I would get this question quite often when I was an adviser with Tangerine.

“Do you have any Green investments?”

Of course, when one offers broad-market index based portfolios the investment is environmentally agnostic. It makes no judgement on how the company operates or how it makes its profits. Company behaviour will be determined by the regulators and shareholders and the company’s board and management. And largely the demand for the products or services will be determined by the consumer: that’s you.

Now I would certainly direct clients to the green investment options in Canada, it’s not up to me to tell you to leave your values or principles at the door, but I would also suggest that one might have a greater chance to effect change by addressing the way they live compared to how they invest. Largely, lifestyle choices trump investment choices when it comes to having a positive impact on the environment. To be consistent and transparent, I still believe that to be true.

That said, there is an investment option that appears to fit the bill for enabling that change. That investment is the CoPower Green Bond.

Yes, it’s a bond, and that means that an investor is loaning money that is used by developers to fund clean energy infrastructure. For that loan, an investor would be paid 4% annual for a 4-year bond and 5% annual for a 6-year bond. In today’s low-rate environment that’s a very good rate of return.

There are 3 types of projects that your monies (your loan) will fund.

We might consider this a truly green investment because the at the core (geothermal pun intended) we have Canadians who are making a choice to ‘Go Green’, or their version of green. As an investor, you are enabling those projects. Your monies will fund projects that will reduce CO2 emissions, and perhaps reduce polluting particulates that are a by-product of traditional energy generation. You will be an ‘investor agent of change’.

These green projects are very successful and there is great demand from potential partners to start more geothermal, solar and LED bulb replacement projects. The demand is there, the projects simply need more funding. The more Green Bonds that can be issued, the more projects that can be funded. Quite simply, they need your monies, your loans.

If you look into the projects that are funded you’ll discover that they are more grass-roots and small-scale. Individual home geothermal conversion projects don’t attract interest and traditional loans from large financial institutions. These are individual Canadian homeowners who are largely being funded by individual Canadians (that’s you, potentially). What might be appealing to many is the small scale and clear transparency in where your monies are directed and how the effect can be measured.

How do you get your Green Bonds?

You can sign up through the CoPower website, where you would complete an online application. As part of the process you would also have a phone conversation with a CoPower investment representative to ensure suitability and to ensure that you do understand the investment and the associated risks.

You can also obtain the CoPower Green bonds with the discount brokerage Questrade and through Olympia Trust. Keep in mind that when you access the bonds through a third party, those institutions will charge fees. Ensure that your investment is large enough (the returns are large enough) to more than compensate for any fees that are applied. Through those third party options you can invest in RSP and TFSA and RIFF accounts.

How is CoPower different from a bond fund?

A SRI Socially Responsible Investment bond fund will hold dozens to hundreds of individual bonds. As a mutual fund it will change in price every day. There are management fees associated with mutual funds as well. The CoPower bonds are offered directly to you and carry no fees. You receive your interest payments and the effect of compound interest in full.

You will be owning an individual bond and you will be required to hold the bond to maturity. That means that if you purchase a 6-year bond, you will have to wait for 6 years to see that return of your initial investment amount. You may choose to have the bond pay you your interest payments ‘along the way’. Continue Reading…