Investment Matters

Tuesday, January 22, 2013

CBC reported in December that almost three-quarters of the Canadian population hold an RRSP or plan to invest in one this year. That is a lot of money being distributed by millions of Canadians. With that amount of money comes a lot of power. If the investors took control of their investments and decided to wield that power what a formidable force that would be.

RRSP investments generate economic development and stimulate economic activity in the companies, communities, and industrial sectors in which they are distributed.

Nova Scotians invest approximately $600 million RRSPs.  Of that $600 million less than two per cent of that is estimated to have been re-invested in the Province. The Government of Nova Scotia summarizes the issue with this situation succinctly.

“This is a problem for communities in two ways: first, it is often difficult to attract venture capital to invest away from their home location, and second, each investment dollar spent in a community circulates through the economy creating a beneficial ripple effect. Most of our investment dollars are benefiting the Ontario economy (through the TSE).”

There is power in money. Six hundred million dollars could generate a lot of business opportunities here in Nova Scotia. Investing that kind of strength and capital in our own entrepreneurs would certainly fuel economic development. It is the kind of shift in resources that could turn an economic tide. The Nova Scotia government has taken an important step to help spur that shift by developing the Community Economic Development Investment Fund (CEDIF). The CEDIF program uses tax incentives to try to divert a small stream from the flood of money that leaves our province.

But what if the power from our investment money wasn’t just being diverted to other jurisdictions such as Ontario, Alberta, or abroad? What if the power of our investment money was actually threatening our safety, health, and our future?

The Divestment Movement is a new take on a proven strategy for making social change. In the 1980’s, students pressured Universities to divest from their investments in South Africa in the effort to push that country to end apartheid.  Students and other activists are now turning this effective tactic toward this century’s crisis, climate change.

Consider these facts from, a climate change action group.
It’s simple math: we can burn less than 565 more gigatons of carbon dioxide and stay below 2°C of warming — anything more than that risks catastrophe for life on earth. The only problem? Fossil fuel corporations now have 2,795 gigatons in their reserves, five times the safe amount. And they’re planning to burn it all — unless we rise up to stop them.

Based on the math, they have developed a simple manifesto with a simple strategy. Encourage large investors to divest of their money in the top 200 fossil fuel companies. Since the campaign began in November 2012, more than 190 college campuses have signed up. The movement has struck a chord.

It may have started on the campus, but it’s a movement that is resonating far and wide. Just a couple of weeks ago, this news out of Seattle:
SEATTLE, WA — Seattle Mayor Mike McGinn sent a letter to the city’s two chief pension funds on friday, formally requesting that they “refrain from future investments in fossil fuel companies and begin the process of divesting our pension portfolio from those companies.”

“Climate change is one of the most important challenges we currently face as a city and as a society,” wrote Mayor McGinn in a letter to the Seattle City Employees’ Retirement System (SCERS) Board and the City of Seattle Voluntary Deferred Compensation Plan Committee. “I believe that Seattle ought to discourage these companies from extracting that fossil fuel, and divesting the pension fund from these companies is one way we can do that.”

The power to create positive change through investment choices is an inspiring and potent concept. Even the great Dr. Desmond Tutu has become involved and endorsed the Divestment Movement.  “The divestment movement played a key role in helping liberate South Africa. The corporations understood the logics of money even when they weren’t swayed by the dictates of morality,” said Tutu in a video for the campaign. “Climate change is a deeply moral issue too, of course…. Once again, we can join together as a world and put pressure where it counts.”

We can change the world with our investment choices; bring our money home to support our own economy, and prevent it from doing harm. We have the power.

Investment matters.