Fracking Pension Plan

The Canadian Pension Plan Investment Board (CPPIB ) is under fire for its ownership of Crestone Peak Resources, a Colorado company involved in the controversial practice of fracking.

Quick Refreshers
What is the CPPIB?  The CPPIB is the body that oversees and manages the Canadian Pension Plan, a retirement pension eligible to all Canadians over the age of 60 who have contributed through their working years. The CPPIB has $434.4 billion in assets under management.

What is Fracking? Fracking is the process of drilling into the ground and shooting a pressurized fluid into that hole in order to release and recover gas in in the earth.

Crestone Backstory
CPPIB setup Crestone in 2015 to purchase 51,000 acres of producing oil and gas land from Encanna Corp for about $600 million USD. Earlier this year the company spent another $400 million USD, with a commitment to spend up to another $310 million USD to buy 100 acres from ConocoPhilips.

What's the Big Fracking Deal?
  • Fracking is one of the most controversial forms of fossil fuel extraction, known to damage the environment and send pollution, including the toxic chemical benzene, into the air.
  • In 2017 Crestone allowed volatile organic compounds to drift towards children on a playground just 25 metres away. The company was fined, and the site was shut down.
  • Another 19 notices of violations have been issued to Crestone from Colorado's oversight body.
  • 1,100 citizen complaints regarding noise, smell and air quality have been lodged against Crestone since 2015.
  • Crestone is a uniquely complained about company, 1/3 of all complaints to the state regulator are about them.

CPPIB's Position
Canada's pension managers talk the talk when it comes to climate change, calling the issue "one of the world’s most significant physical, social, technological and economic challenges.” But they continue to hold $11.6 billion of assets in conventional energy. A spokesman for the CPPIB says "there are attractive opportunities in the oil and gas sector that remain today, and, we believe, into the future.”

On the other hand, the pension doubled their investment in renewable energy year over year to $6.6 billion.

Big Picture: Institutional investors are no longer insulated from politics, people are increasingly insistent the businesses and organizations they transact with are aligned with their values. CPPIB works for all Canadians, although protected from undue political influence, shifts in public opinion and activism may force them to shift their allocations.
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Peak Picks

  • Are your friends getting married during COVID? Here's what you need to know.
  • Learn about Bandcamp, the anti-Spotify music streaming service.
  • In June, Twitter suffered a serious security breach. Wired explores how they survived it and their plans to prevent another hack on Election Day.

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Trump: An explosive New York Times investigation into President Trump's tax returns found years of losses and tax avoidance.

Tik Tok: A judge blocked President Trump's TikTok app store ban hours before it was expected to take effect.

COVID: Grocers are stockpiling goods in advance of a second wave of COVID-19.

Nova Scotia: Locals are clashing Mi’kmaq fisherman over their court granted right to fish in territorial waters.

Trains: Ottawa is close to making a decison on Via Rail's high-frequency train proposal between Toronto and Quebec City.

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Certain Uncertainty

Between the challenges of voting during a global pandemic and President Trump's recent comments around a peaceful transition, invetors are betting that the outcome of the presidential contest will be far from clear on election day and they're looking for ways to profit on the uncertainty.

There's been a spike in financial product that are usually tied to uncertainty in the market. Here's a few examples:

  • Traders are using the Cboe Volatility Index to get protection from wild spikes in the market after election day.
  • Currencies are also a favourite with traders tying the election outcome to swings in the value of specific currencies. Some investors have placed future bets against the Russian Ruble, predicting that a Biden presidency will pose significant policy risk for the Russian Federation.
Bottom Line: Investors know as much as much as we do about the outcome of the election (which isn't much). But that won't stop them from making bets...
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Notorious ACB?

President Trump announced Amy Coney Barrett as his pick to be the next US Supreme Court Justice.

Who is she? Amy Coney Barrett is a 48 year-old judge for the U.S. Court of Appeals for the 7th Circuit. She received her JD from Notre Dame and clerked under late Justice Antonin Scalia from 1998-1999.

Where does she stand on the issues: Barrett is a favourite among conservative activists and is expected to push the courts to the right if confirmed. Here's what you need to know:

  • As a professor at Notre Dame, Barrett was a member of the University Faculty for Life, an anti-abortion group, until 2016. She has previously expresssed her own conviction that life begins at conception.
  • Barrett disagreed with Justice Roberts' decision to uphold the Obama Administration's affordable care act and many believe she could threaten the health care of millions of Americans.
  • On the Seventh Circuit, Barrett consistently voted in favour of corporations. In a recent case, she ruled against drivers claiming that Grubhub owed them overtime pay they were entitled to.
What's next: Now that the President made the appointment, it's up for the Senate to confirm Barrett. In a controversial move, the Republican majority in the Senate is pushing to appoint Amy Coney Barrett before the Presidential election on November 3rd.

Senate Judiciary Committee Chairman Lindsey Graham has said he plans to hold a vote on confirmation as early as October 22nd.

However, the Democrats are currently assessing their options on if and how they could delay the vote till after November 3rd. Some ideas being brought up are an impeachment vote either against Attorney General William Barr or another vote targeting President Trump, both would delay the Senate's confirmation process.
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Put them on ICE

Hootsuite, the Vancouver-based social media management software company, has cancelled a contract with ICE (US Immigrations and Customs Enforcement) after a employee revolt over the deal.

ICE What? US Immigrations and Customs Enforcement (ICE) is the government agency responsible for enforcing cross-border crime and illegal immigration laws. Recently the agency has come under fire for the inhumane detention of illegal immigrants, including the forced sterilization of detainees.

How did Hootsuite get involved: Hootsuite sold ICE a contract worth of $500,000 USD which, according to ICE, would be used to educate the public about their work.

After learning of this deal Sam Anderson, a Product Trainer at Hootsuite, spoke out against it in a widely shared Twitter thread. Her thread forced the CEO of Hootsuite Tom Keiser to respond and announce that the company would no longer be participating in the deal.

Zoom out: An increasingly progressive tech workforce will continue to force companies to think twice about who they do business with.

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Canada's Next Unicorn?

The Globe is reporting that Wealthsimple is in talks with several US venture capital funds over raising a $100 milllion plus round that would value the company at over $1 billion.

The Backstory: The popular milennial financial company has grown significantly in the past five years:

  • In 2015, Wealthsimple partnered with Canadian financial services provider Power Corp. Since then, Power Corp and its wholly owned entities have invested nearly $315 million in the company.
  • Power Corp sees Wealthsimple as a bet on the future of financial technology (Fintech) and an opportunity to tap into a younger demographic that typically aren't clients of Power Corp's other assets.
Stocks Only Go Up: While Wealthsimple's main business, their robo advisory service, has grown to over $8.4 billion in assets under management, Silicon Valley is really excited about their Wealthsimple Trade product.

Wealthsimple Trade is the Canadian Robinhood, allowing you and I to trade without fees on an easy to use app. Similar to Robinhood, Wealthsimple's brokerage saw huge user growth over the pandemic and it's on pace to nearly triple in size this year.

Silicon Valley VCs who missed the Robinhood deal see a chance to get in on another fast growing online brokerage.

Why would they raise? Since Power Corp is worth nearly $17 billion and owns nearly 70% of the company, you wouldn't think Wealthsimple would need the cash...

But as we've talked about a lot over the past month, it's IPO szn. Wealthsimple is looking to go public and raising outside capital would give them external validation ahead of a public offering.
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Market Highlights

  • Oil: Trump to issue permit fro $22 billion railway between Alaska and Alberta to transport oil and other resources.
  • Europe: EU companies warned of 700,000 job loses in the event of a No Deal Brexit.
  • Deficit: The Government of Canada's deficit hit $148.6 billion through July.

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No More (Gas) Cars In L.A.

California is cracking down on gas powered cars. The state committed to banning the sale of gas-powered vehicles by 2035, an aggressive move designed to forcibly transform the auto industry. 
What happened: California Governor Gavin Newsom said that the sale of vehicles powered by gasoline and diesel will be illegal in California effective 2035. 
Why it matters: California is a huge market and automakers will not be able to survive if they cut themselves off from consumers in the state. This will accelerate the transition to electric vehicles.
Zoom out: Conventional cars are under pressure from multiple fronts, including better and cheaper electric alternatives and tougher regulations on emissions in multiple jurisdictions, including Europe and China.
What it means: The days of the internal combustion engine are numbered. 
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Q&A with Mindy Loverin

What and where did you study?
I did my undergrad at the University of Saskatchewan at the College of Commerce with a major in marketing.  Later in life I did my graduate degree at New York University earning a Masters of Science in Public Relations and Corporate Communications.

What did you do while in school that helped you land your first startup role? 
There are probably a few unintentional things I did during grad school that led me into startups, but I’d say the most impactful thing I did was to leverage the network I created during the program -- both with companies we did projects for and individuals. One of the companies I did intern-type of projects for was Shutterstock which led me into the world of marketing technology, the industry that FlashStock became part of.

What else did it take to end up at Flashstock? What can others learn from you who want to join an early startup?
First, I’d say entrepreneurialism is part of my DNA having grown up on a farm in Saskatchewan.  But I don’t think I realized that until I was actually part of the startup -- it’s more of something I’ve reflected on as I direct my career path.  When finishing up grad school, I felt like I was naturally drawn to the exciting world of startups which is probably largely to do with the entrepreneurial spirit and knowing startups are where you have space to build.  I held various corporate roles prior to grad school, and having the real life experience allowed me to see that startups might be a better fit.  
While in NYC I stumbled across someone who had also moved there from Saskatchewan.  Low and behold, he and his cofounder came up with the idea of FlashSock and after a brief discussion he learned that I’d worked with Shutterstock and thought I’d be interested.
The most helpful insights I’ve gained when it comes to joining an early stage startup: 
  1. Don’t just join a startup because your friends think it’s cool -- they are not for everyone.  Look inward to ensure you can tolerate the level of risk needed to forego a high paying salary and fancy title for a keg and ping pong table.
  2. Do something you care about as you will be far more likely to succeed.
  3. Leverage your network.  If you don’t have one, there’s no better time than NOW to start building one.

You’ve described yourself as a generalist, how does that type of role change as a startup grows? How do you keep yourself flexible in a growing company? 
I’m very much a generalist which I think is incredibly valuable as an early stage employee.  When you are launching the first version of your product, you’re usually just trying to get an MVP up and running in order to gauge results and customer insights.  Things can drastically change from MVP to future iterations and in order to adapt, people have to be flexible.  With that said, I think it’s important in small teams to define and agree on roles to avoid duplication of work -- resources are meant to be lean.
My role at FlashStock changed so much that I actually can’t count the various “titles.”  But the common denominator was being the person to get into an area of the business, understand what needed to be done and either build a process, inform product, or hire people in order to scale it.  Once it was working well, I’d move onto the next thing that needed attention.  So I went from building the first version of our global photographer community, informing product features needed to support it and hired people to manage it; next was client management, and then leading our strategic account growth.
I kept myself flexible with lots of yoga.  Just kidding!  I kept myself flexible by repeating the phrase “what is best for the business” at every stage of building/growing.  From there, it was pretty clear to work with the team to understand where each person should focus.

Flashstock was acquired by Shutterstock. What was that experience like, from a career perspective, what should someone think about while going through that process and working under new ownership? 
Overall, I’d say the acquisition came with a ton of valuable learnings.  It was my first startup experience let alone a successful exit, so experiencing the transition first hand was like a degree in and of itself.  The positives: I was able to work with teams to evangelize our product and create processes within the larger organization, speaking at events and owning different programs with resources we didn’t have as a startup. There are a lot of smart people at Shutterstock and it was great to work with them.  The negatives: things move slower -- that is just a fact when you move from a startup to a larger company, especially one that is publicly traded… and for good reason.  But it was tough to get used to, and frustrating when it felt like I no longer had as much influence or autonomy to make decisions quickly.

You’ve since left, what are you working on now, how do you position your startup experience towards what’s next? 

Yes!  I’m one of the crazy people who willingly left a salary on the table mid-pandemic.  But I have my sites set on building in the femtech space, so I’m currently laying the groundwork by building out my network to be more relevant to the space and gauging from the people who are already there where the “white space” is.  It may look like building something or joining something early stage.  But basically I’m rewinding my brain to 6 years ago and using the same strategies I had when building communities from scratch as part of FlashStock.  Needless to say, it doesn’t happen overnight but it’s part of the journey.

You’re an advisor, board member or mentor for a few different organizations, how can someone position themselves for these types of roles. How do you be a good contributor in these settings and what do you get out of them? 

The most important thing here is to only do them if you are actually interested in the initiative, organization, or startup.  If you don’t, it will just become another thing you feel like you have to do or attend, and that is not helpful to anyone involved.  To me, being a good contributor is to first understand what the other party’s expectations of you are as it can vary a lot and then contribute based on those expectations.

The main reason I usually get involved is because I’m either personally interested, want to learn and grow in that area, or have a genuine urge to give back to that community.  So when any of those goals are achieved, I get something out of it. 

In order to position yourself for these types of roles, leverage your network.  Most of my involvement has come naturally through conversations with leaders in the tech community.

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