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The green economy is here and there's money to be made, expert tells business forum

Tim Nash, the Sustainable Economist, spoke in Sudbury as part of 2019 Business Forum
Tim Nash is the founder of Good Investing and is known as the Sustainable Economist. He's in Sudbury today to speak at the 2019 Business Forum. (Supplied)

The green economy is here, and it's bigger than anyone realizes, said the founder of Good Investing.

Speaking to delegates at the Good Investing: The Green Economy Is Here conference Nov. 7, Tim Nash, a.k.a. the Sustainable Economist, said that's the main point he hoped to drive home during his presentation at the 2019 Business Forum being held in Greater Sudbury on Nov. 7. 

Nash is an expert on socially responsible investing, impact investing, and the green economy. He is regularly featured in publications such as CBC’s “The National,” BNN Bloomberg’s “Market Call,” and the Globe and Mail. 

The green economy is defined as an economy that is low-carbon, resource-efficient, and socially inclusive. Businesses of all sizes, as well as governments and municipalities recognize that the transition to a green economy is in the best interest of the environment, the future and their bottom line. 

“A green economy and socially responsible investing means different things to different people,” Nash said in a phone interview. “Socially responsible investment has evolved over the past 20 years to a point where it is now environmental, social and governance (ESG). People still want to screen out certain sectors and companies for ethical reasons, but in addition, we're starting to analyze these companies based on these ESG metrics.”

It's gone from a sort of ethical investing to a concept of sustainable investing where investors use this ESG criteria to decide where they want to put their money, said Nash. What he said investors are finding is companies with high ESG scores have higher financial performance (or return on investment), so now people are starting to realize there's money to be made by investing in companies that are (ESG) leaders within their sector.

“Over the last five years, we are now starting to see the big investors — such as the Canadian Pension Plan and the Ontario Teachers' Pension Plan, to name a few — realize the money that can be made by aligning their portfolios with the values of the ESG criteria,” Nash said.

On the flip side, more and more companies are starting to realize investors are looking for these high scores, he said. Some of the most progressive companies are actually starting to tie in executive compensation to ESG performance – things like bonuses for the CEO are dependent on meeting the ESG criteria.

The Responsible Investment Association (RIA) released results of a survey that examined Canadian investors’ perspectives on responsible investing, which incorporates ESG factors into investment decisions. 

The survey data, collected from 1,004 individual investors by Ipsos, finds continued growth in investor interest in and knowledge about responsible investing. 

More specifically, the survey found 72 per cent of the respondents expressed interest in responsible investing, up from 60 per cent in 2018. 

Overall, 26 per cent of respondents currently hold responsible investments. Young people are at the forefront of responsible investment ownership, with 36 per cent of respondents aged 18-34 owning responsible investment portfolios, compared to just 18 per cent of those 55 years and older.

Also, knowledge continues to lag interest, however, 72 per cent of respondents know little or nothing about responsible investing, an improvement from 81 per cent in 2018. 

Furthermore, 79 per cent of respondents would like their financial services provider to inform them about responsible investment options. However, only 23 per cent of respondents have been asked by their provider if they are interested in responsible investment options.

“We are trying to show that investors are catching on, and that a lot of the 'smart money' is already moving in this direction," Nash said.

As founder of Good Investing, Nash said his goal is to help one million Canadians learn how to invest online, and make intentional decisions about what they're investing in. His presentation will also highlight areas of untapped opportunity for small business owners and not-for-profit organizations.

“We’re at a point in history where the green economy exists, and it is profitable,” said David St. Georges, program manager for Green Economy North. “Investing in green infrastructure and organizations with sound environmental practices isn’t a pipe dream anymore. Opportunities are abundant for the average person and business, and they’re worth exploring.”

This event also highlighted local success stories related to sustainable investing, and what Green Economy North can offer to business owners in northeastern Ontario.

Arron Pickard

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