An Antidote to Uncertainty

How Investors can help steer Canada through systemic change

Tectonic shifts are happening all around us, contributing to a sense of instability in every corner of our lives: rapid technological advances; global geopolitical realignment; climate change, along with the economic transition it’s driving; rising inequality, compounded by disinformation and populist rhetoric that takes advantage of those who suffer from it the most; and the list goes on.  

It’s a regular topic of conversation in my home and my workplace how to manage the overwhelm. At the institutional level, though, there is enough power to shape these forces — but for that to happen, the conversation about how to wield that power — needs to change.  

These problems are bigger than any one company, sector or even country. In some cases, they are mutually reinforcing, and in all cases, they are systemic risks that no investor can diversify away from.  

I’ve noticed lately that when smart people articulate their version of the solution sets, investors are often seen as a force for course correction, a catalyst for re-stabilization. Cue Prime Minister Carney and projects of national interest, for example.  

But long-term investors can do much more than put money on the table. They are, for example, uniquely qualified to understand the relationship between policy and the economy, and, in turn, to advocate for policy and regulatory decisions that create more stability and certainty — for investments, yes, but also for the people and the planet from which they ultimately derive their returns. In short, investors have more power to shape government responses to those tectonic shifts — not just price them in.   

Let’s take climate change as an example. Some institutional investors are doing amazing work reducing emissions and investing in climate solutions at the enterprise level. This signals to public issuers and other holdings that those investors expect the same from the real economy actors that use their money to generate both economic activity and climate pathways. This is no doubt important and necessary work.  

At the same time, many investors also point out that policy and regulatory decisions can either help or harm their success on climate action. That is 100 per cent true (even if some of the investors saying it don’t have their own house in order when it comes to carbon emissions).  

So it only stands to reason, then — especially in this time of extraordinary upheaval — that investors need to take an additional leap forward, and actively advocate for the policy certainty they seek. In fact, this should be considered part and parcel of the risk-management work these investors are already steeped in: managing systemic risk by helping shape those systems for the better.   

Easier said than done? Perhaps. It’s true that investors don’t always know how to flex those muscles. It’s not what they were established to do, and it’s not ingrained in their organizational or corporate cultures. 

That’s why SHARE is devoting more of its energy to helping those in its investor networks step out on policy concerns —so that investors can be more of a proactive force on crucial issues like the need to build a clean, robust east-west electrical grid, and the potential role of green energy in nation-building and economic resilience.  

In my new role as Director of Public Affairs at SHARE, I’m excited to help organize this work; to create some countervailing forces to the rampant uncertainty and instability that surrounds us; to flex some new muscles of my own. 

I’ll be posting more about this in the weeks and months to come. In the meantime, reach out if you want to learn more about this important work.