Socially responsible investing

A rapidly growing, yet often misunderstood, investment category

November 23, 2017

Living and working out here in beautiful British Columbia, most of us are either active or implied environmentalists. We care about the air we breathe and the food we eat. We disapprove of toxicity in all its forms – from personal relationships to waste dumped irresponsibly in our rivers, lakes and oceans. We have values, in other words, standards that define us as individuals and direct the way we choose to live our lives.

More and more people are requesting that their personal values are reflected in the corporate values of the companies in which they invest. Our increasing number of so-called Millennial clients are an example of this, though the trend extends to many other demographic groups, too.

An often misunderstood investment category

This brings me to the issue of Socially Responsible Investing (SRI) – a rapidly growing, yet often misunderstood, investment category. For those of you beginning to think that I’ve gone wobbly on ‘traditional’ investments, think again.

Exceptional asset growth is, and always will be, The Funke Group mantra, wherever and whenever we can find it. But SRI is with us, it’s important, and The Funke Group has both the competency and the appetite to work with those of our clients who wish to pursue this exciting investment avenue.

Global Sustainable Investment Review, 2014

Although the data is three years old, the Global Sustainable Investment Review, 20141,
as reported in Forbes, observed that the rising trend toward SRI is not limited to the U.S. and Canada. The Review stated that ‘assets under management incorporating sustainability investment strategies reached $21.1 trillion globally as of the beginning of 2014, up 61% from the onset of 2001.’

The Review went on to report: ‘As a result of the growth, assets that use a sustainability approach accounted for 30.2% of all assets under management across the regions covered by the review, up from 21.5%.’

SRI Growth in Canada

More recently, and closer to home, The 2016 Canadian Responsible Investment Trends Report2 discloses that the SRI investment category has $1.5 trillion in SRI assets under administration and represents 38% of the Canadian investment industry.

Canadian pension funds are embracing the trend, with pension fund assets making up 75% of the SRI industry’s growth, increasing by $374 billion (45%) in two years. Meanwhile, individual investors’ SRI assets, according to the same report, are up 91% in two years.

SRI performance

One commonly expressed reservation about SRI concerns performance. Can I get comparable returns from SRI stocks compared with so-called ‘traditional’ investments?
Answer, yes you can.

In a report published on June 16, 2017, CNBC3 reviewed years of Morningstar data on the performance of socially responsible funds versus traditional funds and benchmarks and found that there is no significant performance drag.

Jon Hale, head of sustainability research at Morningstar, was quoted as saying: ‘Companies that score highly on ESG metrics (environmental, social and governance) show performance that is consistent with traditional benchmarks.’


The Funke Group will continue to follow the world of SRI investing carefully, qualified by an observant, unprejudiced eye for investment opportunity wherever it resides.

Stay tuned!

Geoff Funke
Senior Wealth Advisor
Scotia Wealth Management