Major shift towards ethical investment

Major shift towards ethical investment
Major shift towards ethical investment

This text is part of the special Philanthropy section

For two years, the Foundation of Greater Montreal has been rethinking its way of investing and offering donors responsible philanthropic funds.

In recent years, the Foundation of Greater Montreal (FGM) has taken a major turn in the way it invests. From now on, it is possible to create an ethical philanthropic fund that respects the values ​​of donors, a first in Quebec.

With responsible investing, donors who want to contribute positively to society have the assurance that their money will serve their objectives, and not the other way around. This is why certain sectors are now immediately excluded from investments: coal, arms, games of chance, pornography and tobacco. In the same vein, the FGM, which currently manages 800 philanthropic funds for a total of approximately $400 million in assets, invests this capital while ensuring that it respects certain ethical rules.

Thus, the money invested must be done with respect for the rights of individuals and indigenous peoples, aiming to reduce the carbon footprint of investments, in accordance with the Paris Agreement, and integrating notions of diversity. , equity and inclusion. In addition, the FGM calls on Montreal and Quebec managers, and deploys part of the capital in investment with social benefits, here in Quebec. We are talking, among other things, about social housing.

“We are committed to putting at least 10% into impact investments such as affordable housing, GHG reduction and the social economy,” explains Karel Mayrand, president and CEO of the FGM.

“It took a while to put it all together. We have been working on this for two years, he adds. We can now propose a philanthropic fund that promotes social development. For us, such a fund must align with donor values, such as environmental protection, health and culture. We want to ensure consistency to ensure that investments support causes that are important to them. We want to apply the same values ​​in our investments as those of the people who come to create funds with us, while pursuing the same return objectives. »

In doing so, donor money acts twice, says Mr. Mayrand.

“Money works twice,” he said. It works when it is invested, and then when it is paid to the targeted causes. When you create a philanthropic fund, a portion of the interest is paid each year to the causes of your choice. But with ethical investment, the money invested is already working in the right direction, even before the subsidies are paid to the organizations supported. »

Left hand and right hand

The influence of donors and a growing demand for responsible investment in philanthropy are among the reasons that pushed the FGM to undertake this major shift. Elisabeth Patterson, partner in indigenous law at Dionne Schulze, is one of those donors concerned about the consequences of the investments made with their money.

The lawyer says that her family, which created a considerable philanthropic fund a dozen years ago, always insisted that its money be invested as responsibly as possible.

“At the time our family created its philanthropic fund, the FGM was not yet focused on responsible investment, but we asked that it make efforts so that a percentage of the money invested was. , and so that this percentage increases over the years, says Mme Patterson. My parents thought it didn’t make sense to fight homelessness on one side, when part of their money could potentially be invested in real estate investments that contribute to homelessness problems. It would be like trying to put a band-aid on a problem that was created with our money. »

For this lawyer specializing in indigenous law, the left hand must not take back what the right hand gives. She also gives the example of certain forestry companies.

“If you are a philanthropist and you make donations to an NPO that supports indigenous culture, but on the other hand, your money is invested in forestry companies that operate on indigenous territory without the consent of the nations concerned, that does not it doesn’t make sense. »

With responsible investment, she feels reassured.

“My parents were always interested in social causes,” she says. This was also the case for other investors, notably religious communities, who asked for the same things as us. The philanthropy community is quite conservative, so I am happy that investors like us were listened to by the Foundation of Greater Montreal. »

This content was produced by the Special Publications team at Duty, relating to marketing. The writing of the Duty did not take part.

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