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2003 Review

December 2003. A review of 2003 activities by Tom Butler, executive director. This is the first business review of GRI Equity.

This time of year is naturally quiet. In the northern hemisphere, where most economic activity occurs, winter slows nature down and humanity follows suit. The days are shorter and cooler weather keeps us indoors. We enjoy this season on the farm because plant growth is slowed and we have time to restore some of the order that the rush of summer growth and autumn harvest brought. Planning the coming season's propagation and other activities offers exciting prospects, and we share ideas as people gather for the change of year.

This gardener's approach is also reflected in GRI Equity as businesses slow down and pause, we can reflect on the year passed and plan for the coming one. The last quarter of 2003 saw the launch of GRI Equity and the foundation of increasing business in sustainable investing.

This is the first GRI Equity business report. My intention to build a venture capital business has been influencing decisions since 1986 when I was so positively impressed at a conference in London by speakers like Tony Lorenz. But as some of you know, I have been developing the rationale and systems for sustainable private investment management since 2000. The background work included both development of sustainable investment methods, systems and approach as well as research on the market of investment opportunities. The model was developed among professional acquaintances, predominantly not involved in sustainability. Then in late 2002 as timing ripened and interest started to be shown we began developing a formal offering in 2003.

We had a positive start to 2003. In January UNEPFI's conference in Paris on Financing Sustainable Investment was well attended by many full service multinational banks, large portfolio managers and insurers, including broad participation from the floor. The commitment to the conference was encouraging and the statements and presentations by significant players further supported our findings that the demand and opportunities in sustainable finance are significantly underserved. In particular, a number of portfolio managers were committing to minimum sustainability/SRI standards and large insurers were recognising the gross economic imbalance in climate risk exposure and government health and pension liabilities. The proceedings and participation also highlighted the rapidly evolving understanding of sustainable investing which still eludes many players, but which is critical to their future viability.

January also presented us with a key piece of our business systems: Linux. Since 1998, when news of Linux broke, it became apparent that open-source and cross-platform compatibility are important IT strategy objectives. Also, market dominance by a supplier which dictates IT cost structure and whose value proposition was becoming less attractive. But Linux was for computer engineers ...
But then, near the end of 2002, browsing the web, I surfed across Lindows.com. After a couple of months of experimentation using Lindows, I had migrated to a Linux distribution (SuSE). Now we have proven a Linux desktop solution, with a full suite of application software, a small network and have transferred the legacy data to the new platform. It is cross-platform compatible - we can run all our data in Linux or MS Windows now. And after some months of testing, it appears that viruses are fewer (0?) and stability is very high. (While much editorial of Linux focuses on its advantages in server infrastructure, the attractiveness of the desktop solution are persuasive and provide motivation for Microsoft to change their business, such as their redeployment to developing entertainment offerings.)

The following few months allowed me to refine our strategy and systems, both developing internal operating procedures and IT systems and probing the market. This was interspersed with the normal early season horticultural activities and the launch of accommodation services at Ballin Temple.

In July, as part of the pre-launch research I participated in the World Future Society annual gathering in San Francisco. The WFS is an eclectic group of people interested in predicting trends in many areas of human activity. I was drawn by a seminar on the Global Economy chaired by Hazel Henderson, a leading developer of sustainable economic technology, like the Calvert-Henderson Quality of Life Indicators used by governments as an alternative to normal GDP measures.

This event provided two useful ingredients: An introduction to spiral dynamics which is a management technology famously used to negotiate resolutions in conflict situations, including negotiations that led to the abolition of apartheid in South Africa. And insightful perspective on America, by Americans, which raised serious questions about the sustainability of US economic policy because of market pressures. The current positive sentiment of US stock markets is optimistic, though the fundamental constraints remain.

I also made an R&D trip to Asia in September. I was able to meet with friends and associates, sense the local sentiment, clarify market opportunities and research the drive to sustainability in Asia. I visited a number of businesses and entrepreneurs in Hong kong and Thailand and participated in a BEC conference in Hong Kong on Sustainable Finance and the AIM conference on CSR in Bangkok, both providing a broad perspective on sustainable initiatives in the region. Asia perhaps has the greatest divergence between institutional perspective and market opportunity: advisors note cynically that Asia is only interested in money, but then explain that their customers/consumers are demanding clean products, services, government, cities and so on. Governments are seeking sustainable solutions and export demand requires minimum standards of corporate social responsibility that match American or European standards. We saw exciting opportunities in a range of sectors from leisure to electronics to pollution control which serve both Asian and international markets.

Returning to Europe at the end of the tomato harvest at Ballin Temple presented a critical decision on the impetus for GRI Equity what level of resources to commit in 2004, and an answer more! At Ballin Temple, we are very fortunate to have been able to develop a relationship with an expert horticulturalist to help manage development of our organic garden. In particular we will build biodynamic systems, introduce livestock and accelerate the rejuvenation of this Irish country enterprise. This will allow more resources to be committed to GRI Equity and our partners. This development has moved us to the formal step of launching our business. This has coincided with coverage of GRI Equity by Asia Private Equity Communications .

We are already looking at exciting opportunities which we hope to develop in 2004. We will not be able to participate in all of them, but internal growth and addition of partners in 2004 will expand our coverage. We look forward to making increasing commitments to building sustainable businesses.

I'd like to make a special note of thanks to all who have helped develop GRI Equity. In particular, thanks to Michael and Gert Jan, who supported early development, and friends and advisors, Rhadames, Sujarit, Alan, Pakpoom, Patrick and David, who have contributed to business development. I also appreciate the contributions and support for our patrons who have helped germinate the seed of GRI Equity.

 

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