The ongoing disaster in the Gulf of Mexico has brought a basic principle of SRI into clear focus. Companies that ignore environmental and social risks put their financial bottom line in peril. BP’s shares are on a downwards spiral and now worth half of their pre-spill value. The lower the share price falls, the better the lesson will be learned.
This leads me to be reading a prospectus for a long-established Canadian Environment Fund. The company offers shares of environmentally conscious Canadian corporations, more specifically corporations which, through their operations and orientation, make a significant contribution to safeguarding and improving the environment.
The top ten holdings of this fund include four of Canada’s biggest financial institutions, plus Suncor, Potash Corp, Teck Resources, and Talisman Energy. Banks, oil, fertilizer, coal, copper, and zinc. That’s what you get with this particular ‘environment fund’.
It’s no wonder that words like ‘doublespeak’ and ‘greenwash’ have worked their way into the dictionary. In the view of most socially responsible investors, this is just not good enough. Many so called ‘green’, or ‘environmental’, or ‘ethical’ investment funds are not nearly rigorous enough for their prospective clients.
I know that socially conscious investors can do better than this. There are scores of publicly-traded companies contributing to a more sustainable future, whether by the nature of their business, the size of their footprint, or the core values that they hold.
Over the past 10 years I have compiled a list of 40 publicly-traded companies that meet a more scrupulous application of socially responsible, ethical, or green investment. One can build an SRI stock portfolio with maybe 15 to 20 of these companies. There are countless combinations to suit one’s investment goals and personal values.
I’m not saying that all of these companies are going to save the world. Their contributions may be somewhat benign or difficult to measure. For example, to the extent that the internet, or the IM feature on our mobile phones has allowed us to make easy connections with friends and family, then I’m all for it. When I was young I recall paying $1 a minute for a phone call from one province to another. Now I can live chat as long as I want with my niece who is 3000 km away, exchange photos and video, and stay much better connected to her life. I think that is a net benefit to society.
These are companies that have efficiency ideas in a carbon constrained world. They make LED lighting, or energy saving devices, or have developed technologies that allow engines to better burn biofuels. They sell herbal teas, fairly traded foods, and non-GMO soya. They provide you with the media of your choice, movies, music, internet and telephone. They own and manage a local grocery store, car dealership, and home improvement center. One is Canada’s largest bicycle manufacturer and distributor. Their businesses include coffee and carpeting, cars and trains, wind turbines and trees.
Many of these companies will pay you a quarterly dividend, and allow you to vote on important company affairs. The price of their shares will of course fluctuate, sometimes wildly, based upon which way the herd is running on any particular day. This list is neither comprehensive nor complete, so I invite your feedback, comment, and ideas.
Many companies have learned what happens when the dogs of public sentiment come barking up their shorts. The ones that refuse to adapt to changing societal values tend to fizzle away and die. Others have adopted sustainability as a core business philosophy, and have grown stronger and prospered.
Well I’m left with room for only 3 names out of my 40. How about Cree, Westport, and Dorel? Check this space regularly, for I will profile these three, and the other 37, in upcoming issues of this publication.