Investing to Save the World

Earth | Source: DonkeyHotey on Flickr via CC BY 2.0 LicenceThe following is a condensed, less academic excerpt of a paper I recently wrote for my final graduate course. It also represents the completion of Task #3 on my 9-Week Productivity Challenge and the conclusion of a series of posts here on Earth and Money related the social and environmental impacts of our investments. The series began two weeks ago with a look at an emerging type of investment vehicle, community bonds, then introduced how we might be funding our own demise, what corporate social responsibility represents, and whether ethical mutual funds are a better way to invest.

In the environmental health world, decisions are frequently made based on a concept called the precautionary principle. The principle states that in the absence of scientific evidence for the safety of a product or action, we should act on the side of precaution. This can be achieved through four central actions:

“Taking preventative action in the face of uncertainty; shifting the burden of proof to the proponents of an activity; exploring a wide range of alternatives to possibly harmful actions; and increasing public participation in decision making.” (Kriebel et al., 2001)

The reality is that this doesn’t apply exclusively to environmental health. In fact, as investors, we can enact the precautionary principle, to make better investment choices that promote a healthier, better world.

Continue reading

Like What You See? Share the Story!

Ethical Mutual Funds – A Better Way to Invest?

Question | Source: Valerie Everett on Flickr via CC BY-SA 2.0 LicenceThe following is a condensed, less academic excerpt of a paper I recently wrote for my final graduate course. It also represents the completion of Task #3 on my 9-Week Productivity Challenge and the beginning of a series of posts here on Earth and Money related the social and environmental impacts of our investments. The series began unofficially two weeks ago with a look at an emerging type of investment vehicle, community bonds, and last week, introduced how we might be funding our own demise, and what corporate social responsibility represents.

In 1992, Michael Jantzi founded Jantzi Research Inc., an investment research firm created to monitor the social, environmental and governance performance of publicly traded Canadian companies. Jantzi used a best-of-sector approach to rank companies relative to each other and to industry best practices. The fundamental problem with such an approach is that a company only has to be better than their peers in order to achieve a high ranking. This can result in a company that is not by most definitions “socially responsible” being labelled as such only because their peers are even less socially responsible than they are.

Continue reading

Like What You See? Share the Story!

Are We Funding Our Own Demise?

Daisy Demise | Source: jumpinjimmyjava on Flickr under CC By 2.0 LicenceThe following is a condensed, less academic excerpt of a paper I recently wrote for my final graduate course. It also represents the completion of Task #3 on my 9-Week Productivity Challenge and the beginning of a series of posts here on Earth and Money related the social and environmental impacts of our investments. The series began unofficially two weeks ago with a look at an emerging type of investment vehicle, community bonds.

Basic economics would dictate that public demand drives the success and failure of various enterprises. A company can only sell a product if someone desires it (though through good marketing, they can manufacture that desire as well). However, while average Canadians make greater strides towards environmental consciousness, they may be undoing their own efforts by bankrolling the very companies they are boycotting or attempting to avoid with their investments. In a nutshell, Canadians (and quite frankly, citizens worldwide) are funding their own demise by supporting companies which create unhealthy environments. This, in and of itself, is a major environmental health problem that has been grossly overlooked in the current environmental movement. When a consumer goes out of their way to purchase organic foods, what purpose does that serve if they have their money invested in companies that seek to produce unsustainable, pesticide-laced foods which only drive up the price of the very organic foods that they want to purchase?

Continue reading

Like What You See? Share the Story!

Seven Reasons for Renting over Buying

House | Source: Noa_Schek on FlickrYesterday, I was in my local public library, and I picked up a magazine focused on the local  real estate market. One of the articles was written by a couple who had recently sold their house in the city and started renting again. They claim that life has never been better. I devoured the rest of the article with rapt attention. I’ve been renting in the city for years now, ever since I moved here, as the Toronto housing market just seems unattainably expensive. But I’ve always had that nagging itch to buy and to own, to not have to deal with irresponsible landlords and leases. The article, though, reminded me of a lot of the good reasons to rent…
 
Like What You See? Share the Story!

Community Bonds – A Primer

Holding Hands | Source: katerha on FlickrIs it possible to invest in a sustainable and ethical fashion that promotes environmental health and a better world without resorting to mutual funds, or some other packaged investment? With the advent of community bonds, it is.

What are Community Bonds?

Community bonds are just what they sound like – bonds issued by local, community organizations (either a non-profit or a co-operative) to local, community investors. The investment funds provide the organization with either money to pay down existing loans that they may have, or to provide start-up capital for a potential project. In exchange, the organization agrees to pay a fixed rate of return on the investment over a fixed term, and to repay the investment at the end of the term. In Canada, depending on whether or not the bond offering has been approved by the Provincial investment regulator, the bonds may be eligible to be held inside an RRSP or TFSA.

Continue reading

Like What You See? Share the Story!