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Socially Responsible Investing 101

Environmental sustainability is a big part of what we do here at Coast Capital. We’re proud to be a Certified B Corporation®  which means that we meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. And this purpose even trickles down to the financial services and solutions we offer our members.

We don’t want our members to choose between high returns and environmental responsibility, we want our members to feel good about investing. And that’s why we offer responsible investments (RIs). In an opinion survey, the Responsible Investment Association (RIA) found that 77% of investors are somewhat to very interested in RI and 82% of investors would like to dedicate a portion of their portfolio to RI. So, to find out more about what it is, how to do it and why, we sat down with Mark Costello, an Associate Financial Planner here at Coast Capital who is also a certified Responsible Investment Specialist.

Ok Mark, take us back to the basics. What is responsible investing?

An example of RI is investing your money in companies that produce green technology, like solar panels, or avoiding specific markets like tobacco or firearms.

The RIA defines RI as the incorporation of environmental, social and governance factors (ESG) into the selection and management of investments.

So, what makes it responsible?

Responsible Investment managers use many different strategies to address core ESG factors. No matter the strategy or particular fund, RI aims to contribute to positive societal change. Some of that means excluding sectors, companies, projects or countries based on ethical, moral or religious beliefs from being in your portfolio. Or impact investing, which means you make investments into companies, organizations, and funds to produce a measurable, beneficial social and environmental impact on top of a financial return.

Why should people do it?

Personally, I believe investing responsibly is an important step to take toward a more sustainable world. The RIA has shared that there is growing evidence that RI reduces risk and leads to superior long-term financial returns. In addition to the clear benefits of positive societal change and peace of mind that your holdings are ethically invested, you can also count on reduced risk and great long-term returns to fund your financial goals.

Responsible Investing addresses the need to balance ethics and return.

How are the returns compared to non-responsible investments?

RI has been found to provide higher risk-adjusted returns when compared to other funds and benchmarks. The RIA stated, in another study conducted by Carleton University, that RI equity mutual funds in Canada financially outperformed their respective benchmarks 63% of the time.

Companies that don’t apply ethical or responsible practices sometimes run the risk of bad news stories and can be exposed to loss of value or divestment. With RI, you hedge against bad headlines, and with more and more large companies applying responsible practices, the responsible investment space benefits from better returns.

How do you know if the money goes where it’s supposed to go?

Responsible Investment Fund Managers understand it’s important to share the impact of their fund, in addition to financial performance. That’s why many Fund Managers release timely reports outlining specific ESG results relative to the strategy they apply. Some reports can include a reduction of carbon emissions, gallons of water saved, the diversification of a Board of Directors, or the exclusion of companies that have unethical working conditions.


Thanks so much to Mark for sharing his expertise with us

If you have any investment questions or would like the help of our experts to explore what the right investment portfolio looks like for you, talk to us. We’re here to help.


The stuff we have to say.
Coast Capital Savings Federal Credit Union provides advice and service related to deposit, loan and mortgage products.  Only deposits held in Canadian currency, having a term of five years or less and payable in Canada are eligible to be insured under the Canada Deposit Insurance Corporation Act.  Coast Capital Wealth Management Ltd provides investment and financial planning services. Coast Capital Financial Management Ltd. provides advice and service related to segregated funds, annuities and life insurance products. Worldsource Financial Management Inc. provides advice and service relating to mutual funds. Mutual fund values change frequently and past performance may not be repeated. Commissions, trailing commissions, management fees and expenses may all be related with mutual fund investments. Important information about mutual funds is contained in the relevant fund facts and simplified prospectus. Please read the fund facts carefully before investing. The views expressed here are those of the authors and writers only and not necessarily those of Worldsource Financial Management Inc. It may also include forward looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward looking statements will not prove to be accurate.

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