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The permaculture phenomenon and ethical investment

Bill Mollison and David Homgren developed the concept of permaculture in the 1970s, with the understanding that working with nature and not against it would achieve a sustainable future.

Permaculture is the conscious design of sustainable and resilient landscapes which mimic the processes and patterns of ecological systems. It is a holistic natural approach which accounts for the natural resources, plant and animal systems, landscape, and structures in the ecological, social and economic contexts, and the close relationships between each of these elements. Above all, it is a system that supports responsible producers rather than dependent consumers.

The permaculture landscape has a mix of perennial plants, avoiding the need to plant annual crops. Every plant is purposefully selected to provide a dependable and generous yield, not merely to satisfy short term requirements but rather to supply our needs in the long run.

Extending this beyond the traditional contexts of fields, veggie patches and gardening techniques, permaculture has developed as a societal system, where the naturalness of ecosystems have been replicated and adopted within households, communities and businesses through their practices, management methods and buildings. Activities pursuing a natural and sustainable approach of living include reducing energy consumption, recycling wastes, and adopting green building designs.

Taking it a step further, the permaculture philosophy has even been adopted in the business of investment, more specifically identified as ethical investment. This is an investment style that rejects the notion that the financial bottom line is the only criterion for measuring investment success. Ethical investment, promoting a triple bottom line, considers environmental, social and economic consequences as part of the investment assessment process.

Australian Ethical Investment is a practitioner of socially responsible investment and is considered a deep green fund manager. This means that positive screening methods (active pursuit of investments that have a positive influence on society) and negative screening methods (avoiding companies involved in harmful activities) are adopted. Australian Ethical avoids any investment which is considered to unnecessarily destroy or waste on-recurring resources, or investments that acquire land or commodities primarily for the purpose of speculative gain. Rather, it seeks out investments that develop and preserve landscapes so as to support human needs in the long run rather than satisfying short term speculation.

In line with permaculture practices, Australian Ethical selects investments in the pursuit of a just and sustainable society and the protection of the natural environment. Rather than investing in companies that simply take from the natural environment without thought of regenerating supply or restoring it back to its natural state, Australian Ethical invests in companies that respect and nurture the environment for continued prosperity. It invests in perennial companies – companies that are sustainable both environmentally and financially, which it believes will bring long-term sustainable returns. Such companies include those that provide for and support renewable energy and energy efficiency, efficient transport, effective waste management, sustainable land use and food production, and preservation of endangered eco-systems.

There is an increasing demand for products that are sustainable, and an increasing demand from investors for assurance that companies in which they invest are doing the right thing by society. As such, there is an increased acknowledgement that unsustainable practices contain financial risks which may be detrimental to the profitability of companies and investor returns. On the other side of the coin, there is a realisation that capital flows are linked to addressing environmental issues.

Permaculture is equally relevant to the investment process as it is to agricultural practices or the veggie patch in the backyard, and socially responsible investment is a significant step towards sustainability through environmentally-conscious selection processes. The adoption of permaculture principles by Australian Ethical is not just limited on an operational level, but is present in all aspects of Australian Ethical’s decisions, in recognition of the role the natural environmental plays in supplying for and ensuring our future.

For more information about ethical investment please visit www.austethical.com.au or call 1800 021 227

By James Thier, Executive Director, Australian Ethical Investment