EIG Investments - Never a Dull Moment!

On the one hand, EIG members recently approved a proposal for a community investment in CoPower green bonds, which support small-scale clean energy and energy efficient projects – a move made even sweeter by noting that Canada is ahead of the US in making available this kind of platform to individual investors.

On the other hand, a game-changing announcement that Amazon is buying out long-time EIG holding Whole Foods.  In fact, EIG sold all its shares in Whole Foods last November, when it appeared to be struggling with competition from mainstream grocery stores offering more and more fresh, organic produce, albeit at US$31 /share, compared with the US$42 / share that Amazon is offering.  Oh well, you win some you lose some!

CoPower:
The American business media magazine, Fast Company, recently published an article on CoPower entitled This Canadian Site Lets Anyone Be A Cleantech Investor (You Can’t Do That In The U.S.)  It describes how, since Canada relaxed its financial regulations last year, ordinary Canadian citizens (“non-accredited investors”) can now make direct investments of only $5,000 in private projects.  CoPower has taken advantage of the situation to pool loans in individual projects, which include solar farms, geothermal installations and building retrofits, into Green Bonds that can be purchased by individuals seeking social and environmental returns on their investments.  An example would be switching an old building’s lighting from incandescent bulbs to LEDs. In the US, because of regulatory restrictions, only “accredited investors” (earning more than $200,000 a year or with net worth more than $1 million) can invest in such platforms.  Since launching in 2013, CoPower has already raised about $2.9 million. 

Whole Foods: 
According to the June 16th press release from Whole Foods, “Amazon (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.”

This announcement has spawned a flurry of analyses of what this will mean for the global grocery business, for example: 

• Amazon shakes up grocery sector with $13.7-billion WholeFoods deal and Amazon-Whole Foods deal hits Canadian grocery shares. Globe and Mail, 16 June 2017. 
• Le rachat de Whole Foods par Amazon pourrait déranger le marché épicier canadien. La Presse, le 16 juin 2017. 

EIG’s Equities Trading Committee (ETC) will be following developments closely, given that we already hold one affected competitor, Costco.  Costco was approved by EIG members in 2014 based on considerations such as: stellar treatment of employees; policies of efficiencies and waste reduction; action on animal welfare concerns; and measures to detect and deal with human rights abuses in its supply chain.

In addition, since divesting from Whole Foods in November 2016, the ETC has been considering potential investment in other players in the food business, notably Loblaws which, at least at first sight, appears to be the most socially responsible of the Canadian grocery chains.

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