A West Shore investment advisor is pushing for responsible investing across the world.
Stephen Whipp claims to be the only retail investment advisor in Canada to have signed the Global Investor Statement on Climate Change. The document, signed by more than 300 major financial firms, was delivered to government leaders at this week’s United Nations Climate Summit, in hopes of directing investment in an environmentally friendlier direction.
“The world is changing and this whole climate issue is another step. The big problem is we don’t have policy incentives. We don’t know where governments are going,” Whipp said. “There’s a lot of talk, but there is little in the way of policy and legislation. Investors like certainty.”
The 24-year Langford resident, whose company is part of Wolverton Securities, keeps a keen eye on Environment, Social and Governance (ESG) criteria when looking at investment options. Not only are such investments better for the planet and everyone involved, they can also be a lower-risk option that can pay off financially, he said.
“A lot of the large pension funds are using these very criteria to determine whether the companies are up to snuff,” he said. “What we are finding is that is reducing risk. If you invest in a gold mine in South America and there were human rights issues, their share price is going to go down.”
He also pointed to the steep drop in prices of British Petroleum shares, following the controversial oil rig explosion in the Gulf of Mexico in 2010, as another environmentally and financially disastrous example of why responsible investing should not only be the example, but the norm.
“When I started looking at the type of companies I was expected to invest in, it became a point in my life. I couldn’t do that anymore, because it was wrecking my soul,” Whipp said. “So I began exploring investing in a different way.”
A board member with the Responsible Investment Association for the past seven years, Whipp said despite strong environmental standards, he isn’t blind to the fact oil and gas will be a part of the world for years to come. He just points to fossil fuels as a transitional fuel source, as opposed to the only source of energy – and rolls that thought process into investment choices as well.
Whipp said however, if the government were to help strengthen regulatory support for energy efficiency, phase out subsidies for fossil fuels and support innovation of low-carbon technologies, including financing clean energy research and development, it would go a long way to help in a lot more ways than just the financial sector.
“This declaration is being delivered to the UN in an attempt to get world leaders on side,” he said. “There is pent-up demand for these types of companies. But what needs to happen is there needs to be a signal from the government saying we need this, we need to reduce tax breaks for oil and gas and move those into renewables.”
Some European countries including Norway and Belgium require the use of ESG criteria by law to reduce risk in pension funds. Canada currently does not.
“(There are) a lot of people with lots of money who want to invest this way, but there is hesitancy with how the government will react,” Whipp said. “World investors are coming to the table and we are looking for the governments of the world to do the same thing.”