Responsible investing has grown a staggering 68 per cent in Canada over the last two years, according to a new report. But not all ethical retirement savings plans are planet-focused. What's your greenest bet?
Most standard ethical funds screen out nukes, tobacco and weapons makers but still invest in oil and gas or mining. Many use what’s called the “best in sector” approach, going for, say, Suncor over Esso and working from within to pressure companies to up enviro, social and governance performance. NEI along with Meritas and Inhance are the most vocal critics of the status quo (not so if you invest in funds from big banks or companies like Fidelity). Still, you’ll have some money sunk in the oil sands and fracking, and even the World Bank has called on the investment community to divest from oil, gas and coal ASAP. You can often minimize fossil fuel investments by choosing their global or U.S. equity fund options.
AGF’s (Acuity) Clean Environment Funds are said to be the greenest mutual funds Canada’s got. Unlike most ethical funds, their focus is energy and energy efficiency, water/water solutions, pollution control and health and safety. Companies have to “fit the fund’s environmental concept of sustainable development.” A couple of this fund’s holdings are in “greener” oil and gas service providers like Secure Energy Services, which is known for cleaning up oil industry waste, though it also offers drilling and pipeline construction. Their angle is “let’s help oil and gas be as clean as possible,” but what’s coal-plant owning AltaGas doing here? Still, it’s better than Desjardins’ Environment Fund.
Fossil-free mutual funds don’t exist in Canada, though i’m told that will change later this year. In the meantime, you can sink your cash into these U.S.-based exchange-traded funds, but you have to get a broker or one of the certified responsible investors listed at ricanada.ca to set it up for you. Sustainable economist Tim Nash recommends a couple, including PowerShares clean tech portfolio and recycling-heavy Market Vector Environmental Services ETF. FYI, iShares Global Water Index ETF may be fossil-free but gets thumbs-down from Council of Canadians’ Maude Barlow since it sinks cash in dodgy water-privatization corps.
Want to see your money make a real difference in the world? The Mennonite Savings and Credit Union has teamed up with OikoCredit Canada to offer a guaranteed investment that helps lift people out of poverty. For 40 years now, Netherlands-headquartered Oikocredit has been one of the world’s largest private backers of micro-financing institutions, fair trade cooperatives and small and medium-sized businesses in the developing world. You can now support their work by buying 12-month GICs at 1.3 per cent, just a little below what regular GICs offer. It’s less about making big returns than about putting your money where your mouth is and funding global change. No fossil fuel, pharma or mining companies funded here.
What if i told you there was a beautiful way to invest in greening your community and make a nice return? Solarshare’s solar bonds are now rrsp-eligible and totally greenwash-free. Buy a minimum of $1,000 in bonds and you get a 5 per cent fixed rate paid out semi-annually. So far the non-profit co-op behind the bonds has funded over 3.5 million kilowatt hours of clean, community-based solar electricity. But you’ll have to apply ASAP if you want to meet this year’s RRSP deadline (solarbonds.ca). The Centre for Social Innovation also offers feel-good community bonds at 3 to 4.5 per cent that are RRSP-eligible. communitybonds.ca.