Authored By: Paula Glick | Date: July 18, 2019
Last month, on June 14th, the Canadian Expert Panel on Sustainable Finance released its final report, ‘Mobilizing Finance for Sustainable Growth.’ The panel was appointed by Canada’s minister of the environment and climate change, Catherine McKenna, and minister of finance, Bill Morneau. The report observes that the sobering reality of climate change is upon us and argues that the finance community must play a critical role in supporting the transition to a low carbon economy.
The report makes specific recommendations for the asset management community, including, recommendation number 10, to “Promote sustainable investment as ‘business as usual’.”
Active money managers are often perplexed by the notion of integrating environmental considerations into their investment processes. To many, it means changing the way they think about investing. But, it is not. It is simply about viewing climate change as the investment risk and opportunity it truly is.
On the risk side, it is incorporating information and analysis to understand the potential impacts of regulatory change, legal action, reputation, and other factors on corporate performance. On the opportunity side, it is recognizing shifts in consumer and investor preferences and understanding how technology and innovation are addressing climate change while creating new areas of competitive economic activity.
Practically speaking, it could mean approaching investing from a thematic point of view, such as investing in leading wind farm technologies or government-backed green bonds. It can also mean identifying and avoiding investments in companies that are not able to adapt to climate change regulation and are more at risk of stranded assets.
For active managers it means identifying companies that truly integrate environmental consideration within their core planning, management and governance principles. Research demonstrates that these companies tend to perform well relative to their peers, with respect to share-price or future profitability. Indeed, firms that understand the full life cycle of their products and services and incorporate long-term sustainable thinking into their core values, are those that are recognized for their strong overall leadership and integrity.
As the Sustainable Finance report states, “Canada has the means and the opportunity to stand among global leaders as a decision-maker rather than a decision-taker in the global market for sustainable products, services and investments.” We must view the report, not as an environmental report, but as an economic report. And asset managers should ask themselves how they are responding to recommendation 10, and if they are “business-as-usual” or seeking competitive advantage through sustainable investment.
Paula Glick is co-founder of Honeytree Investment Management.
Authored By: Christian Hanson | Date: June 3, 2019
As a former professional hockey player, I’ve had many conversations over the years with teammates about what the future may hold. The conversations always included some variation of the following bottom line: ‘What am I going to do when I am done playing? I’ll figure it out when the time comes.’Read More
Authored By: Peter Gorham and Nichola Peterson | Date: May 24, 2019
(An abridged version of this article appears in the May issue of Benefits and Pensions Monitor.)
You may start to receive your Canada Pension Plan1 (CPP) retirement benefits any time between ages 60 and 70. You may start to receive your Old Age Security (OAS) benefits any time between ages 65 and 70. But when is the optimal age to start?
Authored By: Kate Woolerton & Rob Schuwerk | Date: May 10, 2019
A recent report estimated potential climate-related financial losses to the energy sector alone of between $1 trillion to $4 trillion. Climate-related risks are clearly material to the upstream oil and gas sector, and warrant disclosure.Read More
Published By: Invesco | May 10, 2019
Aligning your investments with your organizational needs truly takes a holistic approach.
Authored By: Simon Laxon | Date: March 21, 2019
On March 19, 2019, Liberal Finance Minister Bill Morneau tabled the Liberal government’s fourth budget and the last one before the next federal election. Below are some of the items of interest to employers, sponsors and administrators of pension and benefit plans.Read More
Authored By: Sonia T. Mak | Date: March 11, 2019
CAPSA, the association of pension regulators across Canada, has issued a new guideline on searching for un-locatable members and updated its guideline on defined contribution pension plans in February. The guideline on un-locatable members is relevant to all types of pension plans while the guideline on DC pension plan is relevant only to a pension plan which has a DC component.Read More
Published By: Published by HSBC Global Asset Management | March 10, 2019
Scenario analysis is a powerful way to explore policy and technology uncertainties within the low-carbon transition, which can present key sources of risk for investors. The six scenarios explored in this paper translate emissions reduction requirements into economic signals that affect financial sectors and the wider economy.
Authored By: Joe Hornyak | Date: March 7, 2019
The markets are in the early stages of a new sector paradigm where they will be adapting to a new set of rules, says David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates, However, most market participants are still playing by the old rulesRead More
Published By: | March 4, 2019
While no one disputes the value of these life-changing drugs, which use living cells to treat serious conditions, their cost relative to traditional, chemical drugs has been a challenge from day one. Seven out of the 10 topselling drugs in Canada are biologics, used to treat less than two percent of the population.