Thursday, February 28, 2008

more grabbin your green

Ethical investments are the new black for many, especially those who make regular contributions to an RRSP. To be sure, return on investment is a key factor in deciding, but for those of us out there who have leafed through company litterature...okay, pamphlets, or read banking websites trying to make sense of clustered investments like mutual funds and RRSPs, information on the ethical standing of companies included isn't out there in the open.

Also, everyone has different and equally valuable ethical standards by which to judge a company or business practice. So how does one person apply those standards to a fund? Several options are now available.

The Ethical Canadian Index is an excellent place to start if you want funds that can perform, but also meet vigourous social standards. The index is related to funds in the TSX and their financial information is maintained by Standard & Poor. From there, the Sustainability Scorecard (I love this) measures the environmental, social and governance indicators of a company and compares it to the rest of the industry. From that basis, further elimination is done of companies whose main business focus is unethical such as tobacco, firearms manufacturers and uranium mining companies. This is basically everything I've ever wanted in a stock index, as my personal beliefs will indeed drive the direction of my cashflow (limited as it may be).

But not everyone looks first and foremost to the same indicators I will. What if your main concern is that businesses in whom you invest agree with your religious principles? How are their employees and partners treated? There are now very aggressive religious funds available for the devout investor.

frontierALT Oasis Funds offer excellent returns with global investments based on shari'ah principles. The concept of sukuk allows for return on investment from profits in the companies invested without interest. Interest is not permisable in Shari'ah ethics, and so this fund has a way around it for investors who insist on getting a return, but not by compromising beliefs.

Advisors with Purpose is a network of Christian financial advisers who steer investments in projects and companies who agree with Christian ethics. Their website is not as information-rich as frontierALT Oasis, but there are still strong mentions of the treatment of your fellow man, that includes living wages for employees in developing countries, and environmental sustainability.

There are many others, but the point is that now it is easier to be mindful of investments. Instead of having to open an investment account or pay broker fees and then monitor each separate company for business practices and projects with which you may or may not agree, RRSPs and mutual funds are available for the socially and environmentally conscious, at an equivalent return.

Grab your green girls, and should anyone come across a business or project directly related to the promotion of women worldwide and/or companies run by women, the indicators in all three funds I just mentioned do not evaluate the status of women in the companies or the effects on women that company projects will have. It's a great start, now we just have to remind ever-greening Bay street that sustainability includes fellow-persons, not just fellow-men.


Ron Robins said...

Clearly, socially responsible investors will frequently disagree about specifics. However, I believe that if everyone does invest according to their personal values, then, since so many of core values are alike -- and are supportive of higher ideals -- that in the long run, only companies employing these higher values will truly prosper.

Incidentally, I've been following socially responsible investing for forty years. For readers interested in the latest relevant news and research, they might find my site quite helpful. It's at

Best wishes, Ron Robins

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