Reinvesting


So you’ve made the decision to divest from fossil fuels. What’s next?

The first step is to tell your bank that you’d like to make your investments fossil-free. Even if they do not currently offer fossil-free funds (FFF), simply asking helps your financial institution realize that there is a consumer demand for such products. If large numbers of consumers ask to divest from fossil fuels, financial institutions will increase our investment options to capitalize on that demand and keep your investment dollars.
 
The folks at divestinvest.org have created a divestment pledge to demonstrate the growing public demand for fossil-free funds to all financial institutions. You can sign their pledge here.
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The range of options for impact investing continues to grow. SolarShare, ZooShare, and the Centre for Social Innovation have collaborated to produce a fact sheet on community bonds that highlights promising options in Ontario. Tim Nash, The Sustainable Economist, provides a helpful overview and link to the factsheet in this blog post.
 
Some existing options*:

  • Broad-based Funds invest broadly, but not in fossil-fuel industries

    • IA Clarington Inhance SRI Funds. This is a family of funds, including “Inhance Monthly Income SRI”, “Inhance Growth SRI Portfolio”, “Inhance
      Balanced SRI Portfolio”, and “Inhance Global Equity SRI”.
      Details.
    • The MD Fossil Fuel Free Eqity Fund and Bond Fund are sponsored by the Canadian Medical Association. The equity fund is invested in financials (25% or more) and technology (20% or more), almost completely outside Canada.
    • BMO Fossil Fuel Free Fund ()
      \invests “primarily in a globally diversified portfolio of issuers and excludes investments in issuers that are primarily involved in the development and infrastructure of fossil fuels.”
    • CIBC Wood Gundy Blue Heron Advisory Group has a suite of fossil free funds, however they don’t appear to be available except via an “advisor managed account”, which are “tailored to the affluent investor”.
    • Genus Capital ManagementFossil Free Portfolios were created at the request of the David Suzuki Foundation (story). It is managed directly through Genus rather than a fund you can purchase within another account and requires a $50,000 initial investment.
    • TD Canada Trust Green Bonds (This particular series is no longer relevant, having matured in early 2017. It’s not clear that there is a current version.)
  •  

  • Sector-Specific Funds are FFF because they invest in a limited sector of the economy. They are sometimes pitched to FFF investors as alternatives; but really, many sector-specific funds meet the FFF criteria.
    • Greenchip Financial offers a “clean-tech” and clean energy fund to “accredited investors” willing to invest $150,000 or who have very high incomes.
    • AGF Global Sustainable Growth Equity Fund (Morningstar) invests in energy and power technologies, waste management and pollution control, water and waste water solutions, and environmental health and safety companies.
    • NEI Environmental Leaders Fund (Morningstar)invests globally in “rapidly expanding environmental markets. Corporate leaders in these markets innovate across a range of areas including energy efficiency, renewable energy, water infrastructure, waste management technologies and sustainable food, and agriculture.”
  •  

  • Local Energy Projects
    • The Community Energy Development Co-operative has contracts with the Ontario government to generate energy via the solar Feed-In-Tariff program. Builds systems in Waterloo Region, Guelph, and the City of Greater Sudbury.
    • LIFE Co-operative renewable energy co-operatives also builds local renewable energy projects in Southern Ontario.
    • SolarShare’s Community Solar Bonds with solar projects in Ottawa, Mississauga, St. Catharines and other Ontario locations.
    • ZooShare Biogas Co-operative’s community bond supports turning manure (from the Toronto Zoo!) and supermarket waste into biogas.
  •  

  • US Options for those who are interested in maintaining a US trading account
    • Green Century Balanced Fund (GCBLX)
    • PZD PowerShares Cleantech “invests at least 90% of its assets in stocks of clean technology (or cleantech)”. Currently about 55% is invested in “industrials” and 27% in information technology.
    • SolarCity’s Solar Bonds (on 2017-05-13 access was denied by security rules, likely due to access from outside the US)
  •  

  • Other Resources
    • FTSE All-World ex Fossil Fuels Index Series shows what returns would be like if you could invest in a really broad set of world-wide stocks that didn’t involve fossil fuels. Unfortunately, there don’t appear to be any exchange traded funds (EFTs) that actually track this index.
    • FTSE Green Revenues Index Series “is designed to obtain increased exposure to companies engaged in the transition to a green economy”. Unfortunately, there don’t appear to be any exchange traded funds (EFTs) that actually track this index.

*Divest Waterloo cannot currently vouch for the fossil-free nature of these investments, so we encourage you to do your research.
Divest Waterloo is not an investment organization, nor should any information offered here be understood as investment advice; each individual, group, institution, or other entity making investment decisions should consult with trusted investment advisors and/or financial consultants before making any investment decisions. We do hope, however, to offer as many resources as possible; if your financial institution recommends a fossil-free fund that is not on the above list, please let us know.

 

Additional reading:

Canadian Centre for Policy Alternatives, Canada’s Carbon Liabilities: The implications of Stranded Fossil Fuel Assets for Financial Markets and Pension Funds.

Now Magazine article: “How do we get investment funds and pensions off fossil fuels?”

The Climate Has Changed report (July 2014) from Canada’s Responsible Investment Association exploring the investment potential of fossil fuel free portfolios and the challenges for Canadian investors

Corporate Knights: Clean Capital Decarbonizer tool and news release Fossil Fuel Investments Cost Major Funds Billions.

Sustainable Economist fossil-free portfolio

Clean Energy Canada’s Clean Energy Review provides a weekly digest of the 10 most
important climate and clean energy developments.

Green Revolving Funds

Aperio Group Fact sheets, research reports and other resources to support carbon divestment.

Extracting Fossil Fuels from your Portfolio: A Guide to Personal Divestment and Reinvestment, a report by 350.org, Green Century Funds, and Trillium Asset Management

Globe & Mail article: “For Canadian investors, carbon-free portfolio a tricky task”

Institutional Pathways to Fossil-Free Investing, a report by J. Humphreys, Tellus Institute