Riding your bike and putting the blue box out every week is one thing. Deciding to lay your retirement investments on the thin green line is quite another matter.
As a publicly ‘out’ green person, I felt it was time to get my investments more in line with my values. What I found was, it’s not as easy as walking down the aisle reading the ingredients on bags of organic granola.
The Generic Options
Every bank and financial institution seems to have a product (or at least an ad campaign) designed to soothe the conscience of the wanna-be green investor, from the obviously-named ‘Ethical Funds’ to more obscurely-branded options like the SUMMA SRI Canadian Fund. The basic layer of screening for these funds usually excludes the usual suspects in the Merchants of Death lineup – weapons, tobacco, nuclear and (for some) alcohol. Beyond that, they can vary greatly in their content, and you might be surprised to learn that some of these funds hold stock in such tree-hugging enterprises as Athabasca Oil Sands Corp and the Potash Corporation of Saskatchewan. Now some of you may be saying, “Hey wait a minute, hippie, there’s nothing wrong with those companies!” And if that’s what you believe, then you would be right. Because in order to invest with your values, you have to define what’s ‘green’ for you. And there is more to green investing than simply what the portfolio holds.
Finding an expert – Meet Tony Edwards
Howe Street isn’t exactly chock-a-block with green investment companies. Through Google, I found Tony Edwards at Portfolio Strategies Securities in the bustling Vancouver Island burg of Courtenay, BC. On his website, Tony says, “When building a socially responsible investment portfolio, I look for companies that don’t cause me to lose sleep at night thinking about dead birds, or slave labour, or nuclear meltdowns.” On that quote alone, I thought it was worth a few kilos of highway carbon and ferry boat emissions to meet him.
We sat in Tony’s small office, on a sunny Friday afternoon, sharing a few cups of herbal tea.
“Companies aren’t ethical, or not,” Tony began, “It’s all in their behaviour. In order to make change happen, you can’t just throw up your hands and divest. You’ve got to have a seat at the table.” He showed me a report from Ethical Funds, (Make Money, Make a Difference.™!) showing how their shareholder activism process had led to positive changes in environmental policy with companies like Suncor and Enbridge. “These discussions happen before the shareholders meeting,” he continued, “Companies are a lot more responsive to their shareholders than they are to protestors.”
In one recently successful example, shareholder activist group As You Sow introduced a shareholder proposal in 2011 asking McDonald’s to consider stronger environmental policies for its beverage containers, such as setting recycled content and post-consumer cup recovery goals. McDonald’s now says they plan to test a new hot cup in 2,000 of its U.S. stores that could replace the polystyrene foam cups currently in use at all locations.
Who are today’s green investors?
“Many Canadians are not that financially literate. They think they can get all of their information from the big banks. Then, for some, something changes.”
“My average customer is an educated woman, or couple, between ages 55 and 65, who are fed up with the same old solutions, have done some research and just want to better align their investments with their values.”
Tony starts with the sort of due diligence and financial fact-finding you would expect of a certified financial planner, but then includes more in-depth discussions around sustainability as well, getting to know each client’s values as well as their overall financial picture.
How do you market the Green Market?
“People don’t want this stuff marketed to them,” Tony says, “They come in pre-disposed to a sustainable investing solution, usually through word-of-mouth. It’s a category that doesn’t seem to appeal to younger investors as much.”
“I’m a positive person, and I like to keep the whole tone positive.” Tony continues, “I sponsor local events like the Music Fest, the Film Festival, and sometimes write articles for the local paper.”
I couldn’t help but think if Tony could combine more of the information from his years of web articles with his positive tone and passion, and get it out there in the rich-media world, he would probably engage a whole network of very interested followers.
The Bottom Line
“People tend to think you can’t make any money in Socially Responsible Investing. That’s just old, in-the-box thinking. Some investments, like clean energy, may be too long-term for the average investor, but there are opportunities.” Turning his monitor toward me, Tony pointed to a stock curve that climbed like an Al Gore temperature chart. “This is a company I’ve been watching that makes denim fabric from flax. They just cut a deal with Levi’s.”
Want to do some research on SRI Funds? Here’s a list.
Want to go deeper? Here’s a link to Tony Edwards’ website and article archive.
Happy green reading!