Catalytic leadership is the spark that lights the fire of much bigger changes. It comes from people working well together to bring influence, intelligence, financial resources and/or time to produce big double bottom line returns. By “double bottom line”, I mean investments that have positive returns both socially and financially.
Being a catalytic leader is becoming more popular because more and more people who have a lot of capital are looking at what is happening in the world and facing the same question: what do you want to do to make it better?
How we answer this question is mostly a function of our backgrounds, our objectives and the perspectives we have acquired along the way.
In my case, I grew up in a lower-middle-class family in the U.S., believing it to be a land of opportunity, and fell in love with playing the markets when I was a child. Today, I have been a global macro investor for about 60 years and a philanthropist for about 30.
When considering how to invest my money, I know that I want to have a beneficial impact on people and nature, and that I do not want to overspend on myself and my family.
This background and how I see things also affects how I understand what is now happening in the world and what I want to do about it.
Forces driving global macroeconomic change
My need to study global macroeconomic conditions to succeed as an investor has led me to conclude that we are probably at the start of a very difficult period caused by a classic confluence of five big forces:
- Unsustainable government debt burdens that are threatening the existing monetary order
- Irreconcilable domestic political differences caused by large wealth and values discrepancies, leading to conflicts between the left and the right that are threatening many political orders
- Increasing conflicts between nation states
- Intensifying climate and nature stressors that can be extremely disruptive
- Immense technological changes that bring with them both opportunities and great threats
Yet, at the same time, I see that humanity has never had greater resources, more advanced technologies and/or deeper pools of capital to address our biggest challenges and create a world that is better than ever.
Prioritizing humanity’s collective interests
Whether or not the future is better than the present is not a question of whether humanity has the means to make it so; it is a question of whether people will rise above their self-interests to prioritize humanity’s collective interests by realizing that operating in pursuit of our collective interest is also in their self-interest.
The key to achieving this potential lies in finding win-win relationships that can help address our biggest challenges, recognizing that different people who have different abilities can help in different ways and that collaboration is key to meeting their aims.
Financial contributions of catalytic capital can come from a variety of sources including philanthropists, foundations, family offices, impact investors and even certain institutional investors. Each have the connections and flexibility to initiate initiatives that others may overlook, and are not limited to traditional grant-making.
Catalytic leaders often do what governments and businesses cannot do on their own – accepting early risks and even losses that others will not, de-risking pathways for others, building new markets where none exist, and organizing coalitions of diverse stakeholders around a shared narrative and vision.
Non-financial contributions are often as important, or more important, than financial ones. Some leaders contribute their influence, their intelligence, or their time, while those in government can contribute enablement, and those working in companies can contribute resources from their domains.
How GAEA initiative is driving impact on climate and nature
The World Economic Forum, one of the world’s foremost conveners of people with significant resources to create change, provides a great example of catalytic leadership in action via its Global Accelerator for Earth Action (GAEA) initiative.
GAEA assembles more than 100 of the world’s leading government, business, financial and philanthropic leaders to bring together their passions and abilities to advance climate- and nature-positive solutions.
In my case, I have had a passion for the ocean since watching, as a kid, what Jacques Cousteau did in oceanographic exploration and media. This led me and Dalio Philanthropies to create OceanX, an initiative that conducts ocean exploration and creates media about it to motivate people to love and take care of the ocean.
Through GAEA, we met government, business, financial and philanthropic leaders who were on similar missions to support the oceans, which led to several win-win relationships that have driven meaningful impact.
For example, OceanX worked with the government of Indonesia, and scientists, explorers and oceanographic institutions from Indonesia and other countries to explore and document the marine ecosystems off the west coast of Sumatra.
Their work has significantly contributed to Indonesia designating a 12-million-hectare marine protected area, funded by an approximately IDR 4 trillion ($220 million) investment that is expected to generate around IDR 13 trillion ($720 million) in net economic value through 2045.
OceanX also recently completed a joint US-China young explorers mission in Chinese waters, which enhanced mutual understanding through shared ocean exploration.
These are just two real-life examples of how collaboration between different forms of catalytic leadership have created great double bottom-line investments.
Looking to the future, I hope those with significant resources will contribute some of it catalytically, or at least explore this new approach to making a difference and experience the joy of helping drive beneficial financial and social impact.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.