What is Socially Responsible Investing?

Socially Responsible Investing is the inclusion of Environmental, Social and  Governance (ESG) considerations into the management and selection of investments.

Many Canadian consumers like you are concerned about impacts of purchases on the environment and on the individuals involved in their production and distribution. Canadians reward companies that have strong commitments to environmental and social responsibility and good corporate governance.

This consumer trend translates into a strong interest in RIA among Canadians who know about SRI.

 

How can I invest responsibly?

We ask you about your personal values when discussing suitable investments.

There are different ways to invest responsibly. Investment managers may use one or more of the SRI strategies listed below in combination with important complementary strategies.

Funds using positive/best-of-sector screening seek out leading environmental-social-governance (ESG) companies within each sector in areas such as environmental protection, climate change, alternative energy, human rights, employee relations, aboriginal relations, executive compensation.

Funds using exclusionary screening exclude investments based on pre-determined ESG criteria. This can involve the screening out of shares in companies involved in controversial activities (e.g. weapons manufacturing or tobacco), the screening out of entire sectors, or the screening out of poor-performing companies.

ESG integration is the consideration of environmental-social-governance (ESG) factors in the investment decision-making process. It is different from positive and exclusionary screening in that it combines ESG data, research and analysis together with financial and other factors in making investment decisions.

Shareholder engagement influences corporate behaviour through various strategies including communicating with senior management and/or boards of directors, filing shareholder proposals, and proxy voting.

Thematic funds are investments that address specific sustainability issues or themes (such as climate change, food, water, etc.). Investments are directed to companies or industries that offer innovative solutions to existing problems or otherwise enhance sustainability practices.

Impact investing refers to targeted investments, typically made in private markets and aimed at solving social or environmental problems. Impact investing includes community investing, where capital is specifically directed to traditionally underserved individuals or communities, to businesses with a clear social or environmental purpose, or to revenue-generating non-profits.

We can address your questions about Socially Responsible Investing choices as part of an overall discussion of suitability.