A couple of weeks ago, I attended Sustainable Brands 09, a conference that promotes itself as “the preeminent event for discussing the rapid rise of sustainability as a driver for revenue growth and brand equity in the 21st century.”
Over the course of three days in Monterey, Califorinia, C-suite executives, communicators and marketers, non-profit leaders and students engaged in an intense conversation about many interrelated topics:
- what needs to be done to address the significant social and environmental issues facing the planet
- emerging leading corporate commitments and practices
- how organizations are engaging and inspiring their stakeholders around sustainability
While I was pleased to hear about the latest efforts in the world’s largest economy, I was also left with an indelible understanding of how much more work needs to be done if we want to see a global economy that operates within the carrying capacity of the planet.
If there was one consistent theme at SB09, it was collaboration in its many forms: collaboration between firms, collaboration between business and non-profits, collaboration between business and academia, and so on.
One critical team of collaborators that the conference recognized is entrepreneurs, investors, and consumers. If enough mission-based entrepreneurs with good ideas receive the funding they need to propel their businesses, then consumers will have more ways to align their values with their consumption. We’ll move to a restorative economy more quickly. It’s that simple. The problem is that it’s increasingly difficult in these credit-constrained times for businesses to access capital.
SB09 recognized this fact by creating the SB New Venture Exchange. It was a sort of Dragon’s Den, where, in this case, entrepreneurs pitch to a group of green/social investors, executives from leading companies, top sustainability and brand consultants, and peers. In return, they received publicity, advice and exposure for their concept.
While some notoriety through SB09 is nice, what the New Venture Exchange didn’t offer was access to capital. Enter funds like the recently launched Renewal2 Investment Fund, one of the judges at the New Venture Exchange.
Renewal2 is a Vancouver-based social venture fund that offers investors the opportunity to achieve strong financial returns while helping to grow companies at the forefront of social and environmental innovation. Renewal2 will invest in six sectors it believes are essential to building a sustainable society:
- Organic and Natural Foods
- Green Consumer Products
- Green Building
- Social Media
- Social Finance
- Environmental Innovation
The roots of Renewal2 go back 15 years to when two visionaries, Joel Solomon and Carol Newell, assembled a team of advisors and staff in Vancouver to establish the investment and philanthropic sisters, Renewal Partners Company and Endswell Foundation. Their goal was to use all of the tools of business and philanthropy to “shift the culture of business from the dominance of the quarterly bottom line, to one in which the long-term future of the human and natural world is an integral part of financial success.”
To date, Renewal Partners has made more than $7 million worth of equity investments in the sectors that will be funded through Renewal2. You may have heard of a few of them: Stonyfield Farm Yogurt, Seventh Generation, Jantzi Research, Happy Planet Foods, Salt Spring Coffee, and spud.ca. They have also placed an additional $20 million into a range of related areas such as conservation financing, social purpose non-profit real estate and social enterprise business lending.
Until now, the focus of Renewal and Endswell has primarily been in British Columbia. However with Renewal2, Joel and Carol are extending their approach further afield. As their communications materials indicate, “Renewal is expanding its scope to join the exceptional innovators across North America who are reimagining the economy, culture and public policy to meet the demands of the future.” In short, they are acting as a catalyst for an emerging asset class of social venture financing.
Last week, the team at Renewal2 celebrated the first close of their fund. While their goal was to raise an initial $20 million, even during these darkest days of credit and finance, they accumulated $18 million. Their goal is to continue to grow that pool to $30 – 50 million dollars and generate a portfolio of 15 to 20 deals split between the U.S. and Canada.
Importantly, the fund is also living the spirit of collaboration so essential to sustainability. Not content to just use their own influence and capital, the team at Renewal2 is co-investing in appropriate ventures with other values-aligned funds.
So as I follow my daily morning routine of making a cup of Salt Spring Coffee, a smoothie with Stonyfield Farm Yogurt and fruit from spud.ca, and then clean up with Seventh Generation dishwashing soap, I am reminded how critical venture capital is to fostering a conservation economy. As we all come to grips with the fact that the current state of capital markets and the global financial system have not met societal expectations, it’s good to know investors can still invest in positive, community-building and wealth-building alternatives.
