Millennials: Aligning Investment Portfolios With Values

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How do you assess Canada’s performance in terms of its emission reduction commitments and what are the factors influencing it?

I do not think we are on track to meet our Paris Agreement targets and most third parties from the UN and others have pointed that out as well. The good news is that there are two easy trends that are helping us accelerate our ability to be on track. One is government policy; we need to implement the carbon tax across the board and consider specific renewable energy and clean energy policies at the provincial level. The latter will be especially important in Alberta as it phases out coal over the next decade.

“We need to implement the carbon tax across the board and consider specific renewable energy and clean energy policies at the provincial level.”

So on the one hand, government is giving a bit of an emission reduction push, but on the other, the private sector’s ability to pull is increasing. It is deploying and investing in more clean energy on both the large scale, and more and more on the smaller scale, specifically in the distributed energy systems we use in our homes, businesses, buildings and communities.

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How is Canada positioned internationally when it comes to renewable energy, considering that we are largely known for fossil fuels?

I think that Canada has amazing DNA for clean and renewable energy, starting with our expertise in hydropower. Since the implementation of the Green Energy Act in Ontario in the late 2000s, there is a whole new breed of professional developers and financiers with expertise in clean energy. We are now using our expertise in solar and wind energy in Canada, and also exporting that knowledge to other countries in Asia, Africa, South America and elsewhere.

“We are now using our expertise in solar and wind energy in Canada, and also exporting that knowledge to other countries in Asia, Africa, South America and elsewhere.”

There are two components to renewable energy. Firstly, Canada’s universities and researchers are building new technologies to deploy better systems, better processes and better products. Secondly, our financiers are strengthening our ability to build big projects like solar projects, wind farms and geothermal installations. So, that is a different skillset, which meets a different need.

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Is Canada a global leader, laggard or middle of the pack in the green bond space? How is this financing being used to develop our renewable energy industry and what more must be done to further develop green bonds in Canada?

Canada is definitely on the leader side. Both Ontario and Quebec have come out with green bonds to support green infrastructure. Large solar projects in Ontario have issued solar-backed green bonds as well. We have seen banks such as TD put out a green bond to support its green portfolio of loans.

In addition, companies like CoPower are issuing green bonds that support community-scale and distributed clean energy projects. We work in the clean energy sector to bring different types of capital to help deploy more projects. Our bonds also help people that are building geothermal and projects focused on energy efficiency get the financing they need. We have a green bond product that we sell on our online platform, which helps us reach more investors and make these financial products available to a larger group.

“We need to encourage both the federal and provincial governments to use green bonds to help build more green infrastructure at the macro level.”

We need to encourage both the federal and provincial governments to use green bonds to help build more green infrastructure at the macro level. Moreover, we must get Canadian companies and banks to use green bonds to deploy more loans and investments to build clean energy across Canada.

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What factors are shaping the future of green and impact investing in Canada?

More and more investors are looking to align their portfolio with their values. So, we are really excited to help move the investment industry to be a force for good as it relates to building a low carbon economy. We want to deploy another hundred million dollars into clean energy and, on top of that, help build these nascent sectors.

“The financial sector is going to have to also consider impact because the return profile of clean energy and impact investments has been consistently shown to meet, if not exceed, companies’ return targets.”

Secondly, millennials are inheriting the largest transfer of wealth that has ever happened in human history. They are also much more attuned to social and environmental factors in their investment decisions. Moreover, the financial sector is going to have to also consider impact because the return profile of clean energy and impact investments has been consistently shown to meet, if not exceed, companies’ return targets.

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What advice would you give to other young Canadian entrepreneurs?

The most valuable pieces of advice that I found at the beginning of my journey, apply just as much today; it is crucial for young entrepreneurs to be really passionate about an idea and find mentors that are willing to sit and give you advice to help channel that passion.

This also applies to older entrepreneurs. Even though they start from a much deeper base of experience, starting something is very hard. Getting advice from people that have gone through the experience can put your experience within the context of more people and longer time frames. It can also help you come to the right decisions on your own with help from their experience.

“It is crucial for young entrepreneurs to be really passionate about an idea and find mentors that are willing to sit and give you advice to help channel that passion.”

The biggest challenge for CoPower was getting the first couple of proof points based on our ideas. Finding those first couple of projects and the first couple of investors to give us the initial traction was the hardest part. We literally wore down our pair of shoes running around Metro Toronto meeting people, but we came with passion mixed with a plan to execute. We are always surprised about how many people were willing to give us a half hour to listen to our story or how many people were willing to work with us. We came back six months later and said, “Hey, you know the two things that we said we are going to do? We did them.” Once we were able to constantly show traction, we built our reputation as a reliable company. There are different types of mentors who helped along the way, some with time, some with advice, some with opening doors, and some with capital.