"We are pleased to announce the release of the 2022 Canadian Responsible Investment Trends Report! This year’s report confirms that RI’s recent momentum is giving way to demand for sophistication and more vigilant reporting, signaling a maturing industry.
With its updated methodology, the report affirms that RI is entrenched in Canada, with reported assets under management at $3 trillion, and 94% of respondents using ESG integration as an RI strategy. This marks the emergence of a reliable baseline for RI market share and demonstrates that ESG Integration is a fundamental tool in Canadian investors’ decision-making.
• The vast majority (94%) of respondents are using ESG Integration, with investors using more RI strategies than ever before. • Respondents' top three reasons for considering ESG factors are: (1) to minimize risk over time, (2) to improve returns over time, and (3) to fulfill fiduciary duty. • Survey respondents consider the top deterrent to growth in RI to be mistrust or concerns about greenwashing. • The three most prominent RI strategies by AUM are: (1) ESG Integration, (2) Corporate engagement & shareholder action, and (3) Negative/exclusionary screening. • Climate change is an overwhelming concern for responsible investors–-who also believe it is the greatest driver for growth over the next two years. "
Came across this article in my email box this morning
"Sustainable investing is often misunderstood. Many investors think a sustainable agenda limits a portfolio to a narrow piece of the market. In fact, plenty of stocks can help investors create social benefits while generating strong returns—if you know how to find them."
and I was reminded why I like them ESG and SRI in our client portfolio's .
“Altria will pay a USD$2 billion bonus to Juul's 1,500 employees as part of the price for its stake in the e-cigarette maker. While that averages out to USD$1.3 million a head, actual payouts in the form of special dividends will depend on factors such as longevity at the company, CNBC says. The maker of Marlboro cigarettes is paying a total $12.8 billion for a 35% stake, valuing the California startup at $38 billion. Juul recently said employees can only vape outside company facilities to conform with laws governing the use of tobacco in the workplace. • Here’s what people are saying.
Wow, nice vice bonus 1.3 million average for 1500
Many may know, in our own area in Smiths Falls, Canopy Growth has created over 100 millionaires that work at this local company. I understand everyone that works there is a shareholder of some sorts. Those early employees got vested early and have benefited immensely for working their buts off and taking a chance on a new industry.
Employees investing in the company they work for is a very good thing. I see many examples of this happening with those that are public companies and some private companies. Good lessons here for private companies and employees to work towards.
"On June 20, 2018, Bill C-45 – The Cannabis Act – was passed,with the expectation that Canadians will be able to legally consume recreational cannabis without criminal penalties by October 17, 2018. Canadian cannabis stocks surged on the news, with Canopy Growth gaining almost 6% in one day. Year to date,2 Aurora Cannabis Inc. and Canopy Growth Corp. have been the second- and fourth-most active stocks, respectively, on the TSX.3 Over the same period, stock prices for both companies have been volatile — Canopy’s price has ranged from as high as $47.76 to as low as $24.11. All this suggests that investors should exercise caution before jumping onto this bandwagon. But beyond concerns about volatility and returns, should responsible investors climb aboard?
NEI’s ESG Services Team has developed a position on cannabis by examining:
Where cannabis fits under our evaluation process by comparing it to products with some similarities, including tobacco, alcohol and prescription medicine.
The state of the regulatory and market environments.
The environmental, social and governance (ESG) risks that are most material to cannabis companies.
As responsible investors, we seek to generate sustainable value for shareholders and other company stakeholders, as well as for society as a whole. As such, we need to determine whether the cannabis industry has the potential to create sustainable value, which ESG risks are inherent to the industry and whether cannabis companies are adequately positioned to be responsible stewards of their products and services."
There is lots more in the report for consideration, 9 pages of
Material Risks tht cannabis companies will have to prioritize ESG concerns top of mind
Environmental: Growing cannabis requires optimal conditions of temperature, humidity and light intensity; hence the bulk of cannabis is grown indoors (without natural sunlight) or in greenhouses. Both methods are extremely energy intensive, resulting in potentially large carbon footprints; and water intensive, resulting in environmental and social risk from wastewater discharge and drawing excessive groundwater in water scarce regions. Most cannabis companies that acknowledge ESG risk in their MD&A disclosure focus on environmental and climate change risks, which we view positively. Social: Quality control and product safety are the most significant social risks for cannabis producers. Cannabis has to meet certain quality standards — tested and monitored by Health Canada and the FDA — and must not contain pesticides, heavy metals, fungi or bacteria. Product safety has been under greater public scrutiny since medical cannabis provider Organigram (recently acquired by Canopy Growth) had to recall some of its products because of contamination with a banned pesticide.19 The company faces several class-action lawsuits as a result, after patients reported suffering from severe nausea after daily use of the contaminated product.The nature of the product presents a second significant social risk. The Canadian Medical Association has stressed the need for access to substance abuse and mental health services to be expanded. The federal government has committed $62.5 million to cannabis education programs for youth.22 In addition to federal and provincial contributions, cannabis producers will likely be required to contribute to education and addiction treatment programs, in the way that producers of alcoholic beverages participate in and spearhead programs for alcohol addiction and impaired driving education. Thirdly, cannabis companies state that a positive public perception is crucial to achieving the social licence to operate. We agree and, as such, identify responsible marketing and post marketing co-vigilance policies and practices as another key issue for cannabis producers. Governance: As stated earlier, cannabis companies have experienced unprecedented growth over the last year and, as a result, have found it challenging to scale up their corporate governance controls to keep pace with that growth. As the industry will be heavily scrutinized by regulators and may be prone to criticism from the public, cannabis companies need independent and qualified board oversight to provide accountability to stakeholders, including investors. Proper corporate governance controls can assist in bridging the credibility gap in this new industry.
I came across another commentary that wasn't focusing on the ESG aspects but the "new industry component" from Gaurdian that was recently put out, it's an interesting read ......https://www.guardiancapital.com/media/61435/gca-q3-2018-commentary.pdf
"By now every reader will likely be aware that Canada is about to legalize the recreational consumption of cannabis in October, becoming one of just a handful of nations to have done so. A level of buzz (pun intended) surrounds the industry, currently with 118 licensed medical cannabis producers, of which several dozen are publicly-traded in Canada. The largest of these have posted spectacular returns, rising between 200% and 500% over the past year alone. One, by virtue of uniquely gaining a NASDAQ listing south of the border during the quarter, rose more than tenfold in its initial two months of trading. At its heights, the company, yet to turn a profit, had a market valuation greater than household Canadian names such as Loblaw, Fortis, Husky Energy and Canadian Tire. To a degree, the euphoria is understandable: it is uncommon to witness the birth of an entirely new industry. There are, however, periodic historical reference points, such as the rise of the automobile at the start of the 1900’s and the dot. com euphoria near the end of that century, and like all other precedents, the legalization of recreational cannabis shows potential. It is also worth revisiting how these prior episodes all played out, with an initial period of excitement that results in sharply rising stock prices, and a growing list of participant companies able to fairly easily attract investors into newly listed shares. Almost invariably, a level of industry overbuilding results, with too much capacity added from this initial group. From there, an interval of re-sorting takes place, as stock prices subside, weaker competitors exit or merge, and a much smaller collection of survivors move forward. For example, in the early 1900’s, during the initial days of transition from horse to car, there were an estimated 2,000 automobile manufacturers in America, but the list had been winnowed to essentially three over the next twenty years. Another example might be, the estimated 90 million miles of fiber-optic cable installed across America during 1999, in anticipation of a coming internet boom. The boom eventually did materialize, but for the first three years, 95% of this network lay “dark” and unused, and the major players backing its installation had ceased to exist. At this point, valuing these recreational cannabis producers requires making some assumptions on end market demand, wholesale pricing, and production costs. Beyond this, factors such as consumption growth, regulatory regime and international factors – both in terms of possible demand, and new competition – must be weighed. Finally, once all of this is considered, a view on valuation is required. Given the list of risks at the current stage, an ample margin for error should be demanded before moving forward with an investment. Simply basing an investment on an optimistic industry view alone can backfire, even picking the eventual winners is no guarantee of short-term profits. Consider those who bought shares in technology hardware company Cisco, commonly considered a provider of the “plumbing of the internet”, in the late 1990’s. These investors were correct in their estimation that the company would go on to prosper from rapidly growing data consumption: company revenues, at just over $12 billion in fiscal 1999, had risen to over $49 billion in the most recent annual set of results. However, a lack of discretion on valuation means these buyers near the peak are still looking to recoup their initial investment, over fifteen years later.
At Guardian, we look to invest in companies with sustainable competitive advantages, strong management teams, and a proven record of superior financial performance. These are necessary ingredients when attempting to value securities for consideration. By definition, this makes it difficult to commit to investments in brand new industries where there is an absence of reference points regarding pricing, costs, end market demand, to say nothing of regulatory constraints. Until these materialize, it is certainly possible that a chosen cohort of stocks continues to levitate, supported by faith and a lack of data to refute speculation. This therefore, is the essential difference: pot stocks – like cars and tech companies – represent a speculative bet rather than an investment. There will be winners and losers in this space; companies that learn how to operate publicly, stay onside with regulations, balance growth and stability, will be the winners. Which constituents of this new subset of healthcare companies will operate profitably and sustainably is unknown today. We want our clients investments to go up, just not “Up in Smoke”.
Reading all this, I know a few people who have done very well speculating on their own in our community, so far. It reminds me of this song from Rascal Flatt's , it could be a two edged sword, out too late or staying too long. Courting pot stocks has a lot of ..... these days
Received this email this morning and as normal it gets me thinking, what are we doing at Brock Shores Financial ? How are we #ImprovingFutures ? How are our actions lining up with our Vision, Mission and Core Values ?
One thing that we do is research and become aware of the issues and work towards putting sustainable practices in our business and life. A great resource for me has been my membership in RIA Responsible Investment Association https://www.riacanada.ca/timothy-ross/
I would love to read what you are doing to make a difference in your life, home, community, please join our online community and share your reflections in the comment section , your Utmost For Your Highest
In the meantime, let's read what Coro Stranberg has to say about the matter.
Have a blessed day
Timothy Ross, Founder Brock Shores Financial
Coro Strandberg works with businesses, government and industry associations to envision and innovate a sustainable future. She is an expert on sustainability leadership and transformational business practices and relationships.
"Sustainability is no longer about doing less harm. It's about doing more good."
Jochen Zeitz (Co-founder and co-chair of the B Team and past CEO of PUMA)
I’ve been thinking about the word “good” and how it shows up in our language in countless idioms: For goodness sake. All to the good. Good and ready. Goodwill. For good reason. Good company. And so on. In my work, good – when turned into action – means sustainable businesses that change everything for the better.
Growing global resource constraints – coupled with changing customer, investor, and government expectations – will drive companies to change the way they do business. In this newsletter, I bring you up-to-date on sustainability tools, trends, tips and trailblazers that can help you and your organization become a force for social good. Whether your organization needs a kickstart or it’s leading the way with transformational business practices, you’ll find lots of good news here.
2018 is trending as the watershed year when boards began to actively improve their oversight of the company’s social and environmental performance. Regardless of whether the impetus was scandals, investors, social movements, employees or consumers, more and more boards are taking their fiduciary responsibilities in this area seriously. Fortunately, there is considerable guidance in this new governance practice.
This spring I started teaching the Sustainable Board module for the new Governance Professionals of Canada certification program. The course provides a practical look at board sustainability oversight for governance professionals who advise boards and management on sustainability governance. This will equip corporate directors and executives with greater insight on how to steward the sustainable performance of the firm. Corporate governance leaders also have a sustainable board roadmap in a recently published white paper I authored on the topic for Conference Board of Canada. It's an update on the trends and drivers of sustainability governance that have emerged since the first paper I wrote on the subject in 2008, and provides a sustainability toolkit for boards and those who advise them. Check it out and share these resources with the boards and governance professionals you know.
Business Models for Good
Boards for Good are responsible for ensuring their business has a core social purpose as its engine for growth and goodwill. Businesses are defining and articulating their humanitarian reason for being. The United Way of the Lower Mainland is a leader in this global trend and in so doing, pivoting its corporate donor relationships. This spring I helped the United Way launch its Social Purpose Institute, growing business for good in Greater Vancouver and beyond. Uniquely, the Institute’s vision is to partner with cities, boards of trade and others to raise awareness of this business opportunity and build the regional capacity for social purpose business. In this way, business will bring all its assets, not simply its donations to community good.
Leveraging University Assets for Good
This trend towards leveraging assets for good is taking off in the public sector, too. To advance the widely acclaimed white paper I wrote for McConnell Foundation and SFU on "Maximizing the Capacities of Advanced Education Institutions to Build Social Infrastructure for Canadian Communities" published in 2017, I have been helping the McConnell Foundation and the Canadian Association of University Business Officers (CAUBO) scale social purpose administration and finance among administrative departments at Canadian universities and colleges, info here. The basic premise is that public institutions can bring all their assets and instruments (in addition to teaching and research) to advance societal well-being by applying a social, environmental, community or stakeholder lens to decision-making, budgets and projects. University administrators are finding new purpose and meaning in their jobs from this shift. According to one front line university staff member: "This [social purpose administration] is a new way of working. As administrators who spend our careers in our institution, we can see a tie to our organization. It is also tied to the place where you live. It is another use of your job. It gives me meaning in my day."
Professionals for Good
Not only are governance professionals and university administrators social-purposing their jobs, so too are other professionals looking to build more social value into everyday roles. Since the launch of the Sustainable Professional Association Initiative with The Natural Step, I have had the pleasure of advising associations representing human resources and governance professionals. Current work involves a project for the Real Estate Foundation of BC to define a professional development pathway to build sustainability expertise among realtors. Watch this space for the research paper in early 2019.
This work has me thinking about the "Purposeful Professional": I believe that purpose-driven companies and organizations are creating room for professionals to hone their personal purpose and bring it to work.
Products for Good
Organizations-for-good offer products-for-good. While not easy to go the distance, it can be done as described in this Conference Board of Canada resource I wrote on the topic. Notably, leaders like Marks and Spencer, BASF and LafargeHolcim are setting ambitious targets to reposition their product portfolios in alignment with a sustainable future. This Sustainable Brands article profiles these opportunities. For more detailed guidance, check out the Conference Board paper.
Advocacy for Good
Having a business model, professionals and products for good doesn’t guarantee a sustainable future. We also need government leadership to re-engineer policy, legislation and regulation so that fair, inclusive, low-carbon and circular growth can be enabled. Fortunately, more and more businesses are engaging in the public policy debate, as for-good advocates. This GreenBiz article unpacks this trend and drivers, while this tool offers an "advocacy for good" continuum, from oppositional to transformational practices. Check it out to see where your organization lies. Then engage your government and industry relations teams in how they can bring purpose and meaning to their jobs through a proactive sustainable public policy agenda.
That’s the goods for this newsletter. I always appreciate hearing from my readers. Don't hesitate to contact me for questions, clarifications or additional resources. Thanks for reading. Goodbye for now!
Good for you
Corporate Sustainability Practitioners: Roles have changed, has your job description?
November 15, 2018 at 11:00 am PT / 2:00 PM EDT
This one-hour, low-cost webinar will discuss how the corporate responsibility practitioner role is becoming more strategic, enterprise-wide, and external. You’ll pick up insights on how the jobs, roles, and departments of CSR and sustainability practitioners are adjusting to meet the new imperatives. More information.
Phoenix Arizona, Feb. 26 – 28, 2019
I hope to see you at GreenBiz 2019, the Premier Annual Event for Sustainable Business Leaders. I will be moderating a session on "What every sustainability professional should know about board sustainability governance," with investors, corporate directors and sustainability professionals represented on the business panel. You’re guaranteed a thought-provoking and practical session. More information.
A picture is worth a thousand words, video's will multiple that , check out her Webinar Library