What is sustainable finance and why does it matter?

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.

Pension funds

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.

Banks

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.

Why should the outdoor community care about sustainable finance?

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. 

What is POW doing?

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.