What Are The Principles Of Ethical Investing In Permaculture?

“I’ve recently started implementing permaculture on my small homestead, focusing on organic farming techniques and self-sufficiency. My long-term goal is to align both my lifestyle and investments with my values, so I’m curious about how ethical investing fits into the broader principles of permaculture. Specifically, how can I ensure that the money I put into the market aligns with permaculture ethics and doesn’t inadvertently contribute to practices that go against my goals? I’d love some guidance on how to apply permaculture principles to my investment choices.” Thanks, Ashley, Bendigo, Australia.

Table of Contents:

• Understanding Permaculture and Ethical Investing
• The 3 Ethics of Permaculture in Investing
  • Earth Care
  • People Care
  • Fair Share
• Balancing Ethical Investing with Financial Returns
• Choosing Ethical Investment Options for a Permaculture Lifestyle
• How to Start Ethical Investing in Permaculture
  • Researching Companies and Funds
  • Diversifying Your Investment Portfolio
  • Measuring Impact
• Common Challenges and How to Overcome Them
• Final Thoughts…

Understanding Permaculture and Ethical Investing

Ashley, you’ve already got your hands dirty in permaculture, so you know it’s all about creating a system that works with nature, rather than against it. Permaculture isn’t just a way of gardening; it’s a mindset, a way of living. Ethical investing, on the other hand, is the financial counterpart to permaculture’s ecological and social ethics. It’s about putting your money in places that align with your values, supporting businesses and causes that reflect the ethics of caring for the earth, caring for people, and sharing abundance.

Just like permaculture seeks to create a positive impact on your land, ethical investing strives to generate positive change in society and the environment through financial choices. The idea here is that you can further your permaculture goals by supporting companies that care about sustainability, social justice, and ethical governance. And, much like in your garden, it’s all about making thoughtful choices that contribute to a long-term vision of sustainability.

Think of it as planting the right seeds in your financial garden. The choices you make today will grow and shape the larger ecosystem of your finances and potentially even the world at large.

The 3 Ethics of Permaculture in Investing

We can’t talk about applying permaculture principles to investing without revisiting the core ethics of permaculture: Earth Care, People Care, and Fair Share. These aren’t just buzzwords to toss around; they’re guiding principles that can shape your investment strategy in meaningful ways.

Earth Care

How It Translates: When thinking about Earth Care in financial terms, you want to focus on investments that prioritize environmental sustainability. This could mean anything from businesses that use renewable energy, to companies committed to reducing waste, to funds that exclude industries like fossil fuels, deforestation, or pollution-heavy industries.

Ashley, here’s a quick story: A couple of years ago, I put a chunk of my savings into a green energy fund. Now, these funds might not be the top-performing ones out there, but I sleep better knowing my money isn’t supporting coal mining or oil drilling. It’s like planting a native tree in your garden versus an invasive species—one contributes to the balance of the ecosystem, while the other might wreak havoc.

People Care

How It Translates: People Care is about investing in companies that treat their employees well, contribute positively to communities, and uphold human rights. Ethical funds or companies often focus on things like fair wages, diversity and inclusion, or ensuring supply chains are free from exploitation.

Look for investment options that promote education, healthcare, and fair labor practices. Think about how your financial choices can uplift communities, rather than just lining the pockets of shareholders.

For instance, I once chose to include a healthcare company in my portfolio because they were offering affordable medical services in underserved areas. It felt good to know my money was helping make healthcare accessible for people who really needed it, much like how permaculture gardens make fresh food available to those who might not have access otherwise.

Fair Share

How It Translates: Fair Share, also known as “Returning the Surplus,” involves ensuring that profits are not just hoarded by a few, but rather redistributed in ways that benefit larger communities and ecosystems. In investing, this could mean supporting businesses that reinvest profits into social or environmental initiatives or opting for funds where part of the returns are donated to causes aligned with your values.

For example, you might choose to put some of your money into Community Investment Funds that support local businesses or social enterprises focused on reducing inequality. It’s like how you might use the surplus of your garden harvest to feed your neighbors or improve your soil health—spreading the bounty, rather than hoarding it.

Balancing Ethical Investing with Financial Returns

Here’s where some folks get tripped up, Ashley. Aligning your investments with your values can feel like a tricky balance because traditional advice says to always chase the highest returns. However, investing ethically doesn’t mean you’re dooming yourself to poor financial returns. It’s more like growing a diverse polyculture garden, where everything works in harmony. Sometimes, that means accepting that certain crops (or investments) might yield slightly less in the short term but offer greater rewards over time.

Long-Term Growth: Investing in ethical funds can offer steady returns, especially when you consider that companies with sustainable practices often perform better in the long term. They’re more resilient to market changes and tend to face fewer regulatory, legal, or reputational risks—sort of like how a well-designed permaculture garden can weather droughts or pests better than a monoculture farm.

Diversification: Just like you’d plant a variety of species to ensure a healthy, productive garden, diversifying your investments across different ethical funds can help manage risk while still aligning with your values. A good mix might include green energy, socially responsible tech companies, and bonds from governments with solid environmental records.

It’s not about putting all your eggs in one basket—or as we say in gardening, all your seeds in one row—but finding a balance where your money does good while still growing.

Choosing Ethical Investment Options for a Permaculture Lifestyle

When it comes to picking where to put your hard-earned money, think of it as deciding which plants to include in your garden. Some might be workhorses that provide reliable yields (like a sturdy apple tree), while others might fix nitrogen in the soil or attract pollinators. The same logic applies to ethical investing. Some options will be better fits for your values and financial goals than others.

• Sustainable Index Funds: These are popular options that track an index of companies performing well on environmental, social, and governance criteria. They’re like a wildflower meadow—a bit of everything, blooming and thriving together.
• Socially Responsible Mutual Funds: These funds actively select companies that meet stringent ethical standards. Look for ones that align best with your personal values, like clean energy, equitable labor practices, or community development.
• Community Investment Funds: These are more local-focused and often offer lower returns, but the money goes directly into projects that build local economies, schools, or environmental projects. Think of them as the community garden version of investing.
• Direct Investment in Green Startups: Feel like being a bit riskier? Consider putting some funds into green startups that align with permaculture principles. These could be companies working on sustainable agriculture, regenerative technologies, or even zero-waste products.

How to Start Ethical Investing in Permaculture

Researching Companies and Funds

The first step, Ashley, is to get a good grasp on what’s out there. Ethical investing is a hot topic these days, so there’s no shortage of options. The key is to do your homework, just like you research the best plants for your climate.

Resources and Tools: There are plenty of tools available that can help you gauge a company’s ethical credentials. Websites that rate companies on their ESG (Environmental, Social, and Governance) factors can give you a clear picture of who’s really walking the talk. You might also want to consider going through annual reports or sustainability audits of the funds or companies that catch your interest.

Align with Personal Values: It’s important to remember that one size does not fit all. Just as some gardens thrive with more shade or water, some investment paths might suit your personal values better than others. Make a list of what aspects of permaculture ethics are most important to you—maybe it’s climate action, or perhaps supporting fair trade—and prioritize those in your search.

Diversifying Your Investment Portfolio

Diversification involves spreading your investment across a variety of sectors and companies to minimize risk, just like how you’d plant different species in your garden to prevent a single pest from wiping out your entire crop.

Balancing Categories: A well-balanced ethical portfolio might include a mix of assets such as equity funds, bonds, and even some alternative investments like community-led projects. Think of it as including both perennials and annuals in your garden for year-round productivity.

Spreading Risk: While it might be tempting to go all-in on renewable energy, it’s essential to remember that industries can be volatile. Just like with gardening, where you can’t control the weather, the market, too, has its unpredictable moments. By diversifying, you’re better insulated against the risk of any one sector underperforming.

Measuring Impact

In permaculture, you often measure success not just by the yield, but by the overall health of the ecosystem you’ve created. Similarly, in ethical investing, the impact isn’t just about returns but also the positive change your money has helped foster.

Impact Reporting: Many ethical funds provide annual impact reports that showcase how their investments are making a difference. This could include metrics like carbon reduction, number of jobs created, or improvements in community welfare. These reports can be like the garden journal of your investments, where you track progress and growth.

Personal Auditing: If you’re going the extra mile, Ashley, consider auditing your portfolio every year to ensure it still aligns with your values and permaculture ethics. Doing so ensures you’re on track while also allowing you to make any necessary adjustments, just as you’d tweak your garden design after a season or two.

Common Challenges and How to Overcome Them

Challenges are part of both gardening and investing—no way around it. But, forewarned is forearmed, as they say. Here are a few common challenges ethical investors face, along with some friendly advice on how to handle them.

• Greenwashing: Just because a company claims to be eco-friendly doesn’t mean they actually are. This is the financial equivalent of buying “organic” seeds that turn out to be anything but. Always dig deeper into a company’s practices before investing.
• Lower Short-Term Returns: Sometimes, ethical investments might not give you the same quick returns as more traditional options. This can be frustrating, much like waiting for a tree to mature before you can enjoy its fruit. Keep your eyes on the long-term benefits.
• Limited Options: Occasionally, it might feel like there just aren’t enough ethical investments to choose from. This situation is the investment version of zoning constraints in urban gardening. It may push you to get creative, like looking into private investments or community bonds.
• Finding Reliable Financial Advisors: Not all financial advisors are well-versed in ethical investing. It’s a bit like talking to a conventional farmer about organic gardening—they might not fully get it. Take time to find an advisor who understands both your financial goals and your ethical principles.

Final Thoughts…

Ashley, you’ve already made tremendous strides toward living a life aligned with permaculture principles. Bringing those same principles into your financial life is just another step in that journey. Just as you care for your plants and soil, care equally for where your money goes—it can grow sustainability, community, and a healthy future.

Thanks for sparking this conversation. Keep nurturing your homestead, and rest easy knowing that each dollar you invest can be cultivating a better world, just like each seed you plant in your garden.