Your SlideShare is downloading. ×
Dr.BozesanOnIntegralventuresITCConference2013
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Dr.BozesanOnIntegralventuresITCConference2013

338
views

Published on

Published in: Business, Economy & Finance

1 Comment
0 Likes
Statistics
Notes
  • Be the first to like this

No Downloads
Views
Total Views
338
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
8
Comments
1
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. © 2012 AQAL Investing. All rights reserved. 1  1   © 2012 AQAL INVESTING. All rights reserved. ITC  2013,  San  Francisco       Dr.  Mariana  Bozesan   Club  of  Rome  Full  Interna@onal  Member   Senior  Research  Fellow.  Humboldt-­‐Viadrina  School  of  Governance,  Berlin     President  &  Founder,  AQAL  Inves@ng;  Partner,  AQAL  Capital,  Munich   Integral  Venture  Inves@ng   An  Inclusive  and  Sustainable  Model  for   Inves@ng  in  our  Future  
  • 2. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Is  “humanity  is  stupid  enough  not  to  do   what  is  perfectly  doable”  (Dr.  Randers)     to  prevent  ecological  DISASTER?        
  • 3. © 2012 AQAL Investing. All rights reserved. 3   Mariana  Bozesan   • M.S.  Degree  in  Computer  Science  &  AI   – Educated  at  Stanford  University  and  KIT  (Karlsruhe   Ins@tute  of  Technology)  in  Germany   • Ph.D.  in  Psychology,  ITP  Palo  Alto  California   • Club  of  Rome,  full  interna@onal  member   • Serial  Entrepreneur:  founded  5  companies     • Philanthropist:  Suppor@ng  >  38  NGOs  world-­‐wide   • Investor:  18  years  of  high-­‐tech,  bio-­‐tech,  &  clean-­‐ tech  inves@ng  experience   Ø My  MOTTO:  PARITY  OF  PEOPLE,  PLANET,  PROFIT,   with  PASSION,  and  PURPOSE   3  
  • 4. © 2012 AQAL Investing. All rights reserved. 4   Outcomes  Today     1.  What  is  the  global  context  and  the  main   driving  force  today?   2.  What  are  the  current  developments  toward   sustainable  finance  and  economics?   3.  Why  do  we  need  an  Integral  Inves@ng  Model   and  what  could  make  it  successful?   4  
  • 5. © 2012 AQAL Investing. All rights reserved. 5   Outcomes  Today   1.  What  is  the  global  context  and  the  main   driving  force  today?   5  
  • 6. © 2012 AQAL Investing. All rights reserved. 6   The  financial  context   •  The  disaster  of  2007/2008  nearly  ruined  the  global   economic  system   – By  Oct.  2008,  about  $25  trillion  were  obliterated  from  the  value   of  stock  markets   •  What  started  with  an  ini@al  liquidity  crisis  lead  to     – The  disrup@on  of  capital  flows   – The  collapse  of  the  “too  big  to  fail”  financial  organiza@ons  incl.   Lehman  Bros.,  Fannie  Mae,  and  Freddy  Mac   – Severe  downturns  in  the  global  casino/stock  markets  world  wide   – Currency  crunches,  failure  of  major  businesses  ,  global  recession   including  the  European  sovereign-­‐debt  crisis  (Ireland,  Portugal,   Greece,  Spain,  Cyprus,  etc.)     – No  end  in  sight!   – Q:  How  sustainable  are  our  financial  and  economic  systems?  
  • 7. © 2012 AQAL Investing. All rights reserved. 7   The  social  context   •  Real  estate  bubble  bursts,  foreclosures,  evic@ons  (USA,  Spain,   Ireland,  etc.)   •  Prolonged  unemployment  in  most  Western  countries   – 7.6%  USA,  12%  in  Europe  on  average   •  Increased  inequality  in  the  West   – USA  with  the  “most  millionaire  households”  in  the  world  followed   by  Japan,  China,  UK,  and  Germany   •  Growing  health  problems  physically,  mentally,  emo@onally   – Cancer,  overweight,  obesity,  depression,  asthma   •  Social  unrests:     – Occupy  movement,  Spanish  Indignados,  Greek  protest,  Arab   spring   Ø The  worst  social  consequences  since  the  Great  Depression  
  • 8. © 2012 AQAL Investing. All rights reserved. 8   The  environmental  context   • We  con@nue  to  emit  twice  as  much  CO2  in  the   atmosphere  than  can  be  absorbed  by  our  forests   and  oceans  with  disastrous  consequences  for   the  earth’s  ecological  balance:   – Global  warming  at  accelerated  speed  can  lead  up  to   2-­‐4  degrees  Celsius  in  this  century   – Ongoing  droughts   •  Water  is  becoming  more  important  than  petrol     – Ongoing  hurricanes,  floods,  rapid  mel@ng  of  polar  ice   caps  lead  to  the  raise  of  ocean  levels   – Irrecoverable  loss  of  bio  diversity  
  • 9. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. The  quiet  killer  and  driving   force  behind  destruc@on  is   Exponen@al  Growth      
  • 10. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. What  is  Exponen@al  Growth?      
  • 11. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Most  decision  makers  do  not   get  it  un@l  it  is  much  much   much  to  late  to  respond      
  • 12. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. The  sage  and  the  Indian  king      
  • 13. © 2012 AQAL Investing. All rights reserved. 13   The  sage  and  the  Indian  king   •  8  >  1+2+4=7     •  32  >  1+2+4+8+16=31     •  On  each  new  field,  there  are   more  grains  of  rice  than  in  all   previous  fields  together   •  Exponen@al  growth  means  that   each  duplica0on  contains  a   larger  quan@ty  of  things  than  all   previous  quan00es  taken   together   Ø The  last  square  would  contain   9.223.372.036.854.780.000   grains  of  rice  that  would  cover   the  surface  of  today’s  India  with   more  than  1  meter  of  rice  
  • 14. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. The  pond  and  the  water  lilies      
  • 15. © 2012 AQAL Investing. All rights reserved. 15   Exponen@al  popula@on  growth   220.000  people  are  born  per  day  (net)    
  • 16. © 2012 AQAL Investing. All rights reserved. 16   Exponen@al  economic  growth   It  took  Europeans  1000  years,  the  UK  100  yrs.,  Germany  70  yrs.,  Japan  50  yrs.,  China   only  6  yrs  to  double  the  economic  output   China’s  resource  hunger  is  not  only  a  media  event   •  Its  GDP  has  doubled  6  @mes  since  1978   •  Un@l  2017,  China  will  need  more  resources  and  will  produce  more  goods  than  in  its   en@re  history  all  together!!!!!  
  • 17. © 2012 AQAL Investing. All rights reserved. 17   Our  true  problem:  Lack  of  awareness  regarding   the  importance  of  exponen@al  growth   • With  every  duplica@on,  the  quan@ty  added  is   LARGER  than  the  en@re  compounded  previous   quan@ty   • The  megatrends  in  the  21st  century   – Exponen@al  popula@on  growth   – Exponen@al  economic  growth   – Exponen@al  consumer  growth:  in  40  years,  we  added  3   more  Billion  consumers   • We  have  reached  our  physical  Limits  to  Growth  on   our  planet  
  • 18. © 2012 AQAL Investing. All rights reserved. 18   Drama@c  examples  of  exponen@al  growth   • Food  produc@on  and  water  usage     – We  already  have  an  acute  water  shortage  and  not   enough  agricultural  fields  for  food  produc@on   – The  need  for  food  and  potable  water  is  growing  at  2.5  %   p.a.,  which  will  double  in  28  years  from  now   Ø This  means  that  in  28  years  from  now  humanity  will   need  more  water  and  food  than  in  its  en@re   previous  history   Ø By  2035  we  will  need  another  earth  if  no  significant   change  occurs!!!!  
  • 19. © 2012 AQAL Investing. All rights reserved. 19   To  be  expected  by  2052  without  change*   •  World  GDP  will  be  forced  to  slow  down  due  to  resource   deple@on  and  realloca@on   •  World  popula@on  will  be  forced  to  peak  in  2040  at  9  Billion   •  CO2  emissions  will  increase  and  peak  in  2030  with  significant   loss  of  bio  diversity,  massive  environmental  degrada@on  and   severe  climate  change   •  Global  temperature  will  pass  the  dangerous  threshold  of  +2   degrees  Celsius  with  terrible  climate  crisis  auer  2052   •  Increasing  polariza@on  economically,  socially,  and   environmentally  accompanied  with  massive  genera@on  conflict     •  Capitalism  and  slow  democracy  as  we  know  them  will  not  come   to  an  end  due  to  poli0cal  incompetence  and  short-­‐sightedness   •  Investment  share  of  GDP  will  be  forced  to  increase  due  to   capital  deployment  toward  addressing  crises  AFTER  they  occur   Source:  Club  of  Rome  member  Prof.  Randers,  J.  (2012).  2052:  A  global  forecast  for  the  next  40  years.  White  River  Junc@on,  NJ:  Chelsea  Green    
  • 20. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. “Humanity  is  stupid  enough  not   to  do  what  is  perfectly  doable”   to  prevent  disaster,  Prof.  Randers        
  • 21. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. There  is  plenty  of  capital   available  to  solve  our  problems      
  • 22. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. We  need  global  convic@on  and  poli@cal   unifica@on  to  transi@on  to  a  low   carbon  economy  and  into  the  solar  age      
  • 23. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Why  I  am  an  op@mis@c   investor?      
  • 24. © 2012 AQAL Investing. All rights reserved. 24   Outcomes  Today   1.  What  is  the  global  context  and  the  main   driving  force  for  growth  today?   2.  What  are  the  current  developments  toward   sustainable  finance  and  economics?   3.  Why  do  we  need  an  Integral  Inves@ng  Model   and  what  could  make  it  successful?   24  
  • 25. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 25   Self  organizing  ini@a@ves   •  AVIVA  Corporate  Sustainability  Coali@on  ($2  trillion)     – Request  to  UN  member  states  to  adhere  and  develop   regula@ons  for  global  framework  on  corporate  sustainability   repor@ng   – Intl.  policy  framework  for  company  disclosure,  transparency,   accountability,  responsibility,  incen@ves   •  Natural  Capital  Declara@on   – Commitment  of  the  financial  sector  toward  the  integra@on  of   natural  capital  (earth’s  assets  &  ecosystem  services)  criteria  into   financial  products  and  services   •  Interna@onal  Integrated  Repor@ng  Commivee  (IIRC)   •  Interna@onal  Stock  Exchange  Ini@a@ve:  43%  adop@on   •  The  Giving  Pledge,  GIIN,  incl.  self-­‐organizing  family  offices,   TONIIC,  PYMWYMIC,  AQAL  Inves@ng,  etc.   Market  drivers  
  • 26. © 2012 AQAL Investing. All rights reserved. 26   Global  Alliance  for  Banking  on  Values  Report*   •  Elimina@ng  the  myth   about  lower  returns   through   sustainability   •  Bever  returns  on   assets  than  regular   banks   •  Significantly  higher   levels  of  growth  in   loans  and  deposits   •  Higher  and  bever   quality  capital     GSIFI=Global  Systemically   Important  Financial  Ins@tu@ons     *Source:  GABV.  (2012,  March).  Global  alliance  for  banking  on  values:  Strong,  straight  forward,  and  sustainable  banking.  Financial  capital  and   impact  metrics  of  value  based  banking.  Full  report.  March  2012.  Downloaded  May  15,  2013  from  hvp://www.gabv.org/wp-­‐content/uploads/Full-­‐ Report-­‐GABV-­‐v9d.pdf    
  • 27. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. We  can  only  achieve  what  we   measure      
  • 28. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. We  currently  measure  profit   only      
  • 29. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Profit  only  –     Ouen  missing  the  opportuni@es   hidden  in  people,  planet,  and  joy    
  • 30. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. The  current  neo-­‐classical   economic  model:  150  years  old   and  needs  to  be  recalibrated      
  • 31. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Modern  socie@es  have  evolved   to  pluralis@c  levels      
  • 32. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Financing,  business  structures,     and  economics     must  follow  suit      
  • 33. © 2012 AQAL Investing. All rights reserved. 33   The  tradi@onal  inves@ng  model  is  outdated       33   Market  drivers   •  Focused  on  short-­‐term  profit  maximiza@on  at  the  expense  of  long-­‐ term  health  of  global  community,  culture,  environment,  ethics,  and   overall  human  happiness   •  Rely  on  extremely  complex  supply  chain  that  encourages     specula@ve  trading  and  become  increasingly  remote  from  the   needs  of  primary  beneficiaries   •  Are  locking  the  agents  into  lifestyle  dependent  on  high  earnings   and  can  lead  to  inappropriate  risk  taking  and  short  financial  return   to  maintain  reward  levels   •  Does  not  encourage  sustainable  results  due  to  its  incen@ve  and   remunera@on  structures   •  Lack  robust  measurement  criteria  to  measure  non-­‐financial  data   (environmental,  social,  governance,  happiness,  etc.)   •  Tradi@onal  asset  managers  failed  to  develop  a  core  competency  in   alterna@ve  inves@ng  opportuni@es  including  impact  inves@ng  (SRI/ RI/ESG)   •  The  tradi@onal  Venture  Capital  model  is  “broken”*   Profit   TRADITIONAL   INVESTING   Profit  Metrics   WALL  STREET   BERKSHIRE-­‐ HATHAWAY   KLEINER  PERKINS   SEQUOIA  CAPITAL           *Source:  Mulcahy,  D.  &  Weeks,  B.  &  Bradley,  H.  S.,  (2012,  May).  We  have  met  the  enemy  ….  And  he  is  us:  Lessons  learned  from  twenty  years       of  the  Kauffman  FoundaHon’s  investments  in  venture  capital  funds  and  the  triumph  of  hope  over  experience.  Kauffman  Founda@on  Research      
  • 34. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. >=  10%  of  High  Net-­‐Worth   Individuals  want  to  invest  with   their  values,  but  cannot      
  • 35. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Why?  
  • 36. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Because  innova@ve  financial,   economics,  and  business   infrastructures  are  missing    
  • 37. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Impact  Inves@ng  is  growing  but  is   fragmented    
  • 38. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 38   Impact  Inves@ng  is  growing  but  is   fragmented   Two  types  of  Investors*   •  Financial  (Profit)  First  Investors     – Pursue  the  op@miza@on  of  financial   returns  before  having  an  impact  floor     – Investors  “are  not  willing  to  accept   lower  than  market  returns  as  a  cost  to   op@mizing  social  or  environmental   goods,  although  they  s@ll  make  a   posi@ve  impact”     •  Impact  (People/Planet)  First  Investors     – Seek  to  op@mize  social  and   environmental  impact  with  a  financial   floor   – For  greater  impact,  investors  are  willing   to  accept  lower  than  market  financial   returns.     IMPACT     INVESTING   Sustainability  Metrics:   ESG   Triple  BoOom  Line     Profit   People   Planet   e.g.   GRAMEEN  BANK   TRIODOS  BANK   GLS  BANK   BANK  SARASIN         Market  drivers   *Defini@on  auer  (Eurosif,  2010,  p.  7)  
  • 39. © 2012 AQAL Investing. All rights reserved. 39   Slow  transforma@on  example   Impact  Inves@ng  in  Europe  in  2009   *Source:  EUROSIF  SRI  Survey  2010     Market  drivers   13   23   33   89   242   242   306   312   396   411   1,043   1,851   Germany   Switzerland   Spain   Finland   Belgium   Denmark   Sweden   Italy   The  Netherlands   Norway   UK   France   0   200   400   600   800   1,000   1,200   1,400   1,600   1,800   2,000   European  Impact  Inves@ng  Assets  in  2009  in  Billion  Euros     (Source:  Eurosif  SRI  Survey  2010)    
  • 40. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 40  
  • 41. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 41   Global  Sustainable  Inves@ng  (SRI/RI)  is  growing*   •  Global  Sustainable  Investments   using  some  kind  of  ESG  criteria   reached  US$  13.6  trillion  (=21.8   %  of  total  AUM  in  2012)  with   –  Most  common  strategy  being   Nega@ve/exclusionary  screening,   US$  8.3  trillion  AuM   –  Norm-­‐based  screening,  US$  3.0   trillion  AUM  mostly  Europe  (65%  of   known  SRI  AuM)   –  Posi@ve/best-­‐in-­‐class  screening  1.0   trillion  AuM,  mostly  US   –  Assets  u@lizing  ESG  integra@on  are   at  US$  6.2  trillion   Market  drivers   *Source:  The  Global  Sustainable  Investment  Alliance  (GSIA)   Report  2012,  hvp://gsiareview2012.gsi-­‐alliance.org     •  Impact  Inves@ng  theme   investments  are  s@ll   fragmented  and   –  Compara@vely  small  at  US$   89.0  billion   •  Sustainability  theme   investments   –  Are  also  compara@vely  small   at  USD  83.0  billion        
  • 42. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. The  integra@on  between   Tradi@onal  Inves@ng  and   Impact  Inves@ng  is  missing  
  • 43. © 2012 AQAL Investing. All rights reserved. 43  
  • 44. © 2012 AQAL Investing. All rights reserved. 44   Outcomes  Today   1.  What  is  the  global  context  and  the  main   driving  force  for  growth  today?   2.  What  are  the  current  developments  toward   sustainable  finance  and  economics?   3.  Why  do  we  need  an  Integral  Inves@ng  Model   and  what  could  make  it  successful?   44  
  • 45. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Integral  Inves@ng  could   provide  the  necessary   integra@on  
  • 46. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. Integral  Inves@ng  is      an  investment  model  based  on   human  evolu@on  
  • 47. © 2012 AQAL Investing. All rights reserved. 47       Leveraging  human  consciousness  at  later   stages  of  development   RATIONAL   INTELLIGENCE     THE     TRUE   -­‐  SCIENCE  -­‐   ENLIGHTENMENT   ERA   DEMOCRACY   NATION  STATES   MODERN  MEDICINE   SPACE  SHUTTLE     CIVIL  RIGHTS  &   GREEN  MOVEMENT   FEMINISM   SOCIAL  BUSINESS   CULTURAL   CREATIVES:  25-­‐30%   EMOTIONAL   ART,  VALUES,  MORALS,   ETHICS     THE     BEAUTIFUL   -­‐  ART  -­‐   Strategy   INTEGRALLY  ACTING  HUMANS   INTEGRATING  HUMANITY’S  VALUE  SPHERES   “DeMedici  Effect”  in  the  21st  century   THE   BEAUTIFUL   -­‐  ART  -­‐   THE     GOOD   -­‐  MORALS  -­‐     THE     TRUE     -­‐  SCIENCE  -­‐  
  • 48. © 2012 AQAL Investing. All rights reserved. 48   Integral  Metrics   Planet   People   Profit   Ethics,  Ego,   Emo0ons  &     Consciousness   Behavior   Exterior  Interior   Individual  Collec@ve   Culture   &   Morals   INTEGRAL  INVESTING   Genera@on  Investment  Management   AQAL  Inves@ng,  Natural  Inves@ng   Integra@ng  tradi@onal  and  impact  inves@ng   Profit   TRADITIONAL   INVESTING   Profit  Metrics   WALL  STREET   GOLDMAN  SACHS   JP  MORGAN   LEHMAN  BROTHERS   KLEINER  PERKINS   SEQUOIA  CAPITAL           IMPACT     INVESTING   Profit   People   Planet   Sustainability  Metrics   ESG,  IRIS,  SAM   Triple  BoOom  Line     Grameen  Bank   Triodos  Bank   GLS   Sarasin         AQAL  INVESTING  is  based  on  Ken  Wilber’s  Integral  Model;  Ken  Wilber  is  endorsed  by  Nobel  Prize  laureate  Al  Gore,  and  Bill    &  Hilary  Clinton.   Wilber’s  theory  is  widely  applied  in  science,  poli@cs,  economics,  educa@on,  medicine,  and  business  including  McKinsey  and  Company;   Source:  Wilber,  K.  (2000).  A  theory  of  everything:  An  integral  vision  for  business,  poliHcs,  science,  and  spirituality.  Boston:  Shambhala.     Strategy  
  • 49. © 2012 AQAL Investing. All rights reserved. 49   Exterior  Interior   PLANET   PEOPLE   PROFIT   ETHICS     EGO   EMOTIONS   CONSCIOUSNESS   BEHAVIOR  Individual  Collec@ve   CULTURE &   MORALS   INTEGRAL  CAPITAL   HETEROGENOUS  CAPITAL   Genera@on,  Capital  Missions  Company,  AQAL   Inves@ng,  Natural  Inves@ng   Integra@ng  capital   regular  -­‐  government  -­‐  philanthropic  -­‐  dona@ons   PROFIT   TRADITIONAL   CAPITAL   Debt  &  Equity   WALL  STREET   GOLDMAN  SACHS   JP  MORGAN   KLEINER  PERKINS       PHILANTHROPIC   CAPITAL   Dona@ons   PEOPLE     PLANET   BERTELSMANN   ROCKEFELLER   FOUNDATIONS         Strategy   GOVERNMENT  CAPITAL                                                                                                                                                          Debt,  Equity,  Grants         PUBLIC-­‐PRIVATE  PARTNERSHIPS   German  Kreditanstalt  für  Wiederau{au  (KfW),  European  Investment  Fund  (EIF),  USAID    
  • 50. © 2012 AQAL Investing. All rights reserved. 50   SOCIAL   ENVIRONMENTAL   PROFIT   ETHICS     EGO   EMOTIONS   CONSCIOUSNESS   BEHAVIOR   Exterior  Interior   Individual  Collec@ve   CULTURE &   MORALS   PROFIT   TRADITIONAL   BUSINESS   SOCIAL   BUSINESS   INTEGRALLY  ACTING   BUSINESSES   DM,  Puma,  Whole  Foods,   Patagonia,  REI       Superior  deal  flow  and     integral  metrics  for  business  integraliza@on   SOCIAL     ENVIRONMENTAL   ENRON   WALL  STREET   BP   MONSANTO   PHILLIP  MORRIS   GILLETTE   McKinsey  &  Co.           GRAMEEN  BANK   LGT  VENTURE   PHILANTHROPY   UBS  GLOBAL   PHILANTHROPY   SKOLL  GLOBAL   THREATS  FUND         Strategy  
  • 51. © 2012 AQAL INVESTING. All rights reserved.© 2012 AQAL INVESTING. All rights reserved. What  is  the  evidence  that  it  works?  
  • 52. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 52     e.g.  Whole  Foods:     +40%   Higher  ROI  than  FoEs   over  10  years   (1800%  shareholder   value  1995–2006)     Sample:  8.0x   higher  ROI  than  market   average  (S&P  500)  over   10  years;  and  -­‐         3.1x   higher    than  GGCs   3.0x    higher  ROI  than   market  average     (S&P  500)  over     15  years   GOOD  TO  GREAT  COMPANIES   (“GGC”s)  -­‐  2002   • Nucor;  Kimberly-­‐Clark   • Kroger;  Walgreens   • Wells  Fargo;  Gilleve   ESG  &  INTEGRALLY   ACTING  BUSINESSES   • The  Container  Store;  REI   • Whole  Foods;  Trader               Joe’s;  Patagonia;  DM   • Stoneyfield  Farms   FIRMS  OF  ENDEARMENT                     (“FoE”s)  -­‐  2007   • Patagonia;  Amazon   • Southwest  Airlines   • IKEA;  BMW;  eBay   • Google;  AVEDA     *Source:  Sisodia,  R.,  Sheth,  J.,  Wolfe,  D.B.  (2007).  New  Jersey:  Wharton  School,  p.  16       Sample  evidence:  Risk  reduc@on  &  inclusive  sustainability       already  visible  with  ESG  &  integrally  ac@ng  companies   Sample  Evidence   Results  of  the  ongoing  ShiS  to  Conscious  Capitalism  
  • 53. © 2012 AQAL Investing. All rights reserved. 53   Evidence:  Investment  return  in  detail*       15  Year   10  Year   5  Year   3  Year       Cumula0ve   Annualized   Cumula0ve   Annualized   Cumula0ve   Annualized   Cumula0ve   Annualized   FOE  Return   1646.1%   21.0%   254.4%   13.5%   56.4%   9.4%   77.4%   21.1%   GTG  Return   177.5%   7.0%   14.0%   1.3%   -­‐35.6%   -­‐8.4%   -­‐23.2%   -­‐8.4%   S&P  500  Return   157.0%   6.5%   30.7%   2.7%   15.6%   2.9%   10.3%   3.3%   *Source:  Mackey,  J.,  &  Sisodia,  R.,  (2013)  Conscious  Capitalism:  Libera@ng  the  heroic  spirit  of  business.  Boston:  Harvard  Business   Press  Review.    Slide  was  downloaded  from  hvp://www.slideshare.net/s2kapoor/foe-­‐updated-­‐financial-­‐performance    on  Jan  8,  2012   Evidence   Note:  Company  returns  are  total  returns  with  dividends   reinvested  and  compounded*   FoE:  Firms  of  Endearment   GtG:  Good  to  Great   S&P:  Standard  and  Poor’s  index  of  five  hundred  U.S.   companies  
  • 54. © 2012 AQAL Investing. All rights reserved. 54   TARGET  FINANCIAL  RETURN   TARGET  SOCIAL,  ENVIRONMENTAL,  ETHICAL,  CULTURAL,  &  HAPPINESS  IMPACT   PROFIT  FLOOR   IMPACT  FLOOR   FINANCIAL  FIRST   INVESTORS   Op@mize  financial   returns  with  an   impact  floor   IMPACT  FIRST   INVESTORS   Op@mize  social  and   environmental  impact   with  a  financial  floor   Philanthropy   Making  Money   INTEGRAL  INVESTING   Risk-­‐adjusted  op@mal   financial  return  and   premium  impact  returns   Op@mal  financial  and  op@mal  impact  returns   Strategy  
  • 55. © 2012 AQAL Investing. All rights reserved. 55   Integral  Metrics   Planet   People   Profit   Ethics,  Ego,   Emo0ons  &     Consciousness   Behavior   Exterior  Interior   Individual  Collec@ve   Culture   &   Morals   INTEGRAL  INVESTING   Genera@on  Investment  Management   AQAL  Inves@ng,  Natural  Inves@ng   Why  Integral  Inves@ng?   Profit   TRADITIONAL   INVESTING   Profit  Metrics   WALL  STREET   GOLDMAN  SACHS   JP  MORGAN   LEHMAN  BROTHERS   KLEINER  PERKINS   SEQUOIA  CAPITAL           IMPACT     INVESTING   Profit   People   Planet   Sustainability  Metrics   ESG,  IRIS,  SAM   Triple  BoOom  Line     Grameen  Bank   Triodos  Bank   GLS   Sarasin         AQAL  INVESTING  is  based  on  Ken  Wilber’s  Integral  Model;  Ken  Wilber  is  endorsed  by  Nobel  Prize  laureate  Al  Gore,  and  Bill    &  Hilary  Clinton.   Wilber’s  theory  is  widely  applied  in  science,  poli@cs,  economics,  educa@on,  medicine,  and  business  including  McKinsey  and  Company;   Source:  Wilber,  K.  (2000).  A  theory  of  everything:  An  integral  vision  for  business,  poliHcs,  science,  and  spirituality.  Boston:  Shambhala.     Ques@on  
  • 56. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential We  can  only  achieve  what  we   measure      
  • 57. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential We  now  measure  profit  only    
  • 58. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential Impact  Inves@ng,  SRI,  RI,  etc.   are  trying  to  add  ESG  criteria      
  • 59. © 2012 AQAL Investing. All rights reserved. 59   Environmental  Social  Governance  Metrics   Environmental  Criteria   •  Climate  change,     water  scarcity   •  Local  environmental   pollu@on  and  waste   management   •  New  regula@ons   beyond  environmental   product  liability     •  New  markets  for   environmentally-­‐ friendly  products     and  services   Governance  Criteria   •  Board  structure  and   accountability   •  Accoun@ng  and   disclosure  prac@ces,   transparency     •  Execu@ve   compensa@on     •  Management  of   corrup@on  and     bribery  issues   Social  Criteria   •  Workplace  health     and  safety     •  Knowledge  and  human   capital  management   •  Labor  and  human   rights  issues  within   companies  and  their   supply  chains   •  Government  and   community  rela@ons         Source:  The  Monitor  Ins@tute.  (2009),  Inves@ng  for  Social  &  Environmental  Impact,  hvp:// www.globalimpac@nves@ngnetwork.org/binary-­‐data/RESOURCE/download_file/000/000/6-­‐1.pdf   ESG  Metrics  
  • 60. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential What  is  missing?      
  • 61. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential We  know  what  to  do  but     do  not  do  what  we  know?      
  • 62. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential How  can  Integral  Theory   contribute?        
  • 63. © 2012 AQAL Investing. All rights reserved. 63   An  invita@on  to  contribute  significantly   1.  Which  major  players  must  get  involved?   2.  Which  irresis@ble  ideas  would  inspire  them  to   act  now?   3.  Which  measurement  criteria  would  ensure   integral  success?   4.  How  would  we  know  that  we  are  on  the  right   track?  
  • 64. © 2012 AQAL Investing. All rights reserved. 64   Summary   1.  What  is  the  global  context  and  the  main   driving  force  today?   2.  What  are  the  current  developments  toward   sustainable  finance  and  economics?   3.  Why  do  we  need  an  Integral  Inves@ng  Model   and  what  could  make  it  successful?   64  
  • 65. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential The  only  crisis  we  have  today  is  one  of   consciousness  
  • 66. © 2013 AQAL Capital. Strictly Confidential. For qualified investors only. 66   © 2012 Integral INVESTING. All rights reserved. WE WILL CATCH THE BOAT!  
  • 67. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential Thank  you!  
  • 68. © 2012 Integral INVESTING. All rights reserved.© 2013 AQAL Capital. Strictly Confidential Appendix  
  • 69. © 2012 Integral INVESTING. All rights reserved. • Integral  Audit—Bozesan   • Moral  development  –  Carol  Gilligan   • Ego  Development—Cook-­‐Greuter   • The  Leadership  Circle  Profile—Anderson   • Emo@onal  Intelligence—Dan  Goleman   • PeopleScan—Clare  Graves   SELF  &  CONSCIOUSNESS  Metrics   CULTURAL  Metrics   • Integral  Audit—Bozesan   • Moral  development  –  Carol  Gilligan   • Leadership  Development  Profile—Cook-­‐ Greuter  &  Torbert  Ac@on  Logic   • Presencing  —  Ovo  Scharmer   • The  Leadership  Circle  Profile—Anderson   BEHAVIORAL  Metrics   Financial,  ESG  Metrics  PLUS   Developing  Integral  Metrics   Fins.,  ESG,  Behavior,  Culture,  Consciousness   Source:  Sisodia,  R.,  Sheth,  J.,  Wolfe,  D.  B.,  (2007),  Firms  of  Endearment,  Upper  Saddle  River,  NJ:  Wharton  School.;  Pauchant,  T.  C.  (Ed.).  (2002).   Ethics  and  spirituality  at  work:  Hopes  and  piWalls  of  the  search  for  meaning  in  organizaHons.  Westport,  CT:  Quorum  Books.   Source:Rooke,  D.,  &  Torbert,  W.  (1998).  Organiza@onal  transforma@on  as  a  func@on  of  CEOs'  developmental  stage.  Organiza@onal   Development  Journal,  16(1),  11-­‐28;  Rooke,  D.,  &  Torbert,  W.  (2005,  April).  Seven  transforma@ons  of  leadership.  Harvard  Business  Review   OnPoint  Ar@cle,  1-­‐11.  Reprint  No.  R0504D.      Senge,  P.,  Scharmer,  C.  O.,  Jaworski,  J.,  &  Flowers,  B.  S.  (2005).  Presence:  An  exploraHon  of  profound  change  in  people,  organizaHons,  and  society.   New  York:  Currency  Doubleday.       • FoE  Analysis—Sisodia,  Sheth,  Wolfe   • PeopleScan—Clare  Graves   • The  Leadership  Circle  Profile—Anderson     • Integrated  Repor@ng,  PRI,  GIIRS,  GRI   • Integral  Sustainability  Indicators/Metrics     • The  Leadership  Circle  Profile—Anderson   Integral  Metrics  
  • 70. © 2012 AQAL Investing. All rights reserved. 70   Research  on  Private  Equity  Investors   • 132  investors     – 50%  men  –  50%  women   • Global  investors  from  USA,  Canada,  Germany,   China,  India,  France,  Thailand,  Bali,  Singapore,   Turkey,  Dubai,  Ireland,  Switzerland,     • Aggregated  investment  capital:  $1.39B  
  • 71. © 2012 AQAL Investing. All rights reserved. 71    HNWI  Seeking  Self-­‐Actualiza@on  
  • 72. © 2012 AQAL Investing. All rights reserved. 72      The  Hero’s  Journey:  Research  results   72  Copyright  2010    |       • 132  private  equity  Investors  &  top  execu@ves   –   presidents,  serial  entrepreneurs  &  Venture  Capitalists   • High-­‐tech,  clean-­‐tech,  music,  beverage,  health   care,  Wall  street  financiers,  lawyers,  music   • Ac@ve  philanthropists  and  social  entrepreneurs   • Stanford,  MIT,  Harvard,  Sorbonne,  etc.  graduates   – 15  doctorate  degrees,  60  MBAs,  other  Master’s   degrees.    
  • 73. © 2012 AQAL Investing. All rights reserved. 73      The  Hero’s  Journey:  1.  AWAKENING   73  Copyright  2010    |       Physical  degrada@on,  back  pain,  overweight,  regular   colds,  heart  problems,  food  allergies,  injuries,   mul@ple  sclerosis  
  • 74. © 2012 AQAL Investing. All rights reserved. 74      The  Hero’s  Journey:  Emo@onal  Pain   74  Copyright  2010    |       “horrible  divorce,”  death  of  “mother”  or  “wife,”  “high-­‐ degree  anxiety,”  “worry  and  fear,”  “heartbreak,”   tension  between  “fear  and  desire,”  “grief,”  the  “need”   to  be  accepted  by  the  outside  world,  “frustra@on,”  “lack   of  trust,”  “lack  of  joy,”  “deep  sadness,”  “lack  of   alignment,”  “lack  of  fulfillment,”  “completely  unhappy”  
  • 75. © 2012 AQAL Investing. All rights reserved. 75  75   Refusal  to  follow  the  call   • CONTROLLING  PEOPLE  AND  OUTCOMES   – “Bouncing  off  the  walls  and  just  being  a  control  freak”   – "I  was  never  available.  I  was  always  in  control"     – “I  tend  to  be  a  bit  of  a  control  freak”   • DID  NOT  ALLOW  FEELINGS:   – “Not  allowing  myself  to  feel  the  sadness  and  the  grief,”   ”Closed  down  my  heart,”  “Wearing  coat  of  armor,”  “No   one  would  ever  get  close  to  me  again"   • ADDRESSING  SYMPTOMS  ONLY  INCREASED  PAIN  
  • 76. © 2012 AQAL Investing. All rights reserved. 76      The  Hero’s  Journey:  The  Tipping  Point   76  Copyright  2010    |       • TERRIBLE  EMOTIONAL  PAIN  LEAD  TO  THE  COURAGE   TO  FACE  OWN  SHADOW  USING  TEACHERS   – “Got  fed  up  with  fear”   – Decision  to  experience  the  “dark  night  of  the  soul”     – Asking  essen@al  life  ques@ons    
  • 77. © 2012 AQAL Investing. All rights reserved. 77  77   No@ced  lack  of  meaning  and  fulfillment   – “I  wasn't  manifes@ng  why  I  was  here”     – “I  was  following  a  script  that  wasn’t  authored  by  me”   – “while  there  were  fun  things  like  building  new  markets   and  I  really  enjoy  business,  there  was  this  sort  of  almost   mind  numbingly  impossible  monotony  around  the   trajectory  that  I  was  on”   – “I  had  enough  intellectual  understanding  that  the  gold   rings  were  running  out”   – “there’s  fewer  jobs  leu”  in  the  world   – “There  was  a  growing,  gnawing,  unfulfillment  of   maximizing  shareholder  value”  
  • 78. © 2012 AQAL Investing. All rights reserved. 78   The  Hero’s  Journey:  2.  INITIATION   78  Copyright  2010    |       • EXCEPTIONAL  HUMAN  EXPERIENCES  (EHE)   – Unity  Consciousness  Experience   – Clairaudience,  Clairvoyance   – Out  of  Body  Experience,  Ancestor  encounters   – Appari@ons,  Mind  reading  
  • 79. © 2012 AQAL Investing. All rights reserved. 79  79   Unity  Consciousness  Experiences   •  “Lightning  bolt  [that]  moved  through  my  body,”     •  “Out-­‐of-­‐body  experience  …  that  really  showed  me  very  clearly   that  I  am  not  my  body”   •  “We  proceeded  to  have  a  conversa@on  where  he  read  my  mind   and  responded  so  I  never  opened  my  mouth”   •  “Feeling  [that]  would  be  so  powerfully  strong  that  it  was  almost   to  the  point  where  you  couldn’t  walk”     •  “Mys@cal  experience,”  “divine  light,”  “divine  intelligence,”  the   “heart  was  exploding  with  love,”   •  “My  body  turned  into  an  intense  beam  of  light”   •  “My  heart  opened  and  I  could  feel  every  bird  and  insect  as  part   of  me”   •  NO  FRAMEWORK  TO  UNDERSTAND  EHE   Ø “quantum  leap  in  consciousness.”  
  • 80. © 2012 AQAL Investing. All rights reserved. 80   More  Impact  of  Significant  Experiences   • ASKING  ESSENTIAL  QUESTIONS   – “What  is  the  purpose  of  this?  What  is  it  all  about?   Who  am  I  helping?”  “Who  am  I?”  “Is  this  it?”  “Why   am  I  here?”  “What  is  money,  wealth  and  security  all   about?”     • REMARKED  COLLECTIVE  INSANITY   – “Why  did  I  let  the  mob  psychology  [on  Wall  Street]   tell  me  whether  I  was  having  a  good  day  or  not?”   – “I  had  this  moment  where  I  looked  into  the  future   and  all  I  saw  was  this  endless  stream  of  closing   quarters”  
  • 81. © 2012 AQAL Investing. All rights reserved. 81   The  Hero’s  Journey:  3.  RETURN   81  Copyright  2010    |       “This  [journey  within]  was  like  drinking  out  of  a   fire  hose.  In  this  area,  MIT  and  Stanford  Business   School  were  like  drinking  out  of  a  fire  hose  for   academic  and  business  issues.  This  was  like   drinking  out  of  a  fire  hose  for  emo@onal,  spiritual   and  consciousness  issues.  We  need  both.”  
  • 82. © 2012 AQAL Investing. All rights reserved. 82   Investors’  Value  Shiu