SRI Investing

                Is it possible to invest money for one’s retirement and still be socially or environmentally “responsible”?  The short answer is absolutely!  In fact, the steady growth of this type of restricted investment mandate over the years is a testament to the viability of this category. In order to better serve my clients with these specific needs, I have obtained the Responsible Investment Specialist (RIS) designation offered by the Responsible Investment Association of Canada.

                Socially Responsible Investing (SRI) can be defined as a strategy in which the portfolio manager must first select investments based on a set of predetermined SRI criteria.  Before inclusion in the portfolio, his companies will have to meet the strict definitions in the area of environmental stewardship, corporate governance, economic sustainability, social responsibility and human rights.  After clearing this first test, the companies will then have to meet the other normal investment selection criteria before being considered for inclusion in the portfolio.

                This means that, by definition, the manager will not be able to select companies from the whole investable universe, thus giving him a “restricted universe” to pick appropriate investments from.  In spite of these limitations many investment management companies have now specialized in SRI mandates and their risk reward attributes are very impressive.  It is therefore possible for people to meet their financial objectives while using SRI vehicles and have a well diversified portfolio.  Clients were faced with limited SRI choices 25 years ago.  The gradual changing nature of our society has led to the evolution of the SRI universe to meet this new demand.  The availability of high quality SRI products today makes it possible for individuals to do both:  invest without compromising their own values and reach their financial objectives.

                Before deploying money in an SRI solution, it is advisable for the investor to get familiar with the portfolio manager’s restrictions as not all SRI mandates are the same.  The SRI world has clearly evolved over the years yet possibly not enough to be able to satisfy all of one’s values. These differences can make one mandate suitable for one person and not for the other.  Possible disappointments can best be resolved by each person doing their homework to clearly understand what each SRI mandate is all about. I will help you with this.