The Power of Community
Last Thursday, the Centre for Social Innovation (CSI) Annex was buzzing with excitement. Nearly 150 people were gathered, as organizer Frances Darwin put it, to “learn about the power of community, and community power.” It was the first Community Bond Showcase, a joint effort of renewable energy co-operatives ZooShare and SolarShare, and co-working space and launchpad CSI, to educate about their community bond offerings and meet some of their supporters.
All three organizations have tapped into an important shift towards socially responsible investing, or impact investing, where people are looking for triple-bottom-line returns on investment – i.e. financial products that benefit people, the environment, as well as the economy. No longer are people willing to turn a blind eye to investments in oil sands development, for example, for the sake of financial gains. And these days, people don’t have to choose between their ethics and their returns.
Putting your money where your values are
The demand for socially responsible investments is growing. In 2013, the Canadian market for impact investments (which includes education, housing, healthcare, sustainability, and other sectors) was estimated to be $5.3 billion, and expected to grow to $30 billion by 2023. The Climate Bond Initiative, an organization that specifically tracks bonds that contribute to climate change solutions, calculated that over $36.59 billion in these “green bonds” were purchased globally in 2014, a 3-fold increase over 2013.
Opportunities are also increasing. In the renewable energy co-operative sector alone, co-ops currently offering community bonds or shares include Community Energy Development Co-op, Green Timiskaming, Oxford Community Energy Co-op, Ottawa Renewable Energy Co-op, and SolarShare.
At the same time, it can be a challenge to find these opportunities without a bit of research. Financial institutions are still working to understand the community bond market, but there has been progress. James Law, Services Manager at TREC Renewable Energy Co-op says,
“We have received some positive responses from banks accepting bonds into RSPs. However, as a new and growing sector we need to continue to educate about the structure and benefits of community bonds. We look forward to continuing to build our relationship with the banks around these social impact investments.”
At the end of the day, community bonds offer more than a great investment. They offer an opportunity to build the kind of world we want to live in, whether it be decarbonising and modernising the energy system through increased ownership of renewable energy, to increasing community space within the city, or countless other possibilities through this model.
The Community Bond Showcase was a timely event for ZooShare, who days prior had closed their bond offering after raising their goal of $2.2 million from members. They had expected to share the benefits of their bond (7% per annum for 7 years) with attendees at the Showcase, but were happy to celebrate their success with their community instead.
According to Frances Darwin, Communications Co-ordinator for ZooShare,
“Meeting our bond target of $2.2 Million was both gradual and sudden… It took us 12 months to raise our first million, and then less than 6 months to raise the rest! We raised the remaining amount 2 weeks ahead of our anticipated schedule, which was a surprise to all of us. We were left kind-of stunned. Grateful, and stunned. It’s a great feeling.”
Julie Leach of SolarShare echoed this experience at the event. Their marketing strategy in the early days focused on meeting with community members in church basements and farmer’s markets, but as time went on, word of mouth referrals from members became commonplace. What was once an unknown brand is now seen as a great ethical investment opportunity that people wanted to share with their friends.
What the future holds
With current growth, it is clear that the community bond model will be around for a while. So what can we expect for this sector in the future? According to Darwin,
“I think you will see more collaboration within the sector. There’s definitely a growing market of people who want to use their portfolios to make a difference, and we need to be able to offer them the ability to diversify their local, ethical investments as easily as possible. We need to work together to ensure the whole sector succeeds.”
The Community Bond Showcase was certainly an example of what can be accomplished when the sector works together. The power of community, indeed.
What people are saying about community bonds
“I was a volunteer at the Toronto Zoo when I learned about ZooShare. I thought it was an innovative project, and I was looking for a meaningful investment” –Julie
“I invested in SolarShare because I was looking for a good, safe, responsible investment” –Tristan
“I’m a first-time community bond-holder with CSI. I’m here [at the Showcase] because these events are always a great way to meet interesting collaborators.” – David