Let me count the ways
by NANCY ZIMMERMAN
So I saw The Corporation, I saw An Inconvenient Truth, and I know the sordid sagas of corporations like Halliburton and Enron. It’s enough to make you swear off investing forever, and, in fact, one woman in my (former) investment club did just that. “It’s all dirty!” she cried. “I’m outta here!” I empathize.
There’s little old me with my middle-class income on the one hand. There are great big corporations we love to hate on the other. And somehow I need to bridge the two if I hope to retire in a manner to which my dachshunds have grown accustomed.
With Socially Responsible Investments (SRIs), we can stop holding our noses as we embark on the journey of reconciling our personal values with our wealth-building goals and invest in corporations. I need to digress here to define SRI, just in case you aren’t intimately familiar with the term. If you find yourself repulsed by corporations that deal in tobacco, create pollution, outsource to sweatshops, or take part in many other unethical and environment-endangering activities, you’ll welcome corporations that avoid them. And if you’re going to support responsible corporate behaviour, you have to find ways of using social and environmental criteria in the selection of the investments in your portfolio. There are two major approaches to doing this.
Do It Yourself
You can buy the stock of any company directly, which means you have to do your homework in order to hit the sweet spot of SRI. One of the best ways to get started is to check out the Social Investment Organization at socialinvestment.ca. It’s the trade association for the SRI industry in Canada and a rich resource to acquaint yourself with the various components and players in the SRI field. I particularly like their “Related Practices” button—it’s a motherlode of information providers.
Of course, doing it yourself means you’ll need to keep vigilant, join an investment club, or have a friend deep into SRI investing who can lend a helping hand. The trick is to not only keep your investments “clean” but also get acceptable returns on them.
Let an SRI Professional Do It
Or you can get a professional to invest for you. There are mainstream financial planners who offer some SRI options along with their regular “unscreened” financial products. However, for optimal choice in order to tailor your investments to your values, there are financial planners who specialize in SRI and offer a wide variety of SRI financial instruments.
The choices are based on a range of “screens” that various SRI mutual fund companies use to pick their portfolios. (Sustainability analysts spend their days reviewing, deciphering, interpreting, and distilling information to provide scorecards on various corporations.) There are lots of different screens—or biases, if you will. For instance, some won’t invest in defense and military, some won’t invest in tobacco or gambling, others avoid nuclear energy, while still others are more concerned with social issues like sweatshops.
While we can recycle, drive hybrid cars, or buy fair trade products, socially responsible investing offers us a much broader way to vote with our wallets. In becoming shareholders in corporations, we send a loud and resounding message that we want it all. We want profitable companies, and we want them to closely reflect our values and convictions.
Nancy Zimmerman is a money coach whose dachshunds make frequent cameos in her blog, nancyzimmerman.com.
