-0.7 C
Elmira
Wednesday, January 22, 2020
Connecting Our Communities

Investments have consequences

Socially responsible investing, which today comes without tradeoffs, is becoming mainstream, says Kindred study

TRENDING

EDSS student wins U.S. baseball scholarship

It’s January and nowhere near Florida, but St. Jacobs’ Blake Jacklin is in a baseball frame of mind....

News Briefs

Woolwich nixes traffic islands Displeased with the troublesome pedestrian islands installed during the Region of Waterloo’s reconstruction of Church Street...

Woolwich proposes 5% tax hike for 2020

Budget talks underway this week, Woolwich council is looking at five per cent hike in property taxes, a...

Woolwich looks to add green projects as part of climate action plan

Planting trees remains Woolwich’s priority in rolling out a 0.5 per cent greening levy on property taxes again...

THIS WEEK

Elmira
clear sky
-0.7 ° C
1.1 °
-2.8 °
63 %
3.6kmh
1 %
Thu
1 °
Fri
3 °
Sat
1 °
Sun
1 °
Mon
-2 °

Investment dollars can beget more than financial returns: there’s a societal benefit to be had if enough people put their money where their values are.

An organization with faith-based roots, Kindred Credit Union long operated on the assumption its members were more attuned to socially responsible investing – whether avoiding the likes of arms manufacturers or backing environmentally friendly undertakings – but a recent study shows that is in fact the case.

Moreover, the membership numbers are part of a broader shift to socially responsible investing, or SRI. A 2018 report from the Responsible Investment Association of Canada, for instance, notes that SRIs make up more than half (50.6 per cent) of the investment industry holds, up from 37.8 per cent just two years earlier.

The study carried out for Kindred puts some hard numbers to the belief its members are more likely to back ethical investments, said Frank Chisholm, the financial institutions director, brand and marketing.

“We thought it would be a good thing to delve into this even deeper … to test some of the presumptions,” he said of last week’s release of the study’s findings.

“That was our hope, that our members were more aware of socially responsible investing,” added Brian Barsness, director of investment services.

The study also included a survey of those in the wider community.

“We wanted to get an understanding of those outside our membership group.”

Kindred members are more attuned to SRI offerings, and the percentage is growing, along with awareness in the general public.

In surveying its members, Kindred found more than half deemed it “very important” to avoid companies involved with pornography/adult entertainment, military and weapons, gambling, and tobacco – a so-called negative screen to limit investments in such firms.

On the flipside, positive screens evaluate companies based on the good they do and strive to include those that engage in practices that support animal welfare, international labour standards, and the environment, for example. Some two-thirds of Kindred members said it was “very important” to have positive screens for transparency with the public and leadership being held accountable, as well as protecting or enhancing human rights.

Screening is a filtering process based on social and environmental criteria that are used to identify if an investment can be deemed socially responsible, Kindred notes.

Responsible investing involves a variety of values-based decisions, often boiling down to the preferences of individual investors.

The choices of the credit union’s members and the wider community reflect that philosophy, accounting for the growth in SRIs. And what’s driving that?

“That question comes down to the individual investors and their values,” said Barsness, who adds that the share of investments going into SRIs has more than doubled in the seven years since he joined the company, for instance.

“It has been growing in leaps and bounds, not only at Kindred but across Canada in the industry as a whole.”

Given the Anabaptist roots of Kindred – formerly Mennonite Savings and Credit Union – there’s long been a peace and social justice component to the membership.

Today, there are issues that are top of mind, from climate change and the environment to the MeToo movement and the link to pornography, for example.

“We believe there is a connection between investing, be it with time or money, and making a difference in the world. We want to support and empower our members to make financial decisions that have a positive impact on the world,” the Kindred study asserts.

Where once there was a component of sacrifice in socially responsible investments – both in terms of returns and in diversity in a portfolio – there’s been a 180-degree turn on that front, says Barsness, who notes elements of SRI have now gone mainstream.

In fact, SRI is “a better way to invest” due to the decreased risk, he added.

“There are numerous studies that show you don’t have to give up anything financially to invest responsibly.”

Controversies and public backlash can dramatically shift stock prices and even companies’ fortunes. Fines, lawsuits and other legal wranglings can ensue when a company isn’t operating on the straight and narrow. By avoiding such stocks in the first place, investors can buffer themselves from the downswings.

The ethics of some companies – think of the likes of Enron and the Wall Street firms responsible for the 2008 financial meltdown – can be a factor in one’s investments taking a nosedive. Again, avoidance can be a prudent move.

Given the shifts in investor thinking, a whole industry has emerged to assess the social responsibility exhibited by companies, the better to guide SRI.

The key now, says Kindred CEO Ian Thomas, is getting the word out so that more people can make informed choices.

“One of the elements here is our role as educators,” he said of a concerted effort to let people know their investments can make a difference.

“We tie it back to our members – what’s important to [them]. It’s linking values to objectives, painting a picture that the members have options,” added Thomas.

“We want people to be able to say ‘I can really feel good about what my investment is doing.’”

From individual investors making choices and the likes of Kindred Credit Union pushing for responsible investment, small moves can have a big influence on the broader market, Thomas maintains.

“Business can be a force for good.”

The financial services industry needs to make people aware of their options in that regard, added Barsness, noting Kindred has a role to play.

“We have to let our investors know that they can invest with their values.”

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to The Observer's online community. Pseudonyms are not permitted. By submitting a comment, you accept that The Observer has the right to reproduce and publish that comment in whole or in part, in any manner The Observer chooses. Please note that The Observer does not endorse the opinions expressed in comments. Comments on this story are moderated according to our submission guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

LIVING HERE

The new face of health promotion

There’s a new face around the Woolwich Community Health Centre. Gebre Berlihun has taken on the role of public health promoter after the retirement of 25-year employee Joy Finney in October.

In Print. Online. In Pictures. In Depth.

You obviously love community journalism. Thanks for visiting today. If you have a great local story, let us know.

Choir to bring the sounds of Africa to Elmira

Updated Jan 21, 2020: Due to unforeseen circumstances the Watoto Children’s Choir travel has been delayed, so sadly we will have to...

Applejacks extend winning streak to three

The new year continues to be good to the Wellesley Applejacks, who picked up a pair of wins over the weekend to make...

EDSS student wins U.S. baseball scholarship

It’s January and nowhere near Florida, but St. Jacobs’ Blake Jacklin is in a baseball frame of mind. That’s not a passing fancy,...

Kings win two more to keep streak alive

The Elmira Sugar Kings extended their 2020 winning streak and their hold on the conference standings with a pair of wins over the weekend.

New app a one-stop shop for region’s waste program

Not sure when your garbage will be picked up? What’s currently allowed in the recycling bin? There’s an app for that.
- Advertisement -