Socially responsible investing

Every year, more and more people are turning to Socially Responsible Investing (SRI) when it comes to making their RRSP contributions. Investors realize that they actually stand to make financial gains while choosing to invest along socially or environmentally responsible lines.

The options currently available on the market make use of three basic approaches to ethical investing: screening, shareholder engagement and community investment.

Screening

Some funds use specific criteria to select the companies they invest in.

Positive screening involves choosing companies that stand out for their good social or environmental performance. Negative screening, on the other hand, excludes companies whose profits come mainly from commercial activities linked to industries like armaments and tobacco, for example. Whatever the screening method, fund managers seek to invest in well-known companies with strong financial performance.

Desjardins currently offers socially responsible investments that make use of this strategy: the Desjardins Environment Fund and the SocieTerra Portfolios.

Shareholder engagement

Another common responsible investment practice involves using collective shareholders' leverage to engage companies in dialogue about their social or environmental performance.

Here, SRI funds, such as those included in SocieTerra Portfolios, invest in mainstream companies and use their voting rights at shareholder meetings to influence corporate policies on key issues.

Community investment

Those interested in using their investments to stimulate their local economy can turn to community investment. This gives a boost to entrepreneurs who are working on viable projects but otherwise have difficulty accessing capital.

Typically, community investors support socially beneficial projects such as the construction of cooperative housing units, the integration of new immigrants or marginalized people into the workforce and recycling programs.