Most of us have some form of savings, but what are we investing in? As the title suggests, I am not a financial advisor so you may want to take this with a grain of salt, but this is the story of my green investing journey. It didn’t start green, but that’s why it’s a journey.

Investing sustainably helps to protect your savings and society overall from climate risks

For many years during and after university I had no savings of any significance so didn’t have to worry about what to invest in. However, I have always been fairly frugal, so after working for several years I finally had some savings to invest, but had no idea what to do with it!

Mutual Funds

I first opened an RRSP with a mutual fund company as part of a shared contribution program at a past employer. A mutual fund is basically a large pool of money that a fund manager invests based on a predetermined strategy. There were a few dozen options through the mutual fund company, but I found it very unclear what the investments were and they all had generic names like “balanced equity” or “international growth.” What does any of that mean?

I also noticed that these funds all had extremely high fees, typically about 2-3%. Over time, such fees would take a serious bite out of my retirement savings. I spoke with a couple of financial advisors at banks and they basically used the same jargon without providing much additional insight. I stuck with the mutual funds to take advantage of the shared contributions from my employer, but when I changed jobs it gave me a chance to reevaluate. At this point I still hadn’t really thought too much about green investing.

Exchange Traded Funds

I closed my mutual fund account and moved all my savings into a trading account so that I could choose my own investments more purposefully. Naturally, I started out by making a bunch of risky investments in individual stocks. I made money a few times and lost money a few times, but trying to pick stocks was a lot of work, involved frequent emotional decisions about what to do, and led to inconsistent financial results.

Graphical Representation of Trying to Pick Winning Stocks

I eventually heard about Exchange Traded Funds (ETFs), which are similar to mutual funds but they can be traded on the stock market and typically have much lower fees (often lower than 0.5%). For example, you could buy a fund on the Toronto Stock Exchange the same way you would buy a stock, except the fund would own all the top 100 companies in the TSX. Another added benefit to ETFs is that you can buy and sell any time without having to call in to an advisor and they tend to publish lists of all their investments, so they are easier to scrutinize. This seemed like a good way to get the diversification of mutual funds at a lower cost. The major ETF companies, such as Vanguard and Blackrock, have various options for diversified stocks, bonds, different regions of the world, etc. This type of investing is easy, has low fees, and achieves market returns, but doesn’t necessarily allow your investments to reflect your values.

Green Investing

This is where it gets interesting! After a while of investing in generic funds diversified across all industries I started to think that, as an energy manager working to fight climate change in health care, my personal investments should be a bit more reflective of my values.

Given that climate change is a public health crisis and that I want to retire in a world that hasn’t been destabilized by global heating, I decided that I needed to change my investment plan to eliminate investments in fossil fuels. There is a scientific imperative that consumption of fossil fuels needs to drastically decrease, so why should I invest any of my hard earned money in these companies that are either destined to fail or to speed us toward an uninhabitable future? It is interesting to note that it can be difficult to invest sustainably through mainstream channels. You will most likely have to do it on your own or hire a financial advisor who is knowledgeable about clean investing.

At first, I thought switching from my generic ETF strategy to a carbon free one would be simple. There are thousands of ETFs out there with all kinds of weird specializations, including a millennial focused ETF and one that is specifically run by artificial intelligence. I thought it would be easy to find diversified funds that have excluded fossil fuels. Unfortunately, it wasn’t as simple as that.

There are funds that are weighted for Environmental, Social, and Governance (ESG) factors or even CO2 emissions. One of the most popular ESG funds on the TSX is the Jantzi Social Index (XEN stock ticker). I’ll just buy that right? Not so fast – a quick look at the top 10 holding reveals all the big Canadian banks that heavily fund the fossil fuel industry, a major tar sands operator, and a pipeline company. How is this possible? Most of the top holdings are climate laggards! The problem is that ESG has a fairly loose meaning and typically means that weightings are applied based on certain performance metrics. As an example, if one tar sands operator is slightly better than another it will get a heavier weighting in the fund. This doesn’t necessarily account for the fact that all tar sands operators are cranking out CO2 that is putting our future at risk. It is a good idea to look at the list of holdings for the ETFs you are investing in.

Even more environmentally explicit ETFs, such as CRBN (globally diversified, Low Carbon Target) and SPYX (US S&P500, excluding companies with fossil fuel reserves) contain companies that would make any environmentally conscious person uncomfortable. After a fair amount of research, contemplation, and consultation with sustainable investing experts, I decided to invest in the following funds:

  • ETHI.TO – Global Sustainability Leaders Index. This fund buys only large cap stocks (i.e. big companies) in developed countries with several exclusionary filters, including eliminating fossil fuel producers.
  • SDG – Global Impact. This fund aims to invest in companies that work to advance the United Nations Sustainable Development Goals, such as education and climate change mitigation. This fund includes companies in developing nations.

Given that these funds use exclusionary principles to remove fossil fuel companies, my portfolio was left with little exposure to the energy industry. Therefore, I also added the following:

  • QCLN – Green Energy Index Fund. This fund seeks to invest in US green technology companies, such as solar, batteries, sustainable transportation, biofuels, etc.
  • “YieldCos” – These are companies that build, own, and operate renewable energy projects. They tend to pay high dividends based on the sale of renewable electricity from these projects. Some examples include: Brookfield Renewable Energy Partners (BEP.TO), Boralex (BLX.TO), Innergex Renewable Energy (INE.TO), Pattern Energy Group (PEGI.TO), Terraform Power (TERP). Some yieldcos view natural gas as a sustainable technology, so watch out for that. Gas is not clean energy.
YieldCos build renewable energy projects that have extremely predictable power production revenues, which are returned to shareholders as dividends.

It is important to keep an eye out for investments that suit your objectives as new funds are coming out all the time. For example, Desjardins recently started offering a portfolio of responsible investing ETFs that include fossil fuel free funds. Many institutional and amateur investors are looking to shield themselves from climate risks and trillions of dollars are being pulled out of the fossil fuel industry.

Contrary to popular belief, clean investing does not necessarily come at the expense of returns. In fact, continuing to invest in fossil fuels could potentially be what is dragging down your savings. The last decade has shown oil and gas not to be a sound investment and although past performance doesn’t guarantee future performance, the headwinds faced by the industry are growing. The chart below shows that oil and gas has been the worst performing sector of the TSX in the last decade and is the only sector with negative returns.

Past Decade TSX Performance by Sector

In terms of fixed income investments, there are options such as Green Bonds and Solar Bonds that invest your money in renewable energy assets and have fixed returns. For myself, I felt that I had enough exposure to that through yieldcos and found the process of enrolling in green bonds to be a bit cumbersome, so I just invested in Canadian government bonds. Unfortunately, Canadian governments often have to balance political considerations with environmental ones regarding fossil fuels, so I am still on the look out for a sustainable bond ETF that excludes fossil fuels.

Pension Plan

Ok, so after straightening my own finances out with a hot sustainability injection I realized that there was one other thing… And this thing is of special importance to many people working at UHN – the Healthcare of Ontario Pension Plan (HOOPP). Since this is a pension plan for healthcare workers, I assumed they would have a robust sustainability and climate change mitigation strategy. I was somewhat surprised to find out that it was difficult to figure out what my pension money was invested in or what the climate policies are.

I’ve spoken with HOOPP representatives to ask about their sustainable investing policies and they are aware of the risks involved with climate change. I received assurances that HOOPP has invested in improving energy efficiency in their real estate holdings, that they take ESG into account, and that their fund managers take climate change risks into account. Unfortunately, there is no publicly available information as to exactly what this means in terms of policies and actual investments. Past performance of the fund (such as performance tracking with oil price) suggests HOOPP may be heavily invested in the fossil fuel sector. The good news is that HOOPP has used exclusionary principles in the past to prevent investments in other health-damaging industries such as tobacco. I believe that the pension plan is working towards solutions on climate change and that together with members, financial goals and sustainability goals can be achieved through more clearly defined policies and communications around environmental performance.

If you are a member of a pension plan and you are concerned about the public health impact of the climate crisis or the risk to returns posed by continued fossil fuel investments, it may be worth getting in touch with your representative and asking a few key questions. For example:

  • Have you defined what climate change means to the pension fund, investee companies, employers, and beneficiaries?
  • What percentage of assets under management are currently allocated towards profitable low-carbon holdings, including renewable energy, green bonds and sustainable real estate? Please disclose these holdings.
  • What percentage of assets under management are currently allocated towards high-carbon holdings, such as coal, oil, gas, refining, and fossil fuel transportation companies?
  • Has the plan developed clear targets and a timeline for significantly increasing low-carbon investments and reducing high-carbon investments over time?
  • What measurable goals does the plan have for managing climate risk, the carbon intensity of its portfolio, and the shift of capital into profitable low-carbon solutions like renewable energy, green bonds and sustainable real estate?
  • Are you taking steps to ensure holdings are in line with the Paris Agreement commitments to reduce carbon emissions? (Limiting global warming to at least 2°C while aiming for 1.5 °C)
  • Is there a clear timeline for implementing Task Force on Climate-Related Financial Disclosure (TCFD) recommendations?
  • What are the plan’s specific ESG criteria with respect to climate change? How do these ESG criteria figure into decision-making on its holdings?
  • What engagement strategies are used to ensure assets within its portfolio meet ESG and climate risk goals? What are its specific goals for engagement and investment screening?
  • Has the plan considered screening for companies with a business model based on future fossil fuel exploration and extraction?
  • Has the plan identified a specific person, role or office who will be accountable for managing climate risk?

If fund managers hear these questions from enough members, you can start to work collaboratively to improve the sustainability of your pension fund.


Whether your investments are in an RRSP, TFSA, pension, or totally handled by an advisor, it’s important to ask a few key questions to make sure you are investing in line with your personal values. People altering their investment choices changes the social license companies have to operate. Even though we each individually have small savings, collective awareness can make a huge difference and is leading to global change. In my case, my primary long term concern is climate change so my questions are focused around this issue. Others may be more concerned about totally different issues, such as whether or not to invest in firearms manufacturers. The key is to ask questions and use your savings to influence the issues you care about.

I hope you found it helpful to read my investing journey. The journey continues!