Why following the money led me to exit the market

A brief journey into owning my shit

The most boring book ever? Actually: a useful read to spur change.

According to financial planning experts, most people don’t have enough retirement savings to live the lifestyles they’ve grown accustomed to throughout their working lives.

But a lot of us have some retirement savings, usually invested through financial institutions.

Meanwhile, many people working in the field of environmental, social, and governance (ESG) talk about those financial institutions as key leverage points for sustainable finance. There is big money moving around in pensions—over $47 trillion USD, according to the Thinking Ahead Institute, one of many groups exploring the power of investment portfolios for positive change. 

The thinking goes something like this: If we can put big money towards positive change, then we can make big, positive change. And if those of us who are saving for retirement can grow our savings while we’re at it, so much the better, right? 

It makes good sense. It’s also completely delusional, as I found out when I followed the money.

It’s not delusional in the, Hmm. That’s not very sustainable, is it? sense. It’s delusional in the, This whole thing is a grotesque nightmare—I’m out, sense. 

I put this up front so you know where I’m headed with this because once you see it, it will be hard to unsee.

If you prefer to believe that your hard-earned investments are humming along, ESG-aligned, climate-smart, and as socially responsible as you can get them—and maybe even out-pacing the market as ESG boosters tout—this will not be fun.

But owning one’s shit is rarely fun. And it turns out, we’ve been sold a lot of shit. (Or should I say, slaughterhouse flotation sludge. Wait, I’m getting ahead of myself.)

If, on the other hand, you are serious about positive change, this may help. It’s essential to be clear about what we’re changing—that’s the benefit of owning our own stuff, really—so we stop changing the wrong things and make the changes we want. And since we are the owners here, it is quite literally ours to change.

Below I provide details of my process so you can see I’m not hand-waving. This isn’t an opinion. This is what sustainable finance is actually doing, right now, touted as the solution while it perpetuates devastation. More bluntly, this is what your and my retirement savings is paying for.

To be clear, I’m in the same pile of doo-doo with you. So this is me, owning my shit.

Thankfully, we still have choices. I provide recommendations in every Matereal World post and this will be no exception. After leading us through a couple rabbit holes, I pull us out the other side and offer guidance—for decision-makers within the asset owning institutions, for ESG advisors, and for anyone saving for a future they want.

I did some homework on my retirement savings

My savings are invested with one of the original socially responsible investment (SRI) investment firms in Canada. It was Ethical Funds back in 2004, when I first rolled my straggling bits and bobs from previous employment into this pioneer of ESG investing. I didn’t do so because I’m particularly righteous—it’s simply where my new employer at the time, Canadian Business for Social Responsibility, had their group pension.

Twenty years later, Ethical Funds is now NEI, having merged with another investment company and rebranded. Over the ensuing years I have been receiving thick booklets in the mail with the Management Report and Fund Performance (MRFP) and audited statements of the various funds in my portfolio, like the one in the cover image of this article.

Usually as I pitch these booklets (unopened) into the recycling bin I think thoughts like, “I should take a closer look at these and see what’s what.” 

But any time I tried to make sense of the info, I got bogged down and gave up. Yes, even though I used to produce similar material for fund managers and brokers at Manulife Financial before I stumbled into the sustainability field in 2003. And even though I now know a weird amount about ESG disclosures. I couldn’t get my mind to latch on to the documents.

Until the other day, that is, when I said to myself, “Enough excuses. Get in there. Figure it out.” I sat down with a 115-pager entitled, NEI Funds – MRFP and audited annual statements – September 30, 2023 that had been sitting on my kitchen table. And I figured it out.

If we were to judge by the cover we would conclude this is the most boring book ever. It turns out to be a gripping read, one that changed the arc of my own finances—for good.