Is it possible to create a true socially responsible investment portfolio that minimizes the fees we pay? With this question in mind, I created the Organic Couch Potato Portfolio.
The author is hosting special Lunch 'n Learn sessions this week at the Centre for Social Innovation. Join him on Friday, Feb. 10th noon @ CSI Spadina (215 Spadina Ave, 4th floor) and Monday, Feb. 12 noon @ CSI Annex (720 Bathurst, 3rd floor).
Three years ago, I started my company Strategic Sustainable Investments to facilitate the shift of money in a more sustainable direction. Recently, there has been an explosion of interest in my work, and I’ve received an avalanche of requests from friends to help shift their money. It seems more and more people are becoming unhappy with their banks and investment advisors. They feel that their money may be perpetuating the problem, instead of funding a better future. This article is an attempt to simplify the process of shifting 100% of your liquid assets into accounts and funds that help build a sustainable economy.
The latest update of the Green Transition Scoreboard (GTS) was recently released, indicating that the private sector has invested over $2.4 trillion in green companies and technologies since 2007.
As foundations, endowments, and pensions seek out alternative investment strategies to diversify and strengthen their portfolio, many are beginning to align their portfolio with their core values. Unfortunately, many investors don’t know where to start. With over one hundred investment vehicles available to Canadian investors, the following Matrix is an attempt to map out the landscape of investments that achieve both a financial return and a positive social or environmental impact. The Matrix was built by Strategic Sustainable Investments for Community Foundations of Canada in advance of CFC’s day-long workshop with the Canadian Environmental Grantmakers Network and Philanthropic Foundations Canada on May 11th.
We selected asset classes that should be familiar to seasoned investors, with a particular focus on themes that match the missions of many community and private family foundations. We divided the Matrix into two sections: Direct investments in projects or companies from debt finance to private equity; and Market investments in stocks, bonds, and ETFs.
Corporate spending on Research & Development is an informative signal for the direction of the overall economy. R&D strategies and budgets are often laid out in a long-term horizon, so they give a good indication of a company’s heading. When companies in a sector start competing to be the ‘greenest’ company, it spurs rapid innovation. This can lead to advertising campaigns touting environmental benefits that increase consumer awareness, such as Audi’s Superbowl ad.
Since no global research has been conducted on the extent of private corporate “green” R&D, the Green Transition Scoreboard® (GTS) research team is, to our knowledge, the first to compile these figures. Our final total of $163,813,743,000 in investments and commitments to R&D since 2007 is by no means exhaustive, as R&D for green innovation is not always segregated and reported on its own by companies (although more than 1400 companies have produced GRI-compliant sustainability reports). Additionally, limited time for research challenged our team to look for big numbers first, counting commitments above $100 million. There are likely thousands more companies globally who are investing in green R&D that have not been included in this figure. Many do not report such R&D investments for competitive reasons. If you have access to press releases or audited statements for companies we have not listed, please email us.
Lately, Iʼve been working to map and review the impact investment options for groups like Community Foundations of Canada and the Walter & Duncan Gordon Foundation.
Although Iʼve found dozens of amazing investment vehicles that achieve a strong financial return in addition to creating a lasting social and/or environmental impact, greenwashing is one area that sticks out as a problem.