A Critical Look at Canada’s Green Funds

Original SocialFinance.ca link: http://socialfinance.ca/blog/post/a-critical-look-at-canadas-green-funds

Lately, Iʼve been working to map and review the impact investment options for groups like Community Foundations of Canada and the Walter & Duncan Gordon Foundation.

Although Iʼve found dozens of amazing investment vehicles that achieve a strong financial return in addition to creating a lasting social and/or environmental impact, greenwashing is one area that sticks out as a problem.

Environmental funds provide a wonderful hedge against rising prices of energy and pollution, while also growing sectors of the economy that contribute to a greener, healthier future. They provide diversification away from traditional sectors, towards innovative high-growth sectors. Unfortunately, many funds that promote themselves as “environmentally friendly” are actually holding companies that are environmentally destructive.

Below are Canadaʼs green funds with their top 10 holdings:

TD Global Sustainability

  • Nike Inc.
  • Rio Tinto PLC
  • Procter & Gamble Co.
  • Banco Santander (Brasil) SA
  • Novartis AG
  • Rotork PLC
  • Flowserve Corp.
  • BHP Billion Ltd.
  • BG Group PLC
  • Praxair Inc.

Desjardins Environmental

  • Royal Bank of Canada
  • Talisman Energy
  • Toronto-Dominion Bank
  • Suncor Energy
  • Potash Corp. of Sask.
  • CIBC
  • Barrick Gold Corp.
  • Research In Motion
  • Teck Resources
  • Kinross Gold Corp.

Investors Summa Global Environmental Leaders

  • Ceres Power Holdings
  • SMA Solar Technology AG
  • Pure Technologies Ltd.
  • Hansen Transmissions International NV
  • Alliance Grain Traders Inc.
  • Google Inc.
  • International Business Machines Corp.
  • Computer Modelling
  • Nalco Holding Co.
  • United Natural Foods Inc.

Greenchip Global Equity Fund

  • Siemens
  • Alstom
  • Schneider Electric
  • Infigen Energy
  • Faiveley
  • Tomra Systems
  • ABB
  • Veolia Environmental
  • MEMC
  • LSB Industries

Acuity Clean Environment

  • Cummings Inc.
  • Johnson Controls Inc.
  • Secure Energy Serices Inc.
  • Pall Corp.
  • GLV Inc.
  • Azure Dynamics Corp.
  • Praxair Inc.
  • United Natural Foods Inc.
  • IESI-BFC Ltd.
  • MacDonald, Dettwiler & Associates

As you can see, many of these funds include companies that would make an environmentalist shudder. Moreover, many of these companies are found in traditional funds, thereby negating any hedging or diversification benefits.

If youʼre thinking of investing in a green fund that will enhance your portfolio AND help create a more sustainable future, be sure to examine their holdings. You might be
surprised at what you find.

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Don't let your money do things you wouldn't