This post has been updated from a version that originally appeared on SocialFinance.ca
A wise person once told me, “investors don’t solve problems, they make money”. I take the point — investments are intended to preserve and grow capital. But the good news is, entrepreneurs do solve problems – and investors have the power to choose where they are placing their capital, and how they build value.
All that is to say, investors can do both. Individuals, institutions, and advisors take several criteria into consideration when making an investment decision – why shouldn’t the underlying problem that their investment is working to solve be one of those considerations? If you’re reading this on SocialFinance.ca, chances are you already agree with me. But that doesn’t mean it’s easy to do – our entrenched systems for investing are relatively opaque, and don’t cater to those – including nearly 70% of millennials – who view investment decisions as a way to express social, political or environmental values.
At CoPower, we’re tapping into this unmet demand for fiscally savvy and socially conscious investments to help close the $5 trillion climate finance gap by making green investing simple, transparent, and profitable.
Starting with why
I’ll skip the diatribe on problems associated with carbon emissions and global climate change, and focus instead on the opportunity we see to be a part of the solution.
Buildings generate ~ 40% of greenhouse gas emissions, and most will be standing for the next 30+ years. Technologies exist to significantly reduce consumption and help buildings generate their own clean energy, profitably: however, a lack of financing is limiting deployment of these interventions. Building owners want efficient energy services, but not the upfront capital costs, and the financial services industry has yet to capture the value of this opportunity at scale.
At the same time, high barriers to entry, including capital and expertise requirements, means that many investors are excluded from meaningful participation in the clean energy economy. As is often discussed in forums such as this, impact investing opportunities for the retail investor in particular are few and far between.
CoPower leverages technology to bridge the gap between capital supply and demand, making it easy for investors of all sizes to place capital into products backed by loans to clean energy infrastructure projects. These products offer solid returns, predictable cashflows and measured social and environmental impact. By empowering individuals to make values-aligned investment decisions (that are also good for the portfolio), we can unlock new capital to accelerate climate change solutions.
We work with energy service firms and developers to provide financing in underserved markets. Projects in our pipeline include geothermal heating and cooling systems in condominiums, energy efficiency retrofits in municipal buildings, and rooftop solar installations. These markets tend to be disaggregated, and projects often too small to attract mainstream capital. Our team of experts sources and vets opportunities, structuring senior, secured loans, which are pooled into diversified investment products. Cashflows from energy savings or the sale of clean energy enable principal and interest repayments that generate steady income for investors.
Broadening the tent
Over the last year, CoPower has raised and deployed over $2.5M in sustainable infrastructure loans through two Limited Partnership funds, capitalized by accredited investors including foundations and high-net-worth individuals.
This February, we will launch our public platform and first CoPower Green Bonds, backed by operating clean energy assets. These notes offer solid yields and steady income, with low correlation to stocks and publicly traded bonds – and thanks to new securities legislation, Canadian investors of all sizes* can access these products through a personalized, secure investor dashboard that lets you analyze opportunities, place capital, receive direct deposits (or re-invest for compounded interest), and monitor financial and impact performance.
We believe that your portfolio should build value without compromising your personal values. That’s why we’re making it easy to invest in a clean energy future.
*CoPower will conduct a suitability analysis before approving investor applications.