Posted On March 29, 2018 By In Regulars With 232 Views

Common Cents: Ethical Investing – Why Bother?

by Viola Van de Ruyt – 

Has this crossed your mind? Here are three reasons why you might want to take another look.

Responsible Investing is an approach that incorporates environmental, social and governance (ESG) issues into the investment process.

Therefore, one reason is that pension managers globally, including our own Canada Pension Plan, now consider it an integral factor in managing money.

Let’s look at what the CPP Investment Board website has to say:

“At CPPIB we consider responsible investing simply as intelligent long-term investing. Over the exceptionally long investment-horizon over which we invest, ESG factors have the potential to be significant drivers – or barriers – to profitability and shareholder value. For these reasons we refer to what many call “Responsible Investing” activities simply as Sustainable Investing.”

Your RRSP and savings are your personal “pension,” so paying attention to ESG issues is another level of risk management.

The second reason is that with a wide variety of investment choices you can now align your personal values with your investment portfolio. Do you want to emphasize companies that are creating new clean technologies or support more diversity on corporate boards? Do you want to avoid investing in companies that treat their customers, employees and overseas suppliers in a negligent manner? There are investments that focus on each of these. Some take an approach of excluding companies that are “bad” and others focus on including those that are “best” in their sector. Some are motivated by removing potential risk in portfolios and others are motivated by long term societal change. What are your concerns?

And finally, there have been many studies globally that have put to rest the notion that investors won’t do as well if they include ESG factors. A simple comparison is the Jantzi Social Index as compared to the Toronto Stock Exchange Composite Index and the MSCI World SRI Index compared to the MSCI World Index. Take a look for yourself.

Three reasons: reduce risk, feel good, and have competitive returns. How does that sound?

For more information visit www.violavanderuyt.ca.

Viola Vanderuyt is an Investment Advisor with National Bank Financial (NBF). National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF Inc.), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF Inc.  NBF Inc. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

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