<span class="vcard"><a class="url fn n" href="https://www.sustainabilityconsultantnetwork.com/?author=4" title="Patrick Metzger" rel="me">Patrick Metzger</a></span>

The webinar on Sustainable Investing with Sucheta Rajagopal was very successful, and provided valuable information on how we can invest according to our values.

You can watch the recording of the webinar below. Followed by Sucheta’s presentation.

Join us on Tuesday, May 25 from 6 – 7 pm for a webinar on Sustainable Investing with Sucheta Rajagopal. To join, use the QR code on the poster above or click here to go to Airmeet .

Sucheta Rajagopal has been involved in Socially Responsible Investing (SRI) for over 20 years, advising clients on how to integrate environmental, social and corporate governance issues into their investment portfolios.

 A Portfolio Manager and Certified Financial Planner at Research Capital Corp., Sucheta manages one of the largest exclusively SRI books of business in Canada. Using plain English and a practical approach, Sucheta helps clients align their investments with their values.

A trailblazer in Canadian SRI, Sucheta is excited to be helping build capacity and community in Impact Investing. She is currently a member of the Advisory board of Marigold Capital, a Toronto based investment firm focusing on impact investing & gender lens investing strategies, and she also serves on the Board of the Catherine Donnelly Foundation.

Sucheta has an LL.B. from Osgoode Hall Law School. She is a graduate of the Canadian Securities Institute’s Professional Financial Planning Program, a Certified Investment Manager (CIM), a Fellow of the Canadian Securities Institute (FCSI) and a Certified Financial Planner (CFP). Sucheta has also earned Canada’s Responsible Investment Advisor Certification (RIAC).

Some twenty years ago, I wanted to invest in companies that reflected my values. It wasn’t that easy to do. While the concept of socially responsible managed funds has been around since the seventies, by the nineties there still weren’t that many out there, and generally they didn’t have a long or stellar track record. And there definitely weren’t any tools allowing me to evaluate companies myself.

As a result, I ended up in an uncomfortable mish-mash of solar power companies, clean water plays, and other greenish investments, with mixed results that I’d rather not talk about.

But the age of sustainable investing for everyone appears to have finally arrived.

What is sustainable investing?

Broadly speaking, sustainable investing is an investment strategy which puts your money into assets consistent with specific ethical principles, presumably yours. However, it’s not just an exercise in feeling good about yourself. Sustainable investing can reduce long-term risk and enhance financial performance.

Sustainable investing can be a blanket term for related strategies, including values-based investing, ethical investing, ESG investing, socially responsible investing, and impact investing.

Why so many terms, and what’s the difference between them?

While these terms are sometimes used interchangeably, there are differences.

Socially responsible Investing (SRI) typically involves negative screening on Environmental, Social, and Governance (ESG) criteria – depending on the investment manager, this may mean excluding a wide variety of investments; for example, fossil fuel producers, firearms manufacturers and tobacco companies. This is the oldest and most common form of sustainable investment.

Impact investing uses positive screening – instead of just avoiding companies that have a poor track record on ESG issues, impact investors seek out firms that are actively looking to do good. This strategy is necessarily more risky than negative screening, but you get the warm and fuzzy feeling of knowing that your money is advancing society.

Why would I do it?

Why wouldn’t you? You and your money can do some good in the world (or at least less bad) and get rewarded with the above-mentioned feel-good dopamine release.

But what about my returns?

Returns matter. Unless you’re Warren Buffett or Mark Zuckerberg, you likely can’t afford to gamble away a million here or there (and if you are Buffett or Zuckerberg, thanks for reading and please like or share this article.)

Fortunately there’s a lot of evidence that companies with high ESG scores perform better in the marketplace.

Fund rating company Morningstar says that “funds that explicitly embrace ESG as part of their prospectus… tend to have better star ratings. That means their risk-adjusted returns within their category tend to be a little better than what you’d expect for the overall universe.”

Research from the Harvard Business School found that “firms with good performance on material sustainability issues significantly outperform firms with poor performance on these issues, suggesting that investments in sustainability issues are shareholder-value enhancing.”

And a 2015 metastudy in the Journal of Sustainable Finance and Investment looked at 2200 other studies linking ESG with Corporate Financial Performance and concluded that “Investing in ESG pays financially.”

It makes sense. Ethical considerations aside, paying attention to environmental, social, and governance factors is a means of avoiding risk that may not emerge from traditional analysis.

For example, a company whose supply chain is vulnerable to disruptive weather events could be adversely impacted by climate change. Companies which demonstrate unethical behaviours such as poor treatment of workers, or who engage in environmentally unfriendly practices like rain forest destruction have seen their brands punished in the market. Firms with fossil fuel assets in the ground may see their value plummet due to regulatory changes or substitute technologies that emerge from the fight against global warming.

These kinds of issues can be flagged by ESG analysis before they hit the P&L and the share price.

If this is such a great idea, why isn’t everyone doing it?

More and more, they are, especially at the institutional level. In the US, assets managed sustainably grew by a third from 2014 to 2016, covering about 20% of professionally managed assets. In Europe over half of professionally managed assets qualify, and in Canada it was 38% at the start of 2016.

Recently Larry Fink, founder and head of fund giant BlackRock, said in his annual letter to his CEOs “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

The times are changing, and quickly.

So how do I invest sustainably?

Mutual Funds and ETFs: As a retail investor, the easiest way to get involved is to buy sustainable mutual funds or ETFs, of which there are many.  They come in all kinds of flavours, from funds which track indices but with particular industries filtered out, to impact funds specializing in certain sectors, so it’s important to understand what you’re looking for. Check with your current financial services provider or try a Google search.

Robo-Advisors: Many automated investing services, aka robo-advisers, such as WealthSimple in Canada or Betterment in the US, offer sustainable portfolio options. A growing number of American firms like Earthfolio specialize in socially responsible investing.

Financial Advisors: If you work with a financial advisor, ask him or her about sustainable investing. Some advisors work with companies like Sustainalytics or MSCI ESG Research, who provide in-depth data and analysis on the ESG performance of specific companies to a largely institutional client base.

Self-Directed: For self-directed investors looking for ESG analysis of individual firms, some tools are available. In Canada, Scotia iTRADE offers a suite of tools to evaluate companies on ESG criteria, while in the US, Merrill Edge provides sustainability rankings and information for their clients. 

Is sustainable luxury an oxymoron? Depends on your definition.

The word luxury connotes excess; at the highest end, you’ve got super-yachts with heli-pads and champagne hot tubs, towing mini-yachts behind them like million dollar ducklings.  At the lower-but-still-pretty-high end, you can buy $100,000 watches and $600,000 bottles of Scotch at the airport when the spouse doesn’t need another Eiffel Tower snow globe.

It’s hard to argue that this kind of conspicuous consumption, except for possibly the Scotch, can be deemed sustainable or even useful.  

But luxury has another face.

In the waning decades of the last century, the upscale purse-mongers and sweater-slingers of the world recognized that they couldn’t rely on a handful of mercurial billionaires to keep them afloat. They started downgrading the product line, er, extending the brand, to appeal to people who were willing to spend more to buy stuff they would have gotten anyway, but with nicer fonts  (that this has often been a spectacularly successful strategy is remarkable and reflects poorly on humans, but that’s a separate discussion. ) Now instead of having to be humiliated and impoverished at their local equivalent of Rodeo Drive, any suburban aspirationista could take the minivan to the mall and pick up a 150 dollar Prada keychain  or 50 dollar Armani Exchange t-shirt.

Around the same time, newer companies like Coach and Starbucks emerged to offer this group of newly empowered consumers an affordable cachet, with products occupying price/quality points somewhere between their mass market competitors and traditional high end goods. (A 2004 Harvard Business Review article coined the cringey portmanteau “masstige ”  or mass prestige, to describe the phenomenon; the term never caught on and is repeated here principally for the amusement of the reader.)

This type of luxury product has the most promise in terms of achieving true sustainability. Excluding the hardest core of activists who define purchase of anything that would have been unfamiliar to a medieval peasant as environmental  crime, it’s fair to assume that people are going to need handbags, shoes, sweaters etc, and that those things can be manufactured and sold with some degree of sustainability.

The data suggest that it’s in the interests of companies to do just that.  A 2017 Nielsen survey in the United States found that while all age groups thought it was important that companies work to improve the environment, an overwhelming 83% of the millennial cohort (defined as born between 1982 and 1996) agreed with the statement.

And while that group may currently be cutting back on the avocado toast in the wake of the pandem-cession™, they and Gen Z after them are in line for the biggest wealth transfer in history as their boomer parents and grandparents shuffle off to communes and discos in the sky.   

Whether it’s altruism or self-interest, or most likely some combination, luxury goods companies are responding.

In 2019, a group of fashion houses and textile manufacturers, including big names like Adidas, Ralph Lauren,  and Hermes, signed on to the Fashion Pact, an agreement to work towards specific goals around climate change, biodiversity, and other environmental issues.   Not uncommonly for high-minded, well-publicized agreements, the details on how these goals will be achieved or measured are fuzzy, but it’s a step in the right direction.

More luxury goods companies are emerging with sustainability as a core value and not just a page on the website. NAK (No Animal Killed) shoes emerged in 2018 selling cruelty-free vegan footwear into the mass luxury market. Misadventure Vodka in San Diego (“Hedonistic Sustainability”) distills their premium product from expired baked goods. And in the automotive industry, Tesla has famously emerged as a luxury brand on a high profile mission to fight climate change.

It remains to be seen whether plant-based boots and electric limousines will save us from our self-inflicted existential crises.  As consumers grow more aware of the gravity of social and environmental challenges we face, will sustainability become effectively mandatory for companies selling into the luxury market? Or will we collectively shrug, buy more stuff, and document the collapse of civilization on Instagram?

The SCN Webinar on the future of plastics and recycling sparked vigorous discussion around the future of plastic in society. Speakers were:

Elena Mantagaris, Vice President, Plastics Division, Chemistry Industry Association of Canada

Crystal Howe, Sustainability Manager, Ice River Springs & BMP Recycling

Dr. Patricia Corcoran. Associate Professor & Department Chair, Department of Earth Sciences, Western University

Speakers each presented on a particular aspect of the plastics dilemma – how do we trade off the utility of plastic against environmental harm? – followed by questions from the audience.

Join us for our webinar on December 3. To learn more or to register, go to:

https://www.eventbrite.ca/…/the-plastic-dilemma-does..
Or
https://www.meetup.com/

Last week Amy Domini, founder of pioneering ESG (Environmental, Social, Governance) fund Domini  Impact Investments LLC, told Bloomberg News that climate, not elections, would have the biggest impact on the stock markets over the next few years.

The evidence supports her.

Sure, Covid-19 is hogging headlines as the disaster du jour, but on the climate front, 2020 is shaping up to be the year that Gaia struck back.

The year started with huge swathes of Australia getting tossed on the barbie in unprecedented wildfires, which were eventually quelled in part by torrential rains and flooding.  Not be outdone by the junior continent, areas of Siberia basking in a newly subtropical climate burned through former permafrost , releasing huge amounts of carbon to further exacerbate global warming.

In the American West, California, Oregon, Washington, and Colorado are having apocalyptic fire seasons, all attributable at least in part to warming from human greenhouse gas emissions.  Down south, warm waters in the Atlantic contributed to an unprecedented – yeah, you’re hearing that word a lot – hurricane season, with so many named storms that we’re stuck with calling them by Greek letters instead of kicky media-friendly names.

So humanity is careening down a Gadarene path to self-extermination, with climate change the primary driver, and other potent disasters like ocean acidification, plastic pollution, and unchecked deforestation looming behind.

What’s missing is the absence of boardroom conversations about these very real existential threats. While most large companies have some form of Corporate and Social Responsibility reporting, addressing environmental, social and governance (ESG) issues is often not so much a priority as a an inconvenience foisted on them by regulators, media, and an increasingly uneasy public.

The corporate world has more power today than at any time in human history, with mega-corporations and their shareholders commanding more resources and influence than most nation-states. This isn’t necessarily a bad thing or a good thing; but it’s a thing.

And yet the big picture conversations are rarely happening. Leaders divert their gaze from the elephant in the room, or suggest that it’s a coffee mug or a potted plant, when it’s just smashed the video conference gear and is standing on the table trumpeting.

If we’re going to secure a habitable planet in which to live and do business, climate and ESG concerns must become a fundamental element of corporate strategy.

 Some companies are starting to take a more active approach to the issues, for example, examining the vulnerability of their supply chain to accelerating weather disasters.

But paying attention to the issues must go beyond pragmatic self-interest and PR lip service. This has begun, as auto companies pledge greener vehicles and carbon reduction, and manufacturers and retailers adopt renewable energy to run their operations. And 55 financial institutions, including heavy hitters like HSBC and BNP Paribas recently  agreedto set climate goals for certain assets in their loan portfolios. All helpful, but far too slow and too vague to ward off probable disaster.

It’s up to investors to demand change, and for regulators to enforce it.  Now.

A recent survey found that 70% of Institutional investors think that ESG analysis – of which climate is a key subset – will be standard for portfolios in the next five years, and 78% have invested in sustainable infrastructure projects. And more retail investors are starting to look for sustainable investments, although options are still relatively limited.

The next step is accountability. Regulators making ESG reporting a fiduciary responsibility makes sense, particularly when studies have found that firms with high ESG scores can reduce risk and deliver better returns.

That’s not to say it will be easy. Most companies still aren’t set up to gather and report detailed ESG data, making measurements potentially inconsistent and unreliable. Even the basic idea of what metrics should be reported will diverge widely among stakeholders.

But from an ROI point of view, it’s a no-brainer. For some relatively meagre up-front investment, businesses improve performance, investors make better decisions, and the human race continues not to be extinct.

Sixty enthusiastic attendees turned out to network and to learn more about opportunities in the sustainability sector at the “Green Career Workshop” event on March 28, 2018.

The event was facilitated by Elena Jusenlijska, Manager, Corporate Engagement at ACCES Employment, and former Headhunter at Delta Management, specializing in recruiting Green Professionals.

The complete video can be found here.

The five featured speakers were:

Indra Maharjan: Program Manager, Energy Conservation, Resource Recovery and Climate Change at Ontario Clean Water Agency

Indra spoke of his journey from Nepal to Canada in 2010 with two Masters degrees, and the steps he took to find a career in his field. Indra started as an Energy Analyst with the City of Toronto before ultimately landing his current position as a program manager with the Ontario Clean Water Agency (part of the Ministry of Environment and Climate Change).

Indra recommended that newcomers and those  looking for a career in sustainability find a mentor to help them sort through the noise of available information and understand what’s important.  He also identified networking as a key activity.

He noted that the Ontario Clean Water Agency expects to see about 20% of staff retire in the next two years, leading to opportunities for younger people in an area of secure employment. However, since it’s a regulated industry, appropriate training and licenses are necessary.

Lily Lin: Sales and Marketing Coordinator at Panasonic Eco-Solutions Canada, and President of Toronto Renewable Energy Network

Lily discussed her experience in coming from China in 2008 and how her dual passions for nature and problem solving led her to involvement with various sustainability and environmental groups.  She noted that working in various customer-facing roles early in her career provided her with valuable experience in dealing with people which  can be used in any job.

As current President of the Toronto Renewable Energy Network, Lily talked about  plans to rebrand that organization,  including a new name and expanded focus.

Akhil Sivanandan:  Co-Founder of Green Story

Following an undergraduate degree in Computer Science, Akhil finished his MBA at the Rotman School of Management . He worked in several roles before taking a position with the Ontario Ministry of the Environment and Climate Change as a program advisor on  cap and trade and other programs.

He subsequently decided to venture out on his own, founding Green Story. Green Story works with companies to assess the sustainability value of their products and services .and present that information in a straightforward way to their customers.  The goal is to encourage consumers to understand and to make greener choices.

Green Story has grown from 1.5 people to 8 since its founding in March of 2016.

Ana Zotovic: Support Assistant, Economic Development and Culture, City of Toronto

Ana spoke to the way that the City of Toronto breaks down the sustainability sector in terms of achieving efficiencies, reducing risk, and studying and managing environment impacts. At the high level, these include Clean Energy, Green Buildings, Sustainable Transport, Resource Management & Environmental Protection, Bio-Products.

The Economic Development Office is works to create green jobs in two ways: indirectly via the Sector Development Office Core Activities, and directly via the Green Market Acceleration Program (GMAP).GMAP  accelerates the development of Made-in-Toronto Green Technologies through collaboration with the City.

 Sahra Shojaie:  Sustainability Consultant at Sustainability Consultant Network

Sahra has a Masters in Environmental Applied Science and Management from Ryerson University, specializing in Biomass research. She works with numerous environmental groups, including the Ontario Community Energy Co-op, Women in Renewable Energy, International Renewable Energy Academy, and the Water Environment Association of Ontario.

Sahra provided an overview of several programs which provide opportunities for sustainability/impact jobs. These include Natural Resources Canada – Science and Technology Internship Program, Bmeaningful, and the Professional Access Into Employment (PAIE) Bridge training program.

Sahra works directly with the Sustainability Consultant Network Consultant Internship Program, which provides real world training with   consultants helping small to medium sized enterprises improve their business through sustainability.

Q&A and Breakout sessions

The speakers were followed by a question and answer session which focused on how to get started in a  sustainability career.

Key points:

• Networking is a cliché, but a true one. Find a niche where what you’re passionate about intersects with what you’re good at, and focus on networking there. (Sahra)
• Create a personal brand and enhance it constantly. Look ahead to what the market will need in the future, not just at what it’s doing now. Train and educate yourself for that future. (Indra)
• Reputation is key. When networking and asking for a meeting , be sure and have a plan so that you’re not wasting that person’s time. (Akhil)
• Develop a combined skill set and understand its value. Having a sales background was very valuable when working in project management. Define your strengths and what skills you want to apply. (Ana)
• Use all avenues to develop your career, including online applications, social media, and networking events. There are many different avenues to career goals. (Lily)

The evening closed with breakout sessions, facilitated small-table discussions, and networking which gave the attendees a chance to meet with and ask questions of the speakers.

Watch the complete event video here!

Funding provided by the Government of Ontario.