Our podcast episode today had Tim Nash, "The Sustainable Economist" as a guest to talk about socially responsible investing. Tim had some interesting arguments on how choosing sustainable investments can increase the cost of capital for the "bad companies" which may affect their behavior.
He also argued that changing your portfolio can have a much bigger environmental impact than changing your own behavior. For example, if you have a green portfolio but drive an SUV, you're still net positive. The concept is that because so much of the environmental impact comes from corporations vs. individuals, not owning bad corporations can dramatically reduce your individual carbon footprint.
However, this is challenging philosophically. For either action to have an impact (individual actions or avoiding bad companies) they have to be done at scale by a ton of people. One person not driving an SUV has no impact globally, but neither does one person not owning oil companies. These things need to happen at scale to effect change.
Tim also offered some feedback on Wealthsimple's socially responsible portfolios. In short, they consist of various "socially responsible" products, but by trying to appeal to every definition of socially responsible, they are likely to be unsavory for most definitions of social responsibility.
Tim shares a vast amount of knowledge and ideas with us on how investors wishing to put their money where their heart is can go about investing more ethically and sustainably. We hear about Tim's journey into investing and economics and how he wound up doing the work he currently does, helping investors clarify where their money is going and how to put it portfolios that are more aligned with their beliefs. He unpacks how these ideas and actions can have an impact and what it would take for some kind of systemic shift towards more sustainable industry and companies. We discuss the use of other modes of change as well as the personal practice of investors versus the placement of their money. Tim does such a great job of explaining how he goes about assessing different companies and portfolios and filtering which meet the criteria that he would suggest to his audience. The last part of the episode contains a really impressive argument from Tim around how investing this way can also be beneficial for strictly economic reasons and that it would suit all people to consider the factors he is espousing. For an inspirational chat with a truly great guest, listen in today!
Key Points From This Episode:
• Tim's education and how he became The Sustainable Economist. [0:01:49.6]
• The actual service that Time provides for his clients and audience. [0:04:18.1]
• How does this type of sustainable investing have an impact? [0:05:41.9]
• Considering the efficacy of other means to bring about change. [0:11:06.4]
• Squaring personal practices and investing principles of an individual. [0:14:37.3]
• The criteria that Tim uses to assess items in a portfolio. [0:21:17.1]
• Tim unpacks his experiences of anarchist portfolios! [0:28:54.8]
• Allowing ethical investors to feel good about their portfolios. [0:31:50.6]
• The usefulness of so-called ESG screening for finding robust companies. [0:33:41.3]
• The twofold imperative to ethical and sustainable investing. [0:38:11.2]
• The product landscape for investors building sustainable portfolios. [0:40:57.8]
• How Tim helps people through his fee for service planning. [0:45:48.2]
• Tim's own definition of success! [0:47:44.6]
• And much more!
Links From Today’s Episode:
Tim Nash on Twitter — https://twitter.com/timenash
Good Investing — https://www.goodinvesting.com
Dalhousie — https://www.dal.ca/
Unilever — https://www.unilever.com
'Co Power Study infographic' — https://blog.copower.me/news/your-portfolios-dirty-secret/
Mark Carney — https://www.bankofcanada.ca/profile/mark-carney/
Wealthsimple — https://www.wealthsimple.com
Northwest Ethical Investments — https://www.neiinvestments.com
ExxonMobil — https://corporate.exxonmobil.com/
Michael Jantzi — https://ca.linkedin.com/in/michael-jantzi-5729312
Sustainalytics — https://www.sustainalytics.com
Enbridge — https://www.enbridge.com/
SNC Lavalin — https://www.snclavalin.com/en
Warren Buffett — https://www.forbes.com/profile/warren-buffett/#45dece364639
Horizons — https://horizons.gc.ca/en/about-us/