Making A Difference Through Socially Responsible Investments

–   A Public Meeting On How You Can Invest Your Money In Ways That Have Positive Social And Environmental Impacts

 A Note from Niagara At Large – This Thursday, February 9, two public interest groups, Climate Change Niagara and the St Catharines and District Council of Women, will be hosting a public meeting  at the St. Catharines Centennial Library on 54 Church Street featuring Eugene Ellmen, executive director of the Toronto-based , not-for-profit Social Investment Organization.

Eugene Ellmen will talk about opportunities for all of us invest and spend our money in ways that lead to positive social and environmental change.

The February 9 meeting begins at 8 p.m. and is free to the public. Posted below is an article by Eugene Ellmen on socially responsible investing.

By Eugene Ellmen, A Special to Niagara At Large

In these times, when economic conditions and social and environmental problems appear ever-more difficult, Canadians seem to be losing faith in their power to make a difference in the world.

Eugene Ellmen, a natioanl advocate for socially responsible investing

Sustainable solutions — the pathways to balanced approaches between economic needs and social and environmental imperatives — seem increasingly distant in these polarized times.

 Yet millions of Canadians have not lost faith. Faced with difficult problems like global warming, many Canadians are taking sustainable solutions into their own hands. They are making consumer and investment decisions that personally contribute — even in a small way — to addressing such issues.

There is a rising belief by consumers that they can make a direct impact on the world through their purchasing and investing decisions. It’s a reflection of a growing sense of responsibility for the consequences of consumer behaviour. Just as many corporations are beginning to measure and reduce their social and environmental externalities, individuals are also taking greater responsibility for the waste they produce, the resources they use, the communities they affect and the people they harm through their personal consumption.

If quality and price are equal, consumers are shifting their purchases and investments to products and services that contribute to more responsible communities and a more sustainable environment.

You can see it in rising demand for organic, natural and local food. You can also see it in growing sales of fair trade products, such as certified coffee, which earn decent incomes for the farmers and communities that produce them. And you can see it in growing interest in alternative transportation and power production, such as electric and hybrid vehicles, and renewable energy.

And you can also see it in investment. In Canada and around the world, demand is growing for socially responsible investment (SRI), which uses a variety of approaches to channel assets into responsible and sustainable companies, to exert influence in the markets through shareholder action, and to invest in enterprises with community and social impact.

The Canadian Socially Responsible Investment Review found that SRI assets of investment managers, mutual funds, retail venture capital funds, renewable energy trusts and community impact funds in Canada grew from $54.2 billion in 2008 to $66.0 billion in 2010. This is an impressive record of growth given the slump in capital markets that began in the fall of 2008.

In Canada, socially responsible investment uses a variety of approaches, including:

 1. Selective screening. Mutual funds and advisors work with investors to identify screens like tobacco, the environment, child labour, cluster munitions and other egregious practices to screen out particular companies. Conversely, many funds and advisors use positive screening to select companies that are sustainability leaders or at the top of their sectors in social or environmental performance.

2. Shareholder engagement. Many investment funds, pension funds and other institutional investors are actively engaged with companies in their portfolios, meeting with management on issues of social and environmental significance. The aim is to exert shareholder power to improve corporate sustainability. This strategy has had some surprising victories in Canada and abroad, in areas such as the oil sands, executive compensation, human rights and labour issues.  

3. Impact investment. Many investors are placing money with community funds, non-profit enterprises or social-purpose businesses that are having a big impact in local communities. Some of these businesses employ disadvantaged individuals, or otherwise contribute to community betterment. Many of these funds operate in Canada; some also operate internationally.

The issues that are in the headlines on a daily basis – global warming, international unrest, financial turmoil – are driving Canadians to change their purchasing and investing decisions. Socially responsible investment will attract growing interest as Canadians look for a tool to express their social and environmental concerns through their financial decisions.

Eugene Ellmen is Executive Director of the Social Investment Organization at http://http://www.socialinvestment.ca/, Canada’s national association for socially responsible investment. He will be speaking at a public meeting sponsored by the St. Catharines and District Council of Women and Climate Action Niagara on Thursday Feb. 9 at 8:00pm at the St. Catharines Centennial Library, 54 Church Street.

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