March 2015

Celebrating Our Fifth Anniversary & Sharing Our Second Annual Report

A Letter From Our Founder


Dear Capital Institute Stakeholders, 


The year 2014 marked Capital Institute's fifth year in service. Astonishing how fast the time goes by when you are having fun! 


In this, our second annual report, I would like to review just three themes that I think best represent our contribution to the unprecedented global challenges we face. 


The first is our work on a theory of regenerative economics, very much the "source code" of everything we do. I was honored to have the opportunity to present this framework at a roundtable of sustainability leaders convened in 2014 by the Norwegian global classification and advisory company DNV GL. The framework was advertised as a work in progress, and an amazing thing happened. Rather than the too often experienced attacks from participants around flaws and failures, I received an embrace of warm support and constructive contribution that has since been integrated into the framework. 


The theory has been further enhanced with the arrival of Dr. Sally Goerner as Capital Institute's Science Advisor this year. Sally brings serious science chops to our work, providing a more rigorous foundation to the theory. Interestingly, Sally's understanding of energy flow science served to affirm and reinforce the framework, giving me great confidence that we are on the right track. As a point of reference, here is what Jane Jacobs wrote about Sally's book Clockwork Universe: The Emerging Science and Culture of Integral Society (1999/2007): "...fascinating and amazing in scope. This is the current human condition, socially and scientifically, laid out for all to see." 


Theory is important at times of great change, when it becomes clear that existing theory is inadequate. Now is such a time in the realm of economics. To quote Einstein, "It is theory that determines what can be observed." We are blind to the systemic solutions we need without first seeing a new conceptual framework. But of course, theory alone is inadequate. For theory to be valuable, it needs to be validated in the real world. This brings me to my second theme: storytelling...


From the 
Future of Finance Blog: 


The following post was adapted from a chapter I wrote for John G. Taft's new book, A Force for Good, published just this past week by Palgrave Macmillan. John is the CEO of RBC Wealth Management, and I am proud to be in the illustrious company of individuals like Mary Schapiro, Robert Shiller, Dominic Martin, and Sheila Bair who were invited by John to contribute to this book.  I think you will find A Force for Good a fascinating read as it explores, from a variety of experienced perspectives, how the financial industry can marshall, for the long-term public good, the creative energies and brainpower it has deployed in the past to develop derivatives, high-frequency-trading technologies, and other engineering complexities.  



In 2011, the Economist declared that civilization had entered into what is known as the Anthropocene era - a geologic period in which human activity is altering the health of earth. The piece contended that if we continue to operate as we have, we will cause irreversible damage to the life-supporting systems of the planet.


What the Economist failed to point out, however, was the critical role that finance plays in shaping this outcome.


Our relentless pursuit of the exponential growth of financial capitalism, hardwired into our economic system, will bring us to the brink of collapse if we do not change course.


Science tells us that our planet, along with all of its complex, interconnected biochemical systems that enable life to exist, are fixed in scale. Yet our dominant economic theories assume that our path to prosperity requires limitless, undifferentiated, exponential growth of the economy's metabolism - defined as raw materials in and waste materials out.


The emergence of the Anthropocene era requires a seismic shift in our economy. We must transition to a more sustainable and inclusive economic system that serves the needs of people while respecting the earth's physical limits...


What We're Reading

 A Force for Good: 

How Enlightened Finance Can Can Restore Faith in Capitalism

To purchase John G. Taft's new book, please visit IndieBound.   All proceeds will be donated in equal amounts to the CFA Institute Future of Finance Initiative and to the SIFMA Foundation.
Donate to Us!

Once you have had time to read about what we accomplished in 2014 and what we hope to accomplish in 2015, we hope you will consider making a tax-deductible donation to Capital Institute via our new secure webpage. Your financial support is deeply appreciated.  And many thanks to those who have already so generously donated!


Monthly Quote

"2015 is probably the most important year in the history of humanity since 1945, when we came to the end of the Second World War and the United Nations was formed. And I say that because the meeting in Paris in December this year where we are going to have to decide as a group of 196 nations whether or not we're going to try to manage the issue of climate change is so critical."


- Sir David King, former Chief Scientific Advisor to the governments of Tony Blair 

& Gordon Brown

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