Investment Trends

Socially Responsible Investing

Build a better world - and a stronger portfolio.

With environmental, social and corporate governance issues so prominent today, many people are thinking more about how the daily choices they make affect our world.

Through your portfolio, you can help build a better world while also achieving your financial goals. Socially responsible investing (SRI) has gone mainstream. And it's here to stay.

Social responsibility meets fiscal responsibility.

Today, more companies and investors worldwide are realizing that advancing environmental and social interests can also enhance the bottom line:

• In Canada, assets invested according to socially responsible guidelines total more than $503 billion¹.
• In the U.S., SRI has increased by 258% in the past 10 years².
• In Europe, the SRI market is valued at more than 1 trillion euros³.
• Australia, the U.K., Belgium, France, Germany and Italy have legislation requiring providers of investment products to disclose how they incorporate social, environmental and ethical considerations⁴.

SRI focuses on using investment capital to effect change in the corporate arena. By incorporating factors related to environmental sustainability, social responsibility and corporate governance (ESG) along with more traditional investment analysis, SRI enables you to make investments that are consistent with your financial goals as well as your personal values.

Dispelling the SRI myths.

Global warming, corporate accountability and other vital issues have made SRI a growing segment of the investment market - and common myths about SRI are being dispelled.

• Myth #1: "I can't make money with SRI."
  Established indices around the world show that companies that incorporate social and environmental standards historically deliver competitive returns.
  
  
• Myth #2: It's impossible to know if a company is doing what it says it's doing.
  SRI scrutinizes a firm's history, policies and practices relating to ESG criteria.
  
  "Environmental," "social" and "governance" are broad categories that elude hard data. But they do provide a starting point for analysis. For example, SRI analysis might examine a company's relationships with community groups and aboriginal organizations - then compare its actions with its stated policies. A company's pattern of behaviour is also considered. One environmental mishap may mean less if the firm is in a complex industry and has an exemplary record.
  
  Read about the process behind the RBC Jantzi Funds, RBC Asset Management's family of socially responsible funds.
  
  
• Myth #3: There's no such thing as a perfect company, so why bother?
  SRI acknowledges that most companies are more complex than simply good or bad. Instead, SRI identifies the companies in a sector that set high standards in the way they address ESG matters.
  
  This "best of sector" approach, pioneered by Jantzi Research, raises the bar for corporate behaviour by rewarding best practices. It also avoids eliminating entire industries (such as oil and gas companies) from SRI eligibility and evaluates companies relative to their counterparts.
  
  
• Myth #4: SRI doesn't really make a difference.
  SRI can give you a voice in the boardroom by using your investment capital to hold companies to a higher standard when it comes to ESG concerns.
  
  A powerful example is the Equator Principles. Launched in 2003, these are a set of voluntary guidelines that address environmental and social risks associated with project financing. The Equator Principles prevent leaders from financing projects that fail to follow defined guidelines. As of fall 2007, more than 50 financial institutions around the globe - including all 5 major Canadian banks - had adopted the principles.
  
  

How can you get started with socially responsible investing?

RBC Jantzi Funds bring together the proven investment management expertise of RBC Asset Management and the specialized capabilities of Jantzi Research Inc. A strong lineup of socially responsible fund solutions spanning Canadian, U.S. and international markets, the RBC Jantzi Funds enable you to achieve your financial goals while knowing that your investments meet stringent socially responsible investment standards.

Find out more about the RBC Jantzi Funds or talk to an advisor today.