This is the first blog in a recurring series called “In The Green.” We’re talking to all types of green investors, from those who are starting small with a fossil-free ETF, to those who have dived in head-first to create a 100% earth-and human-friendly portfolio, to find out how they’re doing it.
Braden Root-McCaig, 29
You have more investing experience than a lot of the 20-something investors we've spoken to, how did you get started?
I became interested in understanding financial markets, long before most of my friends did. It probably doesn’t hurt that my stepdad was a financial planner. He started managing a small portfolio for me when I was a kid, but the first investment I chose on my own was a well-performing mutual fund, Global Science & Tech, that we bought with money I earned as a dishwasher in Grade 9.
Back then I took a passive approach to investing. My stepfather had a very long view of the market and this instilled in me a patience, and carried me through my first few shocking months of losses, and allowed me better appreciate the net returns at the end of the year. I remember the first time I made 18% and realized I could earn a lot more than a month’s salary, just by investing thoughtfully.
Can you tell us a bit about your investment philosophy and how you make decisions?
Even though I’m reckless in other ways, my investments aren’t particularly exciting. Looking at my portfolio today you might assume I’m 50 years old, and again I get that approach from my step dad. He’s a big believer in Warren Buffett and the advice that you shouldn’t invest in anything that you wouldn’t be willing to hold for 25 years.
I own mutual funds, ETFs and some money markets, mostly held in an RRSP. You could characterize my risk profile as moderate to aggressive and that’s due to my age. I’m aiming for 8% returns and I’m willing to take measured chances since I have decades to make up for potential losses.
And while I am quite hands on, I do have an advisor, although I view them primarily as a barrier to self-harm. The legitimacy of a bank is a comfort, but their product options have never inspired me.
What prompted you to start considering the impact of your investments?
I’ve always had a strong environmental ethic. I feel it’s something that has become increasingly expected among millennials. We grew up as the first generation presented will real options – green cleaning products, recycled food containers, etc. It didn’t take long to realize that most of the investments my stepdad was making on my behalf were in natural resources. I remember talking to him about it, but he convinced me that there really weren’t many alternatives -- there seriously weren’t at the time -- and certainly not for someone with my small portfolio.
I felt forced to choose between doing good and making a profit, which was the whole reason for investing in the first place. And just when there seemed to be some new ideas and financial tools emerging around socially responsible investments, that’s when the 2008 crash happened, and the conventional wisdom was then to revert to conservative foundations - investing in historically safe industries like fuel, lumber and mining.
What changed? What made you decide to try making a green investment?
It wasn’t so much a proactive decision as just being presented with a realistic alternative. I learned about CoPower’s Green Bonds through a colleague and was attracted for a number of reasons - the main one being that it is a private investment. With the market becoming increasingly volatile I saw green bonds as a way to hedge against those downsides. To me CoPower strikes a good balance between return, liquidity and safety.
I was also interested in the environmental aspect. Being able to learn more about the individual projects and track updates myself is pretty cool. Even though my portfolio is managed by an advisor, I made this investment on my own and as a result I feel closer to it. I especially like how the bond simulates the intimacy of a direct investment, where the impact of specific projects can be measured over time, while maintaining the reduced risk that comes from the fund's diversification across multiple projects.
Of everything I’ve ever invested in this is the product I’ve felt most strongly about.
That said, those factors wouldn’t have made a huge difference to me if the bond wasn’t solid from a financial point of view. Not having to choose between profit and impact is the ideal.
Since investing through CoPower I’ve taken a greater interest in watching the performance of ethical ETFs and mutual funds and would consider adding much more to my portfolio. Again, for me it's about dipping a toe and reviewing performance over time.
Now that you've taken the plunge yourself, how do you think we can get people investing for good on a massive scale?
When you lead with your heart, in any situation, you often end up having to justify your actions to others. I knew I’d have to defend my decision to the skeptics, my stepdad included, and it was important that I could speak to the risk mitigating aspects of CoPower’s model. He was fascinated by the idea of investing in portfolios of clean energy projects and he recognizes that this is where the market is heading. It's our responsibility as informed investors to maintain and accelerate this increasing awareness.
Yet, for most people investing is an out-of-sight-out-of-mind activity and I think that’s because most of us don’t want to think about what we own. It would be terrific to see more people who consider themselves environmentalists starting to think about the impact of their investments, but I don’t see SRIs as suited uniquely to a niche audience. The market is a reflection of its investors and only by becoming informed and educated can we demand a more responsible, equitable and sustainable market environment.
In my own right, I've been challenging my friends and enjoying some pretty interesting conversations as a result. Having realistic alternatives that don’t involve concessionary returns are the key to getting people to open their minds.
Editor's note: Braden invested in CoPower's first issuance of Green Bonds (Green Bond I) in 2016 and re-invested in the company's second issuance (CoPower Green Bond I) in 2017.
The client testimonial that appears on this page was solicited by CoPower and may not be representative of the views of other investors or potential investors in CoPower Green Bonds. Please consult the CoPower Green Bond Offering Memorandum for all material information in respect of CoPower Finance Inc., CoPower Green Bonds and the terms of the offering.