When it comes to climate change, The Trottier Foundation is fully committed. As Executive Director Eric St. Pierre sees it, supporting the solutions to climate change is fundamental to achieving success on the foundation's other major priorities.
“Making the kind of lasting change we want to see on issues like health or poverty means getting climate change right,” said Eric of the foundation’s philosophy of looking at these challenges through a systems lens. “If a foundation’s priority is supporting hospitals, are they also thinking about how to deal with the stress climate change has on our healthcare system?”
Today, the Montreal-based foundation is exploring new strategies to leverage its impressive financial assets in support of a safer climate. Impact investing is one such strategy.
Impact investments aim for financial returns alongside positive social or environmental change, and in October 2018 the Trottier Foundation made their first: a $1 million investment in CoPower Green Bonds.
“We saw CoPower’s bonds as an easy way to invest in the kind of practical solutions we need if we’re going to reduce emissions asap.”
“There’s a lot of talk these days about impact investing or sustainable investing, but not a lot of options. CoPower is one of the few examples of a real investment that directly reduces carbon emissions,” said Eric.
CoPower Green Bonds are backed by loans the company has made to climate-friendly projects like solar and LED retrofits that sell energy or save energy while reducing carbon. It was this focus on measurable emissions cuts that appealed to the foundation’s investment committee.
“We saw CoPower’s bonds as an easy way to invest in the kind of practical solutions we need if we’re going to reduce emissions asap,” said Eric. “We also saw them as promoting a positive vision of where the world could go.”
“Climate change is overwhelming for most people and it’s easy to feel paralyzed by all of the bad news stories. We liked how CoPower is making solutions visible and making it easy for people to understand the kind of impact they can have. That’s what we need to stay focused on.”
"We’re growing our portfolio by investing in green energy, and then we’re able to turn around and make grants to support groups pushing the low carbon transition forward in other critical ways."
The bonds were a good fit for the foundation from a financial perspective too. “We looked at our portfolio holistically, and there was room to add a new product to our fixed income allocation,” said Eric. “Plus, the 5% return satisfied our financial requirements.” (Editor’s note: The Foundation invested in CoPower 6-year Green Bonds which offer 5% annual interest.)
“We’re earning interest and growing our portfolio by investing in green energy, and then we’re able to turn around and make grants to support the David Suzuki Foundation’s climate research or Equiterre or Pembina’s policy work - groups that are pushing the low carbon transition forward in other critical ways.”
While their first official impact investment, CoPower’s Green Bonds are just the second step in what is a broader shift for the foundation’s investment portfolio. In 2016, the Trottier Foundation moved to divest its assets from fossil fuels thanks to strong support from key board members.
They have also recently invested in clean technology with Cycle Capital and are exploring opportunities to invest directly in residential geothermal and renewable energy projects with Indigenous communities.
While the impact investment industry is taking off, according to Eric, it can still be difficult to find products. “The conception of what ‘sustainable’ means in the traditional investment industry is somewhat limited,” said Eric. “A lot of investment managers haven’t caught up to the change, so if you ask for something green they’ll suggest shares in Apple, and that’s not exactly what we’re talking about here.”
Eric finds hope in the way foundations around the world are embracing impact investing and in the leadership role played by Canadian foundations like the McConnell, Ivey or Donnelly Foundations who were early adopters in the movement.
“It’s just people listening to a good idea and saying ‘yes’. The case for impact investing is pretty convincing,” said Eric of the fact that Canadian foundations typically dedicate 3.5% of their assets to granting with the other 96.5% invested traditionally, potentially in products that run counter to their mission.
"The world needs foundations’ innovative thinking more than ever and we can’t afford to leave money or resources on the table any longer."
What would they recommend to other foundations interested in getting involved? The first step according to Eric is education and getting buy-in from the board. An internal champion is helpful, too.
“We had an external expert come in to talk to us about the state of the impact investing market and which products are available and that brought credibility. Younger family members, in particular, are behind the idea and other members were very receptive,” said Eric.
“This movement is already a decade old so there are a lot of resources out there. Talk to other foundations. Starting slow is fine, but just get started. The world needs foundations’ innovative thinking more than ever and we can’t afford to leave money or resources on the table any longer.”
Editor's note: The Trottier Family Foundation invested in CoPower's third issuance of Green Bonds (Green Bond III) which is now available. 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.