Q Are green investments as eco-friendly as they say they are? I hear some invest in nuclear technology.
A Can you hear that? That’s the sound of shuffleboard dreams shimmying inside the heads of millions of Canadians as they jump in on some last-minute retirement savings plan action. I hate to be the bubble burster, but we’ve gotta fess up to the fact that most of those Freedom 55 visions are built on the backs of oil-smothered seabirds and scarred-up landscapes.
That’s where conscious funds come into play. Over $65.5 billion goes into socially responsible investing (SRI) in Canada each year. Even bankers think it’s no longer crunchy granola to worry about the planet’s future. More and more investors are fretting that global warming might eventually sink corporate profits, and companies that can’t spell out plans for weathering the coming climate chaos are finally looking like the risky investments they are.
Hell, why do you think insurance companies were among the first to start freaking out about climate change?
But just how a company gets the green thumbs-up from a social investment fund definitely varies. And what’s conscience-soothing to another might keep you up at night.
For instance, you’ll find plenty of petroleum-happy companies (like Suncor, Shell and BP) on eco investment lists. Okay, so they may be greener than climate-naysaying Esso (doesn’t take much, really) and have directed cash to cleaner tech, but they’re still making their big bucks off petroleum – and that’s enough to turn many a treehugger’s stomach.
Portfolios like these have kicked up a storm of controversy in the UK, where a new report came out this month revealing that ethical funds have very little invested in truly green companies.
Still, proponents of these funds will argue they play an important role in flexing buying power to reward good corporate behaviour by investing in funds that commit to making green or labour rights progress. They say without these investments, ethical mutual funds might tank.
But while you might decide you’re willing to bend on BP or supporting natural gas suppliers (because we’re not given much choice really – 99% of green mutual funds do), not everyone is so comfy with building their retirement on nukes.
Sure, some say nuclear technology should be classified as environmentally friendly power since no greenhouse gases or asthma-inducing emissions belch out of stacks, but most enviros will tell you the only thing green about the industry is their PR yak.
Uranium mining is an ecological nightmare. Nuke plants regularly discharge carcinogenic tritium into our water, and Ontario already has well over 30,000 tons of radioactive waste on its hands, not to mention the astronomical cost overruns associated with building and keeping those reactors alive.
The good news is that most socially branded funds, including Ethical Funds, Meritas, DesJardins and MacKenzie Sustainable Opportunities Fund, have strict no-nuke policies, aka screens. Acuity, on the other hand, has sunk big dollars in TransCanada Corp, which is largely funding the Bruce reactor refurbishment and is gunning to build a new reactor in Alberta.
Scotiabank’s brand new Global Climate Change Fund proudly includes nuclear on its list of “environmentally responsible investments.” (FYI, Scotiabank and TD totally tanked on the first-ever ranking of 40 leading banks on climate change strategies last month. Maybe that’s why Scotiabank just came out with the new fund and TD has announced that its domestic operations will be carbon-neutral by 2010.)
If you’re unsure about your particular investments, don’t be shy: ask. It’s not too late to switch to a nuke-free fund this season. And yes, they can definitely do your pocketbook good. The Ethical Funds Company made a 2007 list of the top-10 performing mutual fund companies in Canada. Stop by your local credit union for more info.
And if you want to be a purist about the whole green investing thing, check out Clean Power Income Fund, which trades on the TSX and invests solely in renewable energy – wind, solar, water, wood waste and landfill gas. All feel-good stuff.
Got a question? Send your green queries email@example.com