Climate resilience, healthy population, housing for all, community relationships, political legitimacy, Indigenous sovereignties.
Restoring human’s relationship to nature, providing housing for all, enhancing population health, structuring resilient and circular economies and fostering Indigenous sovereignties are all parts of a collective vision for a more democratic and distributed future.
These desired future assets have value and failing to make strides towards them has a cost, unfairly imposed on future generations. For example, the fact that preventative healthcare accounts for only 5.5% of national health expenditures today, means that Canadian health service stands to lose $68 billion in healthcare costs and $122 billion in productivity losses in the upcoming decades. And the future costs of climate change go well beyond metrics. Our current economic models and financial tools fail to crystalise future risks and price negative externalities. We exist in a world of 3 to 5 year investor and political cycles, making it almost impossible to unlock the longitudinal and intergenerational financing we need in the face of diffused existential threat. This exacerbates a societal tendency to focus on the here and now that prioritizes an exorbitant repair job over a low-cost prevention strategy, whether we are talking about our infrastructure, health or climate. Therefore, even though we are facing an unprecedented scale of mutually reinforcing challenges, from climate change to social inequality, we too often transfer or accept these risks – rather than manage, mitigate and prevent them.
And yet, the potential value of our future civic assets might be the only one worth pursuing today.
How do we structure new economies that are intentional to our future?
Future-oriented financing is about overcoming ‘the culture of the last 5 minutes’, to encourage collective investment in long term risk mitigation strategies that require complex stakeholder arrangements. Thankfully, we are witnessing a rise of mechanisms that better align incentives in order to pursue the risk-management strategies that climate change and other wicked issues demand. Outcomes-based financing initiatives like Social or Environmental Impact Bonds are helping governments and private actors to share risk (unlocking risky private capital today), encouraging evidence-based policy decisions and–importantly–allowing for long-term bipartisan programmes which exist outside of political cycles. Balancing traditional knowledge with current education, Restoring the Sacred Bond Initiative is a holistic program that matches Birth Helpers with Indigenous mothers at risk of losing their infant into the child welfare system. Through the issuance of Social Impact Bonds, the program’s funding is entirely based on its future capacity to reduce interventions from child protection services and to increase the autonomy of the mothers. If the program reaches success, the Manitoba government committed to repay the initial philanthropic investors for the improved social outcomes that result in public sector savings. This outcomes purchasing approach was also used by the Indigenous-led social enterprise Aki Energy and its partners to provide capital for its geothermal installation activities by First Nation community members. Using community-driven outcomes contracts (C-DOCs), this initiative leveraged investment tied to outcomes defined by the communities themselves, rather than the outcome buyer, thus increasing local impact and accountability.