Socially responsible investing (SRI), also known as sustainable or ethical investing, is a values-based strategy that seeks a financial return while doing social good.
This term is now widely recognized across firms and portfolio managers worldwide. It is well understood that where we choose to invest our capital has an incredible, and potentially positive, impact on the place we live and society as a whole. But that wasn’t always the case.
Stephen Whipp with Stephen Whipp Financial, a division of Wolverton Securities, was one of the early adopters of ethical investing practices.
“We were always the hippies”, he says. “The financial industry is the last bastion.”
Though the uphill climb required much effort on the part of Stephen’s firm to educate clients, the public and the industry, he says the hard work is paying off. “Now, our team of advisors and support staff is growing and we are busier than ever before.”
Why? Because the tides are shifting. Across the world and even in conventional firms, you will now find ethical investment portfolios. Though not all such portfolios are created equally, this change speaks to investor demand and a general understanding of values-forward investing.
SRI encourages investment in companies that promote environmental stewardship, consumer protection, human rights and community development. Some portfolios avoid investments in areas such as weapons, certain fossil fuel production methods and gambling.
The areas of concern recognized by the SRI industry are summarized as “ESG” issues: environment, social justice, and corporate governance. Portfolios often focus on avoiding harm, but now, they are expanding to favour proactive practices to realize an increase in human well-being. Activities in this space include impact investing, community micro-lending and social entrepreneurship.
Despite the mass uptake of SRI, there is still a lingering sense that ethical investments do not provide the same returns. As Whipp states, “The industry has been far behind,” but mould-breakers like his firm, and other local leaders such as Vancity Credit Union are grabbing the torch and providing returns on ethical investments.
Our dollars spent now shape the future we will live in. Arguably, responsible investment will grow from a subsection of the financial industry to the future of the financial industry as a whole.
Today, it is still a choice the individual or company must make. Do you invest locally, ethically, and by what standards? Do you adopt a framework, or create your own policy?
The choice is yours and the options are available to invest profitably, leading with your values.
Jill Doucette is the owner of Synergy Enterprises, a green building consulting company. Stephen Whipp Financial is certified by the Vancouver Island Green Business Certification Program and is featured in Greening Your Office: Strategies that Work, by Doucette and Lee Johnson. Find VIGBCP on Facebook.