Pro-Planet Pensions

Making changes to reduce my carbon footprint feels good. At least I am doing my part by biking more, using public transit, turning down the thermostat, reducing waste and growing lots of vegetables. Then I read an article in Corporate Knights, a magazine that promotes clean capitalism. The average Canadian, it reports, does more climate damage through their investments than they do with all the other actions in their daily lives combined. Sigh! While I am careful about my personal investments, pension funds have a poor environmental record, according to a recent study.

To add to my guilt, I learned that clean investments provided above average returns in the last three years. The need for return on investments is no excuse.  A new tool called the Decarbonizer allows investors to evaluate how much their investment account contributes to climate change. Then it shows the results if the worst polluters are removed and replaced with companies working to reduce climate change. In most scenarios, the returns on responsible investments are as high as polluting ones.

What we leave behind
Digging deeper, research shows that large pension funds who consider environmental impact when they select investments are also doing as well or better than those that do not. But many are slow to change. One reason is resistance to change. I recall proposing to add stewardship of creation to the investment guide for the Christian Reformed Church in North America’s pension fund when I was a member of the Board of Trustees. CRCNA pension policy lags far behind other churches, but resistance won and no change was made. Another reason pension funds are slow to change is that the laws governing fiduciary responsibilities to their clients discourage or even prohibit consideration of environmental and social costs in their decisions. Manitoba and Ontario have improved their laws, but the federal government has not, in spite of claiming to be a leader on climate change.  

This gets to the religious core of the issue. As long as doing damage to creation is not considered a cost when we measure gains and losses, our economic system rewards pollution instead of responsible behavior. All of us get caught up in dirty capitalism because our pension funds are tied into a system that disregards taking care of the world we depend on and leave behind for our children.  

The good news is that there are a growing number of impact investment funds that make positive choices to invest in companies that are working for the changes we need to have a more responsible economy. It is also encouraging that responsible investment funds, such as the Clean 200 and the Global 100 Most Sustainable Corporations in the World Index, have outperformed comparable investments that do not pay attention to environmental impact. Impact investing requires focused attention, but it pays to know that my investments and my daily actions both contribute to care for God’s world.  

Author

  • Kathy Vandergrift, a public policy analyst, brings experience in government, social justice work and a Master’s Degree in Public Ethics to her reflections.

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