Fossil fuels: divestment vs transition

 A question in the minds of many responsible investors these days involves the extent to which they should divest from companies with links to the fossil fuel industry, as opposed to supporting those that are making concrete efforts to transition to a carbon-neutral society by 2050, the goal set out in the Paris Agreement. Clearly, divestment is appropriate when considering companies directly involved in fossil fuel exploration, extraction or production. But what about those that support the fossil fuel industry indirectly with, for example, financing, and transportation? Attempts to find answers to this complex question formed the theme of a recent EIG event.

Expanding local community support to Toronto

EIG has long supported communities in Quebec by investing in local microcredit organizations, which provide financing and business support to aspiring entrepreneurs who do not have access to conventional financing. 

Proactive engagement by Scotiabank

Heidi Monk

EIG has been very pleased with the responsiveness and willingness to engage by Scotiabank (see a summary of our engagement on climate change and diversity in 2021). This August Scotiabank took their engagement with EIG to a new level, by reaching out to us to offer to have a phone call where they could update us on recent progress. Two Senior Vice Presidents spent about 45 mins speaking with me on behalf of EIG: Julie Walsh, SVP, Corporate Secretary and Chief Corporate Governance Officer, Meigan Terry, SVP, Chief Communications and Social Impact Officer.

Banking on diversity

In addition to its efforts on climate change (see The role of banks in addressing climate change) EIG has also been engaging on diversity and racial equity with the two banks in its portfolio (Scotiabank and Desjardins).

There have been some encouraging developments on this front as awareness of systemic racism throughout our organizational structures has grown.

The role of banks in addressing climate change

There has been a flurry in the media this spring about climate risks for banks and their role in reaching net zero by 2050 in order to align with the Paris Agreement[i]. So what does it mean, to commit to reaching net zero?

What do we mean by "antiracist investment"?

In September 2020 EIG members who responded to a survey noted that identifying antiracist investment opportunities was a priority for the group (see Self-reflection and next steps on Diversity, Equity and Inclusion). But what exactly do we mean by “antiracist investing” and how, concretely, does committing to it affect EIG’s investment philosophy? This was the question posed by members of EIG’s Executive Committee when they pointed out that the survey did not define “antiracism” in relation to investment, and that it likely meant myriad things to the different respondents.

Self-reflection and next steps on Diversity, Equity and Inclusion

Racial justice, an important component of a more general movement for workplace Diversity, Equity and Inclusion (DEI), is an issue which resonates with EIG members, committed as we are to ethical investing. In September 2020 14 EIG members gathered (virtually) to discuss antiracism and reflect on how EIG can integrate it into its investing and ways of working. We discussed possible avenues for engagement, while recognizing EIG’s limited resources (as a reminder, we are a volunteer investment club, entirely member-run). As a first step, we developed a survey that was sent to all EIG members in order to prioritize actions. 

EIG members indicated that:

• The favoured course of action for EIG is to research antiracist investment opportunities.
• It is difficult to prioritise shareholder engagement, as many topics that EIG addresses are important.  Environmental issues are ranked as the most important, with labour rights and antiracism, close behind.
• Members are not particularly interested in holding a public event on antiracism.
• Members have some availability to put time into work towards racial justice at EIG.