The emerging green economy reflects a growing paradigm shift in how Americans are shopping, banking and investing.
To address this change and what it means, the Sustainable Living Institute of Maui (SLIM) and EdVenture at UH Maui College held a Sustainable Business Pau Hana "Green Business and Investing Locally" event on Thursday, Jan. 26, on the college campus.
Speakers Michael Kramer and James Frazier of Hawai'i's Natural Investments LLC presented opportunities on how to use money as a tool for social justice, community development, corporate reform and ecological sustainability.
They also discussed how to grow the green economy through education, standards, advocacy and investment.
Kramer and Frazier discussed the creation a Hawai'i-recognized Sustainable Business Corporation, investing in Hawai'i's local green economy, making capitalism more compassionate and ecologically wise and helping to alleviate poverty and build community capacity.
Kramer is an accredited investment fiduciary managing partner and director of social research at Natural Investments LLC, which is based on Maui and in Port Townsend, Wash. He has lived on Hawai'i Island since 1999, where he founded the Kona Earth Festival and the Kuleana Green Business Program of the Kona-Kohala Chamber of Commerce in 2005.
Kramer, a 20-year permaculture teacher and teacher trainer, currently serves on the board of the Sustainability Association of Hawai'i and the Hawai'i Alliance for a Local Economy.
Frazier, also employed by Natural Investments LLC, is a local, green and sustainable investing specialist. He is a co-founder of the Local Investing Opportunities Network (LION) of East Jefferson County, Wash..
Outside the financial world, Frazier is involved with sustainable living activities such as permaculture, eco-building, natural medicine, yoga and renewable power systems.
Speaking before an audience of approximately 25, Kramer said he "wants to see, build and buy green programs on all islands--where all stores are health food stores and you have to go to a special store to get junk food."
He urged support for HR 2930, the "Crowd Funding Bill," which is federal legislation before Congress with bipartisan support. The bill would allow individuals to invest up to $10,000 in local businesses seeking no more than $5 million in total investments.
"This is a "very important issue," Kramer said, and one that President Obama mentioned in his State of the Union address.
Kramer said that Hawai'i is one of 10 states to pass legislation (Act 209 in 2011) to support the growth of Sustainable Business Corporations.
Frazier outlined the reasons to invest locally and described the development of the LION he co-founded near Port Townsend.
"The mission of local investing is to create opportunities for local individuals, businesses and local investors to connect and network," Frazier said.
According to Frazier, local investing helps build prosperous local businesses and keeps money invested in the community. It helps build a more resilient and sustainable local economy, helps to create personal connections that build community and it gets money to people who can use it.
At one time, local investing was the normal course of business, with new business owners receiving startup funds from friends and neighbors or the local bank.
Many cities had their own local stock exchanges, including Honolulu. However, with the growth of Wall Street and the New York Stock Exchange, investing became national. Local exchanges could not compete and ultimately closed.
Frazier would like to change that.
In 2006, he co-founded LION in Washington, a network of residents who want to invest their money locally. It is grassroots, independent and 100 percent local.
Since then, LION members have invested over $2.7 million locally--with an average of $137,000 per active investor.
The average local investment deal was $64,000. Thirty-five out of 43 deals were loans and nine were equity. Thirty-seven were small business deals and six were real estate deals.
Single investors did 47 percent of all deals and investor groups did 53 percent. The average interest rate for loans was 5.3 percent and the average duration of loans was 4.6 years.
Frazier's message to the audience was clear and direct. Four elements are necessary to start a LION on Maui:
1. Start with a core group of motivated investors who are committed to expanding their local investing;
2. Agree on basic principles of how to operate;
3. Spread the word to local business owners, community groups and the media;
4. Educate your local small business center, community college and other business educational groups about your group's mission.