I’ve been lucky enough to have had health and dental coverage through Green Shield Canada (GSC) on and off for the past decade, first through the University of Toronto Student Union and later through companies I’ve worked for, including CoPower.
But until they invested in CoPower Green Bonds last year and I reached out to interview Senior Financial Analyst, Daniel Allaire, I had no idea what a force for good the popular benefits company is.
A different kind of benefits company
The first surprise: GSC is a non-profit corporation with a strong social mission. Their story begins in 1957 with a Windsor pharmacist who saw his customers struggling to pay for medication. Bill Wilkinson founded GSC to give everyone access to healthcare, and to this day the company remains Canada’s only national non-profit health and dental benefits provider.
“We charge for our services, but because we’re a non-profit any surpluses we earn have to be used to further our mission,” said Daniel, who reports on the company’s investments. “That means reinvesting in GSC and in the community.”
"Any surpluses we earn have to be used to further our mission. That means reinvesting in GSC and in the community.”
A different kind of investor (an impact investor to be specific)
“Surpluses go into our social innovation fund,” explains Daniel. “From there, we distribute some funds directly to the community through grants. More recently, we’ve also been making impact investments, the returns from which grow the fund, allowing us to do more.”
Impact investing is an investment strategy that seeks financial returns alongside positive social and environmental change, and one of GSC’s most recent impact investments was in CoPower’s 5-year*, 5% Green Bonds.
According to Daniel, the CoPower investment was an “easy fit” from both a financial and positive impact perspective.
GSC’s target return for the overall impact investment portfolio is a conservative 2.5% real rate of return over ten years. “Because CoPower’s bonds come in higher, they’ve given us room to accept lower returns on our other investments,” said Daniel. “Our due diligence showed that the risk level was appropriate for us and we also gave CoPower strong marks for company leadership and execution.”
As for the kind of positive change they want to see from their investments, they’re focusing on the connections between health and other important issues like the environment, access to housing, employment and education.
“We see health and climate change as being linked on several levels.”
CoPower Green Bonds support small scale clean energy projects across Canada helping to reduce greenhouse gas emissions responsible for climate change. GSC viewed the investment as aligning on their environmental and health goals.
“We see health and climate change as being linked on several levels,” said Daniel. “Heat waves, for instance, are having adverse impacts on health, but we’re also seeing that climate change is affecting mental health both in terms of experiencing catastrophic events but also just the overwhelming nature of the problem. That’s important to GSC.”
“Green Bonds are giving us the direct emissions reductions we wanted to see and giving people something tangible they can do to address climate change,” said Daniel, who calls himself the office green guy. “I keep track of my own carbon footprint, so on a personal level it was neat to learn about an investment that does the same.”
GSC tracks the impact of all their investments. With Green Bonds, this is done through quarterly reports CoPower sends to all investors that include carbon emissions avoided, energy saved, and new clean energy projects enabled.
“Green Bonds are giving us the direct emissions reductions we wanted to see and giving people something tangible they can do to address climate change.”
For GSC, impact investing was about finding another way to do good through the social innovation fund, beyond straight granting. In 2017, after more than a year of careful development and research with expert consultants at Wetherby Asset Management and Purpose Capital (now Rally Assets), they launched the strategy.
Other impact investments in GSC’s social innovation fund today include New Market Funds which supports affordable housing, cooperative businesses and community lending across Canada and the Artscape Launchpad which offers affordable co-working space for Toronto’s thriving arts community. GSC is currently in due diligence on new opportunities.
A different kind of corporate citizen
Beyond their impact investments, over the last number of years the company has distributed millions more in community grants from coast to coast, partly as a result of the returns generated on their investments, in areas that help to advance GSC’s mission.
“We’re supporting initiatives I feel strongly about on a personal level and that have had an impact on my life.” One of the many grants GSC has made over the years was to a local Windsor conservation organization, the Essex Regional Conservation Authority. “ERCA is developing a greenway to help people get around the community in a more sustainable way. I use it to run to work.”
GSC has a lot to feel good about, and not surprisingly, Daniel mentions that the company has a great culture and is a great place to work. “It all comes back to the mission.”
*Editor’s note: Green Shield Canada invested in CoPower Green Bond II Series E which offered 5% annually over a 5-year term. CoPower Green Bond III offers 5% annually over a 6-year term or 4% annually over a 4-year term and is available on the CoPower platform to investors of all sizes. This blog 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 Offering Memorandum of CoPower Finance Inc. dated May 11, 2018 for all material information in respect of CoPower Finance Inc., the third issuance of CoPower Green Bonds and the terms of the offering of the third issuance of CoPower Green Bonds.