How to discuss fossil-free investing with your advisor

Recently Suzanne Tokarsky told us about an experience that many would-be green investors share: talking to her advisor about getting oil out of her portfolio.

I grew up an environmentalist by default. My parents probably wouldn’t label themselves tree-huggers, but they brought me up in Vancouver, and living around mountains and ocean and being able to escape to the beach or a hike on weekends, it’s hard not to fall in love with the natural world.

…being able to escape to the beach or a hike on weekends, it’s hard not to fall in love with the natural world.

Although I’ve had an investment account for decades, my divestment story really begins around 2006. At the time I was busy raising young kids and hadn’t put much thought into our family’s investments. They were out of sight and out of mind, just a tool to help us preserve capital and save for the future and our children’s’ educations.

2006 was the year Al Gore’s An Inconvenient Truth came out, and it was also the year that Greenpeace launched their Tar Sands campaign. I know that a major challenge faced by environmental organizations is measuring the impact of education on the public. I can say with certainty that together, that movie and that campaign had an enormous impact on my life and the decisions I’ve made since.

After watching An Inconvenient Truth, I traded in our family’s old car for a Prius. That was my sustainability gateway drug. I started looking for more and more ways to make our lives more climate-friendly. Today we bike most of the time, we’ve installed geothermal, we’ve changed our diets. My son even recently travelled to Standing Rock to support the Indigenous communities protesting the Dakota Access Pipeline.

Back then, investments were the last place I thought to make a change, but Greenpeace’s Tar Sands campaign prompted me to wonder about whether I was invested in the oil and gas companies they were targeting. Of course, I was.

I now know how difficult it is as a Canadian investor to avoid supporting fossil fuels. Ours is a resource economy which makes it hard to disentangle your portfolio from these industries, but at the time I was shocked to see how personally implicated I was.

The next step to me seemed obvious: ask my investment advisor about my options for divesting from oil, gas and mining company stocks.

I was not prepared for his response. He flat out refused to do anything about it.

If you’ve ever tried talking about ethical or responsible investing with an investment advisor or bank account manager you may be familiar with the conversation that followed. Simply put, I was told that there’s no way to avoid these “sin stocks,” that investing with my values was unwise, and that I would earn lower returns.

A few months later I tried a second time. This time I had equipped myself with some research on the performance of ethical and responsible investments.

It was intimidating. He was the expert and I wasn’t. It was hard to know what to say, but I was certain he was incorrect.

(Remember, this was 2006, and while research was already pointing to the financial benefits of investment strategies that take environmental, social and governance considerations into account, there is a lot more evidence available today if you’re planning a similar conversation with your advisor.) Again, he refused to sell off the stocks we had asked him to.

Our advisor never sat down with us to ask us what we wanted, which led to the confounding realization that the people who are supposed to be helping you can have other interests. While some advisors are great and really take the time to understand your goals and preferences, others stick to pushing the products on their “shelves” that pay commission.

At this point, I decided to take a bit more control. My advice to others in this position is that if you want to make a change, you have to lead. Look at your values, set your goals, and take a step, however small, whether it’s sending clear instructions to your advisor, finding a new advisor, or learning how to manage a portion of your investments yourself.

After a third attempt (where we threatened to take our business elsewhere), he did sell our fossil fuel holdings, however, at that point, my husband and I were frustrated by the whole experience.

I decided to take on the partial management of our family investments as a personal project. By 2008 I had managed to completely divest us from fossil fuels by shifting our holdings to other parts of the economy, including real estate.

The next step was going beyond divestment and actively supporting companies that have positive missions. This is where CoPower and clean energy investing fits in. We also have other green investments with JustEnergy, Bombardier and Potentia Solar.

The transition from a traditional to a clean investment portfolio has been a long journey, which I’m still on. We were told that our returns would be lower by divesting, which hasn’t been true. I’m pleased with the performance of our investments, and most importantly, I feel good about them.

I’ve since learned that there are a growing number of investment advisors who specialize in helping clients make values-aligned investments. There are even some who specialize in building fossil-free portfolios. (Editor’s note: the Responsible Investment Association is a great place to go to find out about advisors and firms who specialize in sustainable investing.)

Taking personal control of our investments has been a big commitment, but I enjoy the responsibility and the knowledge I’ve gained. I now have a clear view into what we own and the impact we’re having on the world. I’ve gone from being a passenger to being in the driver’s seat, and it’s empowering. With anything in life, paying attention, and rolling up your sleeves where necessary, will pay off.

This article first appeared in the Co-Power website.