Socially Responsible Investing

Posted 17 Feb 2015 by Rick Irwin, CFP, CLU


When investing your savings, meeting your financial goals is clearly important, but to many, meeting them in a socially responsible way is equally important.

WHAT IS SOCIALLY RESPONSIBLE INVESTING?

“Socially responsible investing includes all of the financial decision-making processes that are a part of a prudent investment management process, but it also includes the selection and management of investments based on issues of sustainability or social responsibility” says the Canadian Social Investment Organization”, a network of firms in the industry committed to Socially Responsible Investing (SRI).

In practice, SRI encompasses the following considerations, on top of typical financial analysis:

  • Positive and negative screening of environmental, social and corporate governance factors: in some cases, companies involved in gambling or tobacco may be excluded and in others companies that exhibit best-in-sector human rights, environmental policies or employee relations may be included
  • Community investment: investment of money into community development or micro-enterprise initiatives that contribute to the growth and development of communities, particularly vulnerable communities
  • Shareholder Advocacy: This relates to the process of using shareholder influence to help bring about positive social or environmental change in corporations

In this often cynical time many investors are looking to align their core values with their investment goals and Socially Responsible Investments are slowly gaining traction as a result. If you’d like to discuss further whether SRI funds should be a part of your portfolio, do not hesitate to get in touch.