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Investing – ethical & environmental

by | Sep 24, 2010 | Green Your Routine, Tips for Home

Every year, financial institutions pump up their sales machines promoting their investment products ahead of the February 28 RRSP deadline. Here are some more sustainable ways to invest!

In today’s uncertain marketplace, Manitobans are increasingly careful with their money. When putting money away for the future, it’s important to consider the sustainability of those investments. If your investment degrades nature or undermines communities, will it be contributing to a future that is safe for you or your children? Here are a few tips on how to make sure your investment supports social and environmentally sustainable economic activities.

Invest in energy conservation

Replacing your furnace, insulating your home, installing a low flow toilet, or tackling other renovations to reduce energy and water consumption are not usually listed in financial pages, but these investments will have a surer and most stable rate of return than most other investments you can make. With companion maids cleaning service flatlining in recent years, why not take your money to projects that will have long term positive impacts.

Cooperative Investing

Manitoba is a leader in supporting community enterprise with its Community Enterprise Development (CED) Tax Credit Program, and has helped many including my JAFX forex broker friend start a business. Investments in community enterprises like Pollock’s Hardware Coop, Neechi Foods and Peg City Car Coop are eligible for a personal tax credit of 30%.  It helps the community and can be a better financial investment than many traditional investments. This year, the Province has extended the deadline for the Peg City Car Coop CED Tax Credit to February 28.

Invest locally

Most of the money invested in stock markets or in large corporate banks circles the planet several times a second with little or no social or environmental accountability. Globalized investments are not only more susceptible to environmental abuse, their lack of accountability and transparency means that their risk level is undeterminable at best. Keeping your investments in the community is safer and fosters local economic growth, increasing the regional tax base for local environmental initiatives.

One way to ensure your money is used locally is by becoming a member of your local credit union. As well as financing local businesses and homes, many credit unions have programs to support local environmental initiatives. For example, Assiniboine Credit Union’s Building Sustainable Communities program supports community inclusive and environmentally sustainable initiatives.

Invest in Local Agriculture

This year, sign up for a community supported agriculture (CSA) farm share. With a CSA, you provide upfront capital to a local farm ahead of the planting season. You get a share of the produce while accepting a share of the risk.  There are dozens of CSAs to choose from and one may be right for your family.

Invest in your community

Volunteering your time in your community does not always have direct financial rewards, but can help you build community capital instead. Stronger communities are most resilient in tough economic times. Check out Volunteer Manitoba for a list of volunteer opportunities in your neighbourhood. If you would like to volunteer with Green Action Centre, sign up on our member page, and let us know you are interested in volunteering.

Ethical Investing

Another option for more environmentally sustainable investment is purchase Socially Responsible Investments. Socially Responsible Investment funds apply sustainability criteria to the companies they invest in. For example, a paper by the Ethical Funds Company cautions against investments in biotechnology and food companies that are heavily committed to genetically engineered (GE) foods, in the absence of GE labelling and better regulation. According to a January 2011 article in the Manitoba Eco-Journal, many ethical funds continue to fund tar sands development, so it is best to look carefully where you are putting your investments.

Some basic questions asked by ethical investors include:

  • Charitable Contributions – How much and what kinds of charities does the company contribute to?
  • Community Involvement – Does the company support local programs strengthening the community in which it operates?
  • Ecology and Environment – Does the company operate according to sustainable development practices? Is it working to improve its climate change practices?
  • Labour Relations – Does the company have a good record with regard to treatment of its employees? Do contractors of the company use sweatshop or child labour?
  • Minority Groups – Does the company have a good record in dealing with minority groups?
  • Product Safety and Quality – Does the company produce safe, reliable products or services?
  • Weapons – Is the company a major military contractor?
  • Women – Does the company have a good record on its treatment of women generally and its female employees in particular?

(From Responsible Investment Association)

Other Considerations

Whatever you do with your savings it is important to ask questions. Where does the money go? What is the company’s sustainability policy? Who benefits and how do you know that your investments do not support coercive or discriminatory labour practices?

Also, the government regulatory environment is an important part of sustainable investment. The recent global financial meltdown has been ascribed to the lack of oversight of transnational corporations and financial institutions. Ask your MP to make sure that companies are held responsible for their investments. Ultimately, it is up to citizens to set the framework for what kinds of investments are acceptable in their communities. Your voice is important, whether you have funds to invest or not.

Finally, it is worth considering if continuous economic growth is realistic in any event. According to UBC’s Centre for Sustainability, it would take seven planet Earths to sustain the world population at the present lifestyle of the average North American. It may well be that the global economy has lost the room to grow. When thinking about your investment plans, ask yourself the question asked by the 1987 United Nations World Commission on Environment and Development: “Do our decisions compromise the ability of future generations to meet their own needs”? If your answer is yes, then your investments may not be sustainable.

 

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