Imagine your investment could make a difference in the world while still providing you with a competitive rate of return.  It can!

Sustainable investing is a progressive way of using your money to add financial value to your portfolio, while also helping to improve environmental and social conditions in the world around us.

It’s becoming clearer and clearer that a company’s financial performance cannot be separated from its impact on the environment.

Companies must operate in the knowledge that decisions they make today will shape the world our children must live in tomorrow.

Socially Responsible Investing (SRI) Creates Social Change.  We are recognizing the urgent need for a better way of living and doing business.

As an investor and consumer you can decide where you want to invest your money and MOST IMPORTANTLY where NOT to invest your money. 

Many people feel strongly about the political issues that confront the world today.  Yet ironically many investors are supporting companies that are in direct conflict with their own values.  Without even knowing it, we are part of the cause and effect.

By investing in businesses that share our moral, religious, ethical and political views, we can be sure that our money is doing more than increase our own standard of living – it’s shaping the world into the kind of place we think it should be.

Money if channeled wisely can actually fund remarkable change!

There is a growing demand for Socially Responsible Investing, also known as Sustainable Investing, Ethical Investing or Socially Conscious Investing. 

75% of Canadians are very likely to avoid the products and services of companies that they perceive as socially or environmentally IRRESPONSIBLE.

While every individual who practices socially responsible investing has their own specific interests and levels of concerns about Society and the Earth, many fall into a handful of general categories.

Environmental Issues, Healthcare, Human Rights, Community Investing, Product Safety, Corporate Governance, Executive Pay, Political Contributions, Fair Employment and Workplace safety are just a few of the issues to address.

Environmental Issues:

Concerns about the environment were one of the founding motivators for socially responsible investing.  Individual investors and mutual fund managers screen for incidences of environmental pollution, greenhouse gas emissions, deforestation and other corporate activities that can harm the ecosystem.  Such behavior can lead to regulatory fines assessed against the company or lawsuits in which it must defend its actions.  Both are a drain on the finances of a company and can impact short and long-term performance.

Health Care:

Socially responsible investors are concerned about universal health care and health care reform.  They notice how responsive companies are to offering affordable healthcare plans for employees.  While obviously a humanitarian issue, it’s also a valid bottom-line consideration.  A healthy workforce can also maintain a firm’s productivity level, while an attractive health care plan encourages valued employees to remain with a company and help maintain a high productivity level.

Human Rights:

In today’s global economy, socially responsible investors are interested not only in how a company treats its workers in this country but other countries as well.  Very often labor laws overseas are not nearly as protective of workers as they are in Canada and the US.  Some companies take advantage of such laws by moving much of their operations overseas.  These companies are NOT ATTRACTIVE to socially responsible investors.

Community Investing:

Community Investing is a popular SRI practice that can earn competitive returns while also helping communities in need.  Socially responsible investors recognize the lack of affordable housing, available healthcare and well-paying jobs in many communities throughout Canada and the US.  By investing money with Community Development Institutions or Community Development Venture Capital Funds, they can help finance growth in distressed communities through loans and training.

Product Safety:

Socially responsible Investors look for companies that have good practices of testing products and who consistently meet or exceed government requirements.  From an ethical perspective, they want to support companies that care about the consumer and avoid those who think only about profit.  By exposing consumers to toxic chemicals, faulty equipment, substandard machinery or other hazards, companies run business risks that include the cost of recalls, damaged reputations, litigation and loss of market share.  When those negatives occur, stock values suffer.

Corporate Governance:

Socially Responsible Investors believe that there is a direct connection between the ethics of Directors and CEO’s and the bottom line.  Companies who’s managers spent lavishly with corporate funds, lied to shareholders and ultimately saw the value of their stock plummet make a strong case for ethical investing.

Executive Pay:

Socially Responsible Investors take issue with companies that have huge disparities between CEO compensation and that of the rank-and-file employees.  For much of the past two decades the gap has been widening, as executives take home millions in salary, bonus and perks, while pay for middle managers and non management personnel has remained flat when adjusted to inflation. From a SRI viewpoint, this can undermine moral, prompt valued employees to leave and limit the growth potential of the companies in which they own stock.  Firms that compensate their employees equitably from top to bottom are more likely to increase shareholder value.

Political Contributions:

Large, well-funded companies can have an extraordinary amount of influence on elected officials, through lobbying and political contributions. Very often this activity goes unnoticed.  Socially responsible investors are interested in the political activities of their companies, where those firms are spreading their influence and for what purpose.

Fair Employment Practices:

SRI argue that companies that discriminate in the workplace by race, gender or age are really doing themselves – and society- more harm than good.  A diverse workforce brings the value of different perspectives and points of view to the management and operations of the company.  That diversity might lead to a better understanding of a firm’s customers and new opportunities in the marketplace.  A more concrete concern for investors is the potential liability that a company assumes if it disqualifies employees for advancement or installs different pay scales based on gender, skin color or age.  Some discrimination judgments against corporations have reached into the hundreds of millions of dollars.

Workplace Safety:

High performing and profitable companies treat their employees well in salary, benefits and their workplace environment.  Those employees respond through commitment to the company, motivation on the job and creative suggestions on ways to grow.  Not only are unsafe work areas dangerous and demoralizing to work in, they can lead to investigations, fines and other penalties by federal regulators.  Company closures, even temporarily of an unsafe facility can seriously impact a company’s bottom line – certainly NOT an attractive prospect for investors.

How do you want your investments to change the world?

More Information on Ethical Investing...

www.socialinvestment.ca
www.acuityfunds.com
www.ethicalfunds.com
www.meritas.ca
www.phn.com