8% returns. Most often, they do this at the expense of our climate future -- the future their beneficiaries will live in.
Our legal argument is that pension funds, despite the status quo assumptions, are working outside the law. At a minimum, they are in breach of contract.
Perhaps the only substantive aspect of society that is focussed on long termism is the pension sector. They have 75-year rolling "contracts" with pension beneficiaries to provide a dignified retirement. Today's 25-year-old new hire could be alive in the 22nd Century with a growing population of centenarians, collecting pension benefits for 35+ years.
This, of course, means that:
A pension that diminishes that future by, for example, expanding its investments in fossil fuels today, is actively working against the interests of that new hire.
A pension plan intends to be operating in 75 years in order to distribute monthly checks to those beneficiaries living in a climate-changed future.
Before pension funds are compelled by the law, we expect them to self-regulate and begin to take "the safer alternative path" to not only meet the future needs of their own beneficiaries, but also indemnify themselves against future legal claims.
Bank of Nature provides a real-world "safer alternative" framework. Specifically, Bank of Nature will be the stewardship channel for fiduciary money to act directly in mitigating the climate crisis through science and justice: restoring natural reserves, decommissioning toxic/climate-dimming enterprises, repaying negative externalities, as examples.
Pension funds still make their annual 7-8% returns to live on forever (in actuarial terms), but also make good on their promise to future retirees.
There is a lot more to unpack, but we're excited by the transformational, world changing potential of activating pension funds, that are literally untapped stewards with the capacity to do what governments and industry fail to do.
We're building out the case, expanding our network and readying a legal filing that we expect will jumpstart a much larger mainstream conversation: What is fiduciary duty in the climate era?
Our initial ask to investors here on Shark Tank: $1 trillion.
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