Rights & Money

Let Your Conscience Be Your Investment Guide

It is possible to make your investments line up with your values and still make money

By Katrina Caruso

More and more Canadians want their investments to be consistent with their beliefs and values. Rather than focusing solely on their financial gains, many investors also care about the social and environmental impact of their investments. To that end, they opt for Socially Responsible Investment (SRI); the idea is to avoid investing in companies that do things you don’t support and to invest instead in those committed to things you do support.

Canadians concerned about climate change and renewable energy, for example, are choosing to avoid industries such as coal mining. Many Canadians are also interested in investing in companies based on their overall management practices and treatment of employees. Seeking out companies that do or don’t create or sell certain products (for example, avoiding companies that sell addictive substances) or investing in companies that are engaging in social justice, charity efforts, and sustainability might be your focus.

SRIs can be made in individual companies or through a socially conscious mutual fund or exchange-traded fund (ETF). A benefit of mutual funds and ETFs is that you can invest in multiple companies, across many sectors, with a single investment.

If you’re interested in SRI, you need to do some research before you invest.

Questions to ask yourself:

  • What are the business practices and are they environmentally friendly?
  • Are the company’s beliefs progressive?
  • How solid is their governance model and does it align with your views?
  • Are there other ways for your investments to have an impact?

You should be reading through the prospectuses of funds to find out fund managers’ specific value systems, so that you can be sure that they align with your beliefs. As these kinds of investment opportunities grow, more and more funds are available to investors, so it’s important to identify the investments that are right for you.

Photo: iStock/enciktep.