In sustainable finance circles, we spend a lot of time considering ways to invest in nature, or with nature.  More effective stewardship and more complete understanding of the value of nature are certainly vital components of any sustainable investing approach.

What if we also consider investing as nature?  In addition to the material bounty provided by our natural world, we also have access to great stores of wisdom that are embedded in natural organisms and natural systems.  As Janine Benyus, biomimicry pioneer, notes, “we are searching and searching, but we already have a perfectly sustainable world:  the natural world.”  What if our investment processes were rooted in the same principles that make for resilient, regenerative natural systems?

Biomimicry begins with the idea of embracing nature’s wisdom, not harvesting nature’s stuff.  At its heart is a deceptively simple question:  WWND?  What Would Nature Do?  How would nature perform the function I’m trying to perform?  This center point is remarkable in several ways:  first, it starts with a question, with open inquiry.  Biomimicry does not begin with a predetermined endpoint, even when the challenge before us has clear requirements or constraints.  Second, the question is rooted in context:  what would nature do here, in these circumstances?  And finally, it forces us to be precise about purpose and function:  what are we really trying to do, and why?

I came to biomimicry along a winding path, beginning at a low point in my career.  I was struggling through a tough performance patch, as all fund managers do, when luckily I was introduced to the work of Dr. Tom Seeley of Cornell through a meeting of the Santa Fe Institute.  Dr. Seeley’s work investigates how bees make collective decisions that are consistently terrific.  One of the key conditions is that when bees are looking to swarm to a new hive location, the first thing they do is to go out and explore the environment around them.  This simple observation struck me like a lightning bolt.  Here I was, staying later and later at my desk, building more and more convoluted models and spreadsheets, hoping that the answer would come to me through my computer screen.  What I needed, instead, was to be out in the world, assessing my investment decisions in context.

That path of inquiry first led (thankfully) to recovery in my investment performance, then to studies in moral philosophy at Harvard Divinity School, inspiration and mentorship from Janine Benyus and Hazel Henderson, formal training with the Biomimicry 3.8 organization and Dayna Baumeister, and the founding of Honeybee Capital, where our mission is to reconnect investing with the real world.  And now it’s led to writing my first book, The Nature of Investing, which explores the principles of biomimicry and their application to finance in depth.

For example, one of life’s principles is to be energy and resource efficient, and a sub-principle of that concept is to fit form to functions.  I’ve been working recently with some entrepreneurs who are raising early-stage funding, and in almost every case they are presented with a standard set of term sheets and a very limited list of “levers” or choices that they can make.  This process might seem efficient, but it is a shallow efficiency – fast and (relatively) cheap, because it’s standardized.  But the forms offered for investment are missing a deeper sort of effectiveness:  they often do not match the needs or intentions of the entrepreneurs nor of the investors.  The rigidity of form often ends up creating an adversarial position between the company and its investors, though this is one of the most essential partnerships in the success of any new business.  It’s clear that too often, the form for early stage funding does not fit the function, and we trade very short-term efficiency for longer term – and sometimes fatal – inefficiency.  Aligning with natural principles from the very beginning would help to create more of a mutualism between investor and investee, and a healthier ecosystem for both parties.

The time has come for us to refocus on investing in its essential, connected form – to reintegrate investing with the real world, rather than the world on the screen.

Biomimicry provides us with a framework that embodies connection and integration, a model of our natural systems that have proven to be effective, adaptive, and sustainable. The principles of biomimicry, Life’s Principles, are not the newest theories: they are the oldest facts. These concepts describe how the natural world has actually functioned for 3.8 billion years.

Life’s principles give a clear and compelling guide for transforming the investment process from the roots up.  The result is an investment approach that goes “beyond sustainability” to form a system that is inherently resilient and regenerative.  Most importantly, they are the basis of an approach that re-aligns investing with the world it was originally meant to serve.

Instead of efficient, effective.

Instead of rigid, resilient.

Instead of synthetic complexity, elegant simplicity.

Instead of maximized, optimized.

This is the true nature of investing.  

Katherine Collins, Founder and CEO of Honebee Capital and author of The Nature of Investing. Previously Katherine served at Fidelity Management and Research as head of US Equity Research and Portfolio Manager.