We believe sustainable companies offer long-term value.
Investors are recognizing that they don’t have to choose between seeing good returns and supporting worthwhile causes. Socially responsible investing (SRI) enables them to make investment decisions that align with their values while also reducing financial risk and achieving stronger long-term financial performance.
SRI involves choosing and managing investments based in part on how companies impact people and the planet, and how they manage their businesses and operations. It’s an investment approach that considers environmental sustainability, social responsibility, and corporate governance risks (ESG) when making investment decisions.
In addition to evaluating the financial benefit of the investment, SRI involves:
- Choosing not to invest in companies involved in potentially harmful industries, such as tobacco, nuclear power, pornography, or gambling.
- Choosing to invest in companies that are working toward making the world better for people and the environment.
- Choosing to invest in impact areas—companies or projects dedicated to solving specific problems for the environment or society.
- Choosing companies based on their environmental, social, and governance (ESG) performance.
Support for this type of investing is growing: SRI products now make up over one-fifth of assets under management in the United States and one-third of all assets under management in Canada.
80% of BC residents say they have either invested in SRI or are interested in doing so.1
47% of B.C. residents would move their money out of an investment in an unethical company.1
Companies showing strong commitment to sustainability outperform traditional investments.2
2 Eccles, Robert G., Ioannou, Ioannis, and Serafeim, George. “The Impact of Corporate Sustainability on Organizational Processes and Performance.” Harvard Business School.
About socially responsible investing
When selecting investments for the Vancity Investment Management (VCIM) portfolios, attention is given to factors, other than financial factors, that are identified as critical in the overall evaluation of a company’s prospects for future returns. We believe that by doing so, we can provide returns through an extra level of risk mitigation and added alpha.
The investment decision making process looks to insights derived from fundamental financial analysis and an assessment of an issuer’s performance respecting environmental, social and governance (ESG) practices such as corporate governance, employee and community relations, environmental management, diversity, human rights, and sustainable products.
Responsible investment is incorporated into the investment process using screening, engagement and proxy voting.
VCIM’s advantage with SRI
Once VCIM invests in a company, the shareholder engagement tool allows for further enhancement of value by encouraging environmental, social and governance best practices. Shareholder engagement includes:
- direct dialogue with company leaders and board of directors
- shareholder proposals
- proxy voting