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One of the most significant ways we can protect these natural spaces is to transition toward renewable energy, which will allow us to enjoy the same quality of life we have today, while protecting the spaces where we live, work and play. Now, and for future generations.
But right now, financial institutions are providing far more funding to industries that are directly linked to the climate crisis, particularly fossil fuels, than they are investing in renewables. Did you know that a 2017 report showed just 100 fossil fuel companies cause 70% of global emissions?
Read on to find out what POW is doing and how you can make a difference.
Put simply, sustainable finance means investing in industries that create a sustainable future for our planet, and moving funds away from industries that are harmful.
While Wall Street might seem a million miles away from the mountains, where we choose to put our money makes a BIG difference to the climate. Why? Because the same financial institutions that you and I use for our savings, pension funds, and so on, also invest heavily in fossil fuels. Here’s how.
If you have a pension fund (RPP, RRSP or GRSP), either one chosen by your employer or one you pay into yourself, there’s a good chance that your fund invests in fossil fuel stocks. Even the Canada Pension Plan invests in fossil fuels.
That’s because fossil fuels have historically been considered ‘blue chip’ investments – a safe bet that will stop your pension from drying up in the event of a financial crisis. By investing in fossil fuels, large pension funds are helping these companies to grow and expand their operations, using… you guessed it… your money.
None of us wants to invest in a future that isn’t actually livable. And what’s more, a lot of analysts are now saying that our pension funds haven’t adequately considered the financial risks of climate change when investing in fossil fuels – so those ‘blue chip’ stocks might not be as safe a bet as people think.
When you entrust your money to a bank, it doesn’t just sit in a big vault waiting for you to take it out. Essentially, you’re loaning your money to the financial institution, and they then loan it out to their other clients at a higher rate, which is how they make money. Read more about that here.
Right now, all of Canada’s Big 5 banks loan tens of billions each year to the fossil fuel industry, allowing them to expand their operations that are so damaging to Canada’s natural spaces, and to our climate.
On the other hand, when we invest in sustainable investments, we’re helping to grow sustainable solutions to the climate crisis. And as renewable energy companies grow, for example, they’re considered a lower lending risk, so it’s easier and cheaper for them to access more capital to help them grow in the future. It’s a virtuous cycle.
Climate change is directly affecting outdoor recreation. From shorter snow seasons and more unpredictable backcountry conditions, to wildfires that destroy our forests, to floods that make rivers unsafe to paddle or fish, the effects are visible wherever we find ourselves in nature.
But our community is massive, with a combined economic weight that makes people sit up and pay attention. How we choose to use our money is powerful – it signals our priorities to decision-makers and drives meaningful change.
Whether you’ve got $5 in the bank or $5 million, what matters is your voice. And together, our voices are loud.
You don’t take on a new line without a team. That’s why we’re working with our corporate partners to create sustainable finance solutions in our industry. Stay tuned to find out more.
Is POW trying to close down the oil and gas industry?
We understand that fossil fuel industries provide livelihoods for many communities, and that you can’t shut off the taps overnight. We believe in a just transition to renewable energy, that will provide great jobs and economic benefits for all Canadians, while creating sustainable ways to power our society in the months and years ahead.
I’ve heard that gas companies are best placed to lead the transition to renewable energy – is that right?
Well, it’s complicated. In theory that’s true, because fossil fuel companies have the funds and much of the existing infrastructure to produce and distribute renewable energy at scale. But to date, they’ve shown no signs of moving away from extraction and burning of fuels, and instead are relying on untested and so-far ineffective technologies like carbon capture to move toward Net Zero. We no longer have time to wait for them to make the move – we need to invest in proven renewables if we’re going to keep global heating under 1.5 degrees and avoid further catastrophes like we’ve seen across Canada in the past year.
Are ESG funds as reliable as other investments?
It’s important to know that while we here at POW have many talents, we’re not financial advisors. But we can tell you that lots of analysis is showing that fossil-free investment funds are performing as well as, if not better than, their peers. We suggest doing your research, chatting with your pension fund manager and bank to find a fund that balances your financial goals in line with your personal values.
What could our government do?
We welcome the commitments made by the Government of Canada to end subsidies and public financing for the fossil fuel sector. However, these commitments do not yet amount to the federal government ending its fossil fuel support in line with what is needed for Canada to meet its climate targets. We urge the government to demonstrate true leadership by going beyond the commitments made to date and eliminate all subsidies, public financing and other forms of financial support from the Government of Canada and federal crown corporations directed to the oil and gas sector by the end of 2022. Read more here.