Vancity mutual fund drops fossil fuel companies Print
Earth News
Written by Joan Russow
Tuesday, 19 May 2015 00:00



Vancity mutual fund drops fossil fuel companies

Oil sands projects will no longer in the portfolio of the IA Clarington Global Equity SRI Fund — which uses Vancity subsidiary Vancity Investment Management as a sub-advisor.

Photograph by: TYLER BROWNBRIDGE , Remote

Vancity has developed what it calls Canada’s first mutual fund that won’t invest in companies associated with fossil fuel production.

“Our members have been asking for something like this for a while now,” Vancity chief operating officer Rick Sielski said in an interview.

“It’s a convergence around what makes sense from a risk-return investment for our members while satisfying their need to really put their money where their heart and values are.”

IA Clarington Global Equity SRI Fund — which uses Vancity subsidiary Vancity Investment Management (VIM) as a sub-advisor — had about three per cent of its holdings in fossil fuel companies but recently sold off those investments.

VIM representative Dermot Foley said it’s probably a good time for the fund to unload its fossil-fuel investments because they carry more risk, largely due to the dramatic fall in world oil prices.

“This is historically a more normal price for oil and quite a number of big oil and gas projects probably won’t get built at the normal price,” he said.

Foley said it was sometimes difficult to decide which companies could stay in the fund’s portfolio and which ones had to be sold off.

Selling off its investment in energy giant ConocoPhillips was easy but what about Toyota?

“They’re one of the largest car companies in the world but they’re also the largest producer of hybrid vehicles and that’s one of the solutions to climate change — producing a much more energy-efficient car,” Foley said.

So Toyota remains in the fund, along with rail companies. Some might argue that rail companies transport fossil fuels but Foley said trains offer a very energy-efficient means of transportation, which leads to lower emissions.

Well known companies such as Apple, Starbucks, Google and MasterCard are included in the fund’s portfolio.

Responsible Investment Association chief executive officer Deb Abbey said there is a “significant demand” from retail investors for fossil fuel-free investments.

She said Ontario, Quebec and California recently agreed to cap greenhouse gas emissions and establish a carbon market and investment managers are playing close attention to the changing regulatory environment.

“They’re reducing their exposure to high carbon assets to eliminate as much of that risk as possible,” Abbey said, noting fossil fuel companies make up about 25 per cent of the TSX.

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Last Updated on Tuesday, 19 May 2015 12:11