Mother nature is the base of our economic system. Without a functioning and healthy environment, commerce would fail and our society would cease to operate. That’s the scope Tim Nash set up at the beginning of his talk last Wednesday, the Power of Sustainable Investing.
Nash, an expert in sustainable investing and an economics professor at Ontario’s Sheridan College, took some time out of his evening to speak to an audience at TRU over Skype hosted by the Kamloops chapter of the B.C. Sustainable Energy Association.
Prepped with a slideshow Nash shared through a projector, he prefaced his presentation with a graph showcasing the average Canadian’s carbon footprint detailing the average amount of gas we burn while commuting, travelling and eating with an omnivore’s diet. But spiking high above these plots was an average $5,000 total investment in stocks and bonds.
These companies on the stock market involved with carbon production were companies Nash called an ethical thumbs down.
“I’m not here to project my values on anybody else. It’s about looking at the companies inside, and people are going to determine on their own which companies are absolutely a no go from an ethical perspective,” Nash said.
For Nash, these red flag companies were companies like Trans Canada, Phillip Morris and Lockheed Martin.
But there is more than just an ethical concern, according to Nash. A financial issue is also on the rise, particularly if we’re serious about keeping the global temperature below the 1.5-degree Celsius threshold.
This has to do with the significant carbon bubble currently on the market.
“If we add up all the carbon reserves – we have roughly $27 trillion of proven carbon resources,” Nash said. “Now when we look at the carbon budget, and if we’re serious about keeping warming below one and a half degrees Celsius, then we only have this carbon budget where we can burn only $7 trillion worth of those assets.”
This would be a disastrous outcome for the market, with Nash comparing it to the burst of the stock market in 2007, only this time he predicts that it will be around three times larger.
“If we are serious about climate change we are looking at potentially one of the biggest bubble bursts in the history of the stock market,” Nash warned.
But Nash’s presentation wasn’t all bad news. He explained that over the past ten years he’s done research and has analyzed the green economy, tracking a significant shift and transition into a greener market that exists today, something that’s accelerating at a rapid rate.
Nash then went into explaining and giving examples of ESG scales, environmental social and governance scores that track the social behaviour of companies as well as mentioning the Jantzi Social Index, a Canadian index measuring the environmental and socially conscious stock market.
As Nash pointed out, some of these indexes still had kinks to sort out, with pipeline companies appearing on some positive scales and Indigenous issues not affecting the social behaviour and controversy scale of companies.
However, overall Nash encouraged Kamloops residents to follow these tools to adequately invest in greener companies, pass on the knowledge and continue to follow his website, the Sustainable Economist, for further tips and advice.