This guest article from Chad Park, Vice President of Sustainability & Citizenship, The Co-operators (Canada) was originally published on the Canadian content hub Innovating Canada. In the article, Chad talks about efforts to integrate and embed sustainability into everyday business at The Co-operators which is informed by the cooperative’s long-term vision. One of the ways The Co-operators does this is through its invested assets, all of which are assessed through a sustainability lens. We would like to thank Chad and Innovating Canada for their permission to share this article with ICMIF members.
The good investment: Impact investing and the business case for sustainability
2020 has shown us that complex challenges require ambitious and collaborative solutions. And while the pandemic is top of mind, issues like climate change, mental health and social inequality continue to demand attention. These challenges call on all of us to take a long-term view of success — not only for our organizations, but for people, communities and the planet.
At The Co-operators, our efforts to integrate and embed sustainability into our business are informed by our long-term vision. This includes our commitment to champion sustainability in the world around us. One of the ways we do this is through our invested assets all of which are assessed through a sustainability lens. An important part of this is our embrace of impact investing, which generates a strong return while addressing the world’s most pressing environmental and social issues.
Our impact investing journey
Our efforts began in 2015, with a commitment to invest between six and 10 per cent of our invested assets for positive impact. At the time, this goal was the most ambitious in the industry, with most companies investing no more than half a per cent. Since then, we’ve surpassed 20 per cent –representing over $2 billion for projects and initiatives that support environmental and social benefits. We plan to continue expanding our impact investing efforts in the years to come.
At the end of 2019, the projects and initiatives in which we’ve invested have resulted in strong positive impacts, for example, generating 258 million MWh in renewable energy – enough to power 10 million homes for one year. At the same time, we’ve consistently seen these investments generate above-benchmark financial returns.
Good for the planet, good for people, and good for business
Investing in a sustainable, low-emissions economy is simply good business. By investing in solutions to the challenges threatening financial security in Canada and globally, we strengthen an economy that will enable us to adapt to a rapidly changing world. This protects our collective strength and stability over the long term.
For the sustainable economy to flourish, we need a critical mass of investors to put their financial weight behind this movement. As other companies and investors participate, we can build the momentum and capital needed to fund solutions for the challenges we face from a changing climate, social inequality, volatile markets, and more. To this end, Addenda Capital, our institutional asset management company, launched Canada’s first Impact Fixed Income Pooled Fund to catalyze impact investing across the country. This Fund now has more than $85 million in assets, and growing.
Through impact investing and other types of sustainable investing, we can de-risk our economy and communities by building more resilient infrastructure, stronger housing, better food security, mental health supports, and more.
Our experience shows that none of this comes at the expense of the bottom line. It makes all of us stronger, more stable, and better equipped to navigate challenges in our midst. It enables us to support the needs of our clients and communities today, and to protect their prosperity and well-being long into the future.