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The G in ESG  

Sept-23-2021

Right here at home

As I began to think about how I could talk about governance in ESG, I was presented with a perfect local example. Although the biggest national take-away from the recently finished Canadian election was how little anything changed, we saw one of the few examples of significant change right next door in Kitchener Centre.

As you probably already know, a series of unexpected circumstances allowed the Green Party of Canada to elect their very first Member of Parliament here in Ontario. Mike Morrice had finished second in the 2019 campaign and chose to run again for the Green Party. Then, late in the campaign Raj Saini, the Liberal incumbent, decided to end his campaign amid allegations of inappropriate conduct towards female staffers.

Because it happened so late, the Liberals could not remove Saini’s name from the ballot. This gave Morris the opportunity to take advantage of his previously strong showing in the riding to become the first ever Green Party MP from Ontario.


Green Party local success contrasts with national collapse

Across the rest of Canada, the Green Party saw a collapse in their support. This has been blamed on the controversy that has plagued their federal leader, Annamie Paul.

Elected leader of the party less than a year ago, Ms. Paul, also ran three times for the Green Party than two years as a local candidate in Toronto Centre.

But things took a strange twist for Ms. Paul and the Green Party in June. At that point, Jenica Atwin, a Green Party MP from News Brunswick crossed the floor to sit with the Liberals. She referred to differences with Ms. Paul over the party’s position on the Israeli-Palestinian conflict. The party also announced that they were conducting an internal review of Ms. Paul’s leadership. That was suspended when the election was called. But that point the damage had been done.


Governance becomes consequential when it becomes public

In both these situations, the damage was done when problems became public.

If you are concerned about the presentation of environmental issues in the Canadian House of Commons, then the difficulties in the Green Party probably bother you. The fact that the root of the issue lies with apparent differences of opinion about in the Middle East just makes the story harder to figure out.

On the other hand, the problem for the Liberals in Kitchener Centre stems from the growing intolerance for sexual harassment in the workplace. Both Raj Saini and former Governor of the State of New York Andrew Cuomo can attest to that.

In both situations, allegations had been reviewed internally and dismissed. But when the stories went public the increased scrutiny forced each of these elected officials to resign. And their stories are not unique.

The issues addressed in these stories cover the entire ESG spectrum. And they serve as a stark reminder of the impact that these issues can have when they become public. Unfortunately, we cannot always foresee these occurrences.

And that can be one of the most difficult aspects of investing responsibly. But there are tools available to help make our decisions easier. Call or write me to start looking at using some of those tools in your own investment decisions.

The S in ESG

Aug-24-2021

Shall we continue?

Last month I shared a local example of an environmental concern right here in Cam-bridge to highlight the impact, both local and long term, of environmental mismanage-ment. This month I want to spend some looking at a local example of the social aspect of ESG.


Residential Schools in Canada: A Painful Legacy for All Canadians

This summer the legacy of residential schools and Canada’s treatment of our First Na-tions citizens regained public attention, with the identification of approximately 215 bodies on the grounds of the former Kamloops Indian Residential School in British Co-lumbia. Since then, numerous other sites all across Canada have been scanned with equally heart-rending results.

As a result, many Canadians sought to commemorate Canada Day differently this year with a recognition of this legacy and the ongoing difficulties our fellow Canadians from a First Nations heritage continue to have.


Woodland Cultural Centre - Bearing Wit-ness to Our Residential School Hereitage

Efforts at acknowledgement and reconciliation can be seen at the Woodland Cultural Centre in Brantford, located on the grounds of the former Mohawk Institute Indian Res-idential School.

One of the major projects of the Woodland Cultural Centre is an effort to renovate the Mohawk Institute to serve as a reminder of of our legacy. And with that knowledge, seek to atone for and correct our mistakes.

If this is something you would like to participate in join the Save the Evidence Cam-paign at Woodland.


Five Oaks - A Local Effort at Reconciliation

On another note, Five Oaks is a retreat centre here in South Central Ontario I have had the privilege of being involved with over the years. Five Oaks, a United Church retreat centre, states that their goal is: “To be a sacred place where people of all faiths as well as spiritual seekers can gather in community to live, work, learn, pray, play, heal, and act for justice.”

Although Five Oaks is a United Church retreat centre, it lists Six Nations of the Grand River and the local Muslim community as Vision Partners. I see this as a example of the power of shared experience and community right here in South Central Ontario.

Right now, one of the most prominent ongoing events at the center is titled Honor-ing Missing Students of IRSS through Prayer and Dialogue. It seeks to address the need for dialogue that we need to go through if we are ever going to properly addressing the disturbing legacy of residential schools in Canada.

The program runs on the second Sunday of every month from 2:00-4:00. I encour-age you to look into it.


Residential Schools - A Legacy for All Ca-nadians to Come to Terms With

The arrival of Europeans on the territory we now call Canada has painful elements for our First Nations neighbours. And that legacy has a local as well as a national presence.

In order for us to cope and move forward as a nation we need to address and atone for these historical legacies. Things like the Save the Evidence Campaign and places like Five Oaks are local examples of the opportunities we have right here in South Central Ontario.

The E in ESG – The What in Where?

July-27-2021

Maybe you were sipping your morning coffee and checking the news or talking to a colleague on a Zoom call the first time you heard or saw it. Now you’re wondering “Exactly what is E… S… G...”


Let’s start by saying the ESG acronym has been getting a lot attention in investment circles and the media in the last few years.


ESG, which stands for Environmental, Social and Governance, can be traced back to the founding of the United Nation’s Principles for Responsible Investment (PRI) in 2006. According to Investopedia, as of January 2020 there are 2300 participating financial institutions committed to PRI with Assets Under Management of over $80 trillion US. Nothing to sneeze at.


E is for Environmental

I am going to take the time in the next few blog posts over the next couple of months to describe ESG and explain its role in Socially Responsible Investing (SRI) and in your portfolio.


And it only makes sense to start at the beginning – Environmental.


Generally, environmental concerns can be the most easily identified issue in our portfolio. It’s relatively easy to ask, “Do I have fossil fuel extraction companies in my plan?”


We Can Make a Difference

But that isn’t the only way we can be environmentally supportive in our investment decisions. In a stunning and widely reported move:


“In May 2017, 62% of ExxonMobile shareholders went against management’s recommendations by voting to require the world’s largest oil and gas company to report on the impacts of climate change to its business (an increase of 38% over the previous year). This response followed the Paris Climate agreement.”

This is an excellent example of shareholder engagement, an SRI concept I will discuss is greater detail in the months to come.


And it’s a prime example of how there are real opportunities for investors to have an impact by getting involved instead of just “getting out”.


Let’s Bring It All Back Home

If you are a long-time resident of Kitchener, you may remember when the city discovered a coal tar deposit on the site of an old manufactured-gas plant at Joseph and Gaukel Streets. This plant used coal to generate heat and electricity for residents between 1882 and 1958, when they started using natural gas piped in from Alberta. The residue was just buried on site for future generations to deal with. Sound familiar?


Even though the plant had already been closed for 50 years by the time clean up started, it was still an environmental disaster that had to be addressed.


Clean up costs ended up costing $19 million in 2006-2007. The same year as the founding of PRI, hmm.


Fixing Things Before They get Any Worse

This is just one example of the type of long term financial and environmental costs of poor environmental stewardship that are left for future generations to deal with. Water quality issues in Flint, Michigan and in First Nations communities across Canada are a couple of other high-profile examples.


You and I know we have to start properly addressing the types of environmental damage we are inflicting on our planet – the only one we have. One major way to do that is by reviewing and acting on the environmental aspects of our investments and our financial lives.


In my practice I do just that. If you want to join me then go ahead and

• call me at (519) 279-0186 or 1-888-868-6689

• send me an email at [email protected]

• or find a time that works for both of us on my calendar 

Socially Responsible Investing is Good for your Portfolio as well as your Conscience

July-08-2021

I have been providing socially responsible financial advice to private investors for 6 years now. One of the things I hear most often is along the lines of “Socially responsible investing is all well and good but I need to make sure I maximize my earnings. Now.”

This response is frustrating because I know that one of the best ways to maximize your investments is by investing with socially responsible principles in mind.

In fact, a 2015 study conducted by the Carleton Centre for Community Innovation stated that:

  • The traditional investment approach argues that SRI limits the investment universe and results in a decrease in value. But this view is not backed up by empirical evidence… most studies show that SRI funds deliver comparable and, in some cases, superior returns to those of traditional funds.

SRI works as a solid investment strategy. Period.

Making investment decisions based on SRI is not about “or” – I can invest ethically or I can make money. It is about “and”. I can invest money ethically and I can make money on those investments.

In fact, you increase your returns and your security by investing in SRI related funds. Sort of like having your cake and eating it too.


SRI finds the best things to invest in - all round

Think about it. Corporate success relies on many factors. Ultimately, both financial and social perspectives play a role in determining a company’s long-term success and its bottom line.

While short term success may come from following fast and loose practices you should remember that you are investing for the long term.

By seeking out companies with a proven record as good corporate citizens you can minimize the likelihood that a centerpiece of your investment portfolio ends up on the front page of the newspaper with a story reflecting a lapse in corporate judgement.

In-depth reviews of corporate practices will help you to find the gems that will grow steadily into the future. And good solid SRI studies do that for you.

SRI does not ignore sound financial principles. It adds to them. And your portfolio is stronger for it.


The numbers prove it – SRI improves your chances and your return

The Carleton study, published in 2015, pointed out that the SRI sector was already seeing significant growth. That growth has only increased since then.

In February in a report titled Sustainable Fund U.S. Landscape Report, Morningstar pointed out that:

Sustainable funds attracted a record $51.1 billion in net flows in 2020, more than twice the previous record set in 2019. Sustainable fund flows accounted for nearly one fourth of overall flows into funds in the U.S.


Join the party – become an SRI investor today

So come on. Let’s work together to make the world a better place while securing your financial future. Make it happen today. You’ll be happy you did. On so many levels.

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