Do good while you do well


Do good while you do well
For some, investing is about more than making money: it's about making change

By Gail Vaz-Oxlade
First published in Chatelaine's June 2002 issue.
©Gail Vaz-Oxlade

Montrealer Brenda Plant is passionate about investing. It's not that she's all caught up in making money. Nope. Plant's focus is on using her investments to make a difference in the world. "My values come out in pretty much everything I do," says Plant. She's a socially responsible investor.

While the idea of socially responsible investing (SRI) has been around for centuries, it reappeared in the late '70s, but didn't really catch on until the late '80s and early '90s. That's when investors turned away from investments in South Africa to make a statement against apartheid. Those investors started a trend: since then, more and more companies have initiated corporate codes of conduct.

How does it work?
About three years ago, Plant joined Ethical Investors Group, a Montreal-based investment club that maintains a portfolio solely made up of socially responsible investments. "Sixty per cent of our portfolio goes into publicly traded investments while 40 per cent goes to community investments," she says of the group's strategy.

Plant's group excludes companies from investors' lists that it thinks aren't up to snuff ethically: corporations that profit from weapons, tobacco, gambling or nuclear power. Instead, it looks for companies that have forward-thinking policies with regard to employee relations, human rights and the environment.

Socially responsible shareholders want their voices heard and they get involved in the day-to-day operations of the companies in which they've invested. What can one person do to influence a big corporation, you might ask. A lot. When some Home Depot shareholders requested a plan for the retailer to stop selling old-growth wood, the company responded. As of this year, Home Depot will stop buying three different species of timber from endangered forests.

Can you make any money?
Investment wisdom has long held that making social judgments in the investment process will significantly limit your returns. That's a myth. In fact, it's entirely possible that "good" companies--ones that are more environmentally friendly and treat employees well--end the day with fewer liabilities (read potential lawsuits).

Academic studies in both Canada and the U.S. say socially responsible investment funds can perform just as well as any other. A recent study conducted at the University of Western Ontario in London showed that during the five-year period from January 1995 to December 1999, the annualized compound returns for Canadian socially responsible mutual funds ranged from 13.5 to 22.2 per cent, with the composite earning a return of 16.7 per cent. Over the same period, the annualized compound return for the non-SRI benchmark was 18.6 per cent.

How do I practise SRI?
At last count, there were 48 socially responsible mutual or labour-sponsored investment funds in Canada. To see who's in the game, visit the Social Investment Organization's Web site at Want to build your own SRI portfolio? You'll have to do some homework. I recommend The Fifty Best Ethical Stocks for Canadians (Macmillan) by Deb Abbey and Michael Jantzi and The Ethical Investor: A Guide to Socially Responsible Investing in Canada (Stoddart) by David Skinner.

The last step is to seek out an investment adviser who specializes in SRI. Yes, they do exist, but it will take some work to find them. Ask around and check with the Social Investment Organization. Then it's simply a matter of putting your money where your conscience is.

Gail Vaz-Oxlade' s latest book is Dead Cat Bounce: The Skinny on E-vesting (Prentice Hall). She can be reached at


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