Not too many of us will blurt out that they have no desire to be socially responsible.  Most of us would rather portray ourselves as being socially responsible (it sounds like what we should be).

The challenge that we face is incorporating this feel good attitude into a sound investment portfolio. This task is not as difficult as it might seem.

Proponents of sustainable investing must face this quagmire each day.  The root of the problem is often based on the vague and sometimes twisted idea of what it is to be a socially responsible investor. This uncertainty invariably leads all too many would be socially responsible investors to do what comes naturally to most of us busy humans...nothing.

Fortunately you have found this website and can now take one simple step towards the implementation of your very own SRI portfolio; all you have to do is click this link to set up an appointment.    

Defining SRI:      

There are essentially 3 pillars to socially responsible investing: social justice, governance and the environment. Each of these can have different implications to each of us personally, based on our past life experiences and our visions for the future.

To be socially responsible does not have to mean that you are against everything the oil sands stand for. Most, if not all, of Canada's SRI Canadian Equity Funds own companies doing business in the oil sands.  It can just as easily mean that you are fed up with the enormous bonuses being paid out to corporate CEOs and Directors or the lack of transparency when it comes to political donations.  Alternatively, you may feel that the gap between rich and poor in the world (or even at home in Canada) is simply getting out of control. Often, there is simply no right or wrong answers as to what it means to be socially responsible.  Furthermore, nobody, including me, has the right to judge you or force you into supporting values that you do not truly believe in.

My personal favorite definition of SRI is simply a term I feel is synonymous with socially responsible and that is Sustainable Investing.   What is the world going to hold for our great- grandchildren? Typically, society relies on governments to somehow spread the wealth created in our fair market system. That is, provide help to those that need it. Unfortunately, this system is broken in the minds and hearts of many. Governments are looking out for their own short term well-being and many of their forays into altruistic quests are often very short-lived once the books have to be balanced and the next election has to be won.

The rich and strong are getting richer and stronger using various political structures and the poor and weak are losing hope and dying. This path is not sustainable and is one of the key reasons people decide to seek out SRI portfolios. They are seeking out a way to encourage proper long term behaviours for corporations and governments. Specifically, the distribution of the worlds assets, not just standard measurements of wealth but things like air, water and food all need more than short term governments at the helm guiding the mother ship. These governments and their supporting cast of corporations often have goals that conflict with sustainable practices (often referred to as common sense).  There are a myriad of challenges ahead for the planet and its citizens and we can all be involved in nudging the vessel in the right direction. SRI provides a very real framework to help us little guys in this pursuit.


Frequently Asked Questions about SRI

1. Does socially responsible investing hurt investment return?

There is some sort of on-going belief that if you have a portfolio based on a SRI platform then you have to pay a price for having goals other than pure return. This is simply not the case. In fact, it can be argued that in the long term you deserve better returns since there is an extra level of analysis that goes into the stock selection process. This is particularly true once adjusted for the lesser amount of risk inherent in a portfolio built on sound values and good governance. There have been several studies conducted to analyze this very topic and most conclude that there is no reason to feel a SRI portfolio should have any negative effect on your investment rates of return.

2. Can I really make a difference?

Heres an answer you are not expecting: NO, probably not. Unless you are perhaps Warren Buffet or Bill Gates (who are both strong advocates for Responsible Investing by the way). However, as we pool our assets together things start to really happen - we all know the expression money talks. Today about 21.8% of the worlds wealth is invested with some sort of screening mechanism to help guide corporate and government decisions. That is $13.6 Trillion! This money can and does influence how decisions are made. At its basic root a stock price is a function of supply and demand no demand and the company will falter. Corporations are very much aware of this and are often looking to be perceived as good corporate citizens, regardless of what industry they are in.

Much of these assets have historically been at the institutional and foundation level but now we are seeing more individuals come on board to pool their resources to ensure sustainable practices are in place.

3. What will my portfolio look like?        

You will likely be very pleasantly surprised at what your portfolio will look like. You might even be hard pressed to find any reason not to consider it the best portfolio you ever had. That is, under the Private Investment Management (PIM) service offered by RBC Dominion Securities your portfolio will meet vigorous investment standards that match your personal investment goals. You will have a written and personalized Investment Policy Statement (IPS) that ensures we are in agreement of your goals and will outline the framework being used to manage your portfolio. In addition to being part of one of the best investment solutions available to Canadians through our PIM program you will have an extra level of care going into your portfolio as your investments will be further screened using Sustainalytics which is a global leader in sustainability analysis.