Article Tools
Socially responsible investors mix ethics with investing. They like to own shares in companies that are not only good investments but also good citizens.
Companies that seriously harm society — such as cigarette manufacturers, polluters, and accomplices to grave human-rights violations — are usually screened out. Less-than-perfect companies linked to lower levels of mischief may be screened in if they are making efforts to become more responsible. And once invested in a company, the socially responsible investor will engage management in a dialogue aimed at moving the company toward more sustainable and humane paths.
Many empirical studies in peer-reviewed journals have found that socially responsible investing (SRI) performs at least as well as non-SRI investing. An authoritative survey of 20 key papers in the literature concluded: “On balance, the evidence suggests that there at least does not appear to be a performance penalty from taking wider [ethical] factors into account in the investment management process.”
SRI is catching on with pension funds, notably the Canada Pension Plan. Many now incorporate SRI criteria into their selection process not just for altruistic motives but also because they believe it makes for better investing results over the long run.
That’s because a company that scores low on the responsibility scale is at higher risk of being on the wrong end of expensive court settlements, government-imposed restrictions, boycotts, and other off-balance-sheet liabilities. Such “hidden” costs need to be taken into account when analyzing the firm’s long-term potential for generating a return on investment. Furthermore, institutional investors in socially irresponsible firms also risk becoming the object of lawsuits themselves.
So how does one go about becoming an ethical investor? It’s easy with all the information resources on the Internet. All one needs to know is where to go. Here are, in my opinion, the top 10 websites for ethical investors in Canada.
1. Socialinvestment.ca provides a guide to the 70 or so SRI mutual funds in Canada, as well as the dozens of Canadian financial advisors with a full or partial SRI practice.
2. Seekingalpha.com’s ETF Selector section covers clean-technology and SRI-focused exchange-traded funds (ETFs) in the U.S.
3. iShares.ca has a summary of its Canadian SRI-focused ETF.
4. Clean Break is the exhaustive blog of Toronto Star energy columnist Tyler Hamilton on “trends, happenings, and innovation in the clean technology market” and it comes with plenty of links to clean technology companies, sources, and blogs.
5. Jantzi Research is the standard bearer in Canada for the evaluation and monitoring of “the environmental, social, and governance (ESG) performance” factors related to securities in Canada and around the world.
6. Corporate Knights is a Canadian magazine devoted exclusively to corporate responsibility and it publishes interesting surveys such as the annual Best 50 Corporate Citizens in Canada and the annual Global 100 Most Sustainable Corporations in the World.
7. Ethical Funds is the largest SRI mutual fund in Canada and its website contains a lot of informative material for those wanting a better grasp of SRI.
8. Stephen Whipp is a SRI financial advisor and his website has links to many informative articles.
Rate this article
