What’s in your house of ethics?
Not all SRI funds are created ethically equal. Most of them refuse to invest in tobacco companies and manufacturers of land mines and other instruments of war, for example. But after that, what is, or is not, considered an acceptable investment is wide open. You might be surprised to learn that mining, chemical and oil and gas stocks are represented in some SRI funds. Others include companies with ties to gambling or alcohol, but screen out those with problematic employee relations or social justice issues. If you’re going to go to the trouble of investing in an ethical fund, you probably want to make sure those screens jive with your general moral code.
What’s in your house of ethics?
Prius-driving Toronto theatrical agent and SRI investor Shari Caldwell refuses to hold any mining stocks, for example. “I have no doubt that some are more environmentally conscious than others,” she says, “but I don’t want to have anything to do with any of them.” Maltby has different concerns. “I don’t smoke,” she says. “And I wouldn’t be happy to invest in tobacco companies or companies that employ slave labour in under-developed countries. In fact, infractions on human rights are probably the most important to me.”
To determine what sort of screens a specific socially responsible fund uses, turn to its prospectus. But your best source of information on SRI funds and stocks is probably an informed financial adviser — if you can find one. Sucheta Rajagopal, a financial adviser with Hampton Securities in Toronto and a specialist in SRI, uses a questionnaire to suss out her clients’ moral sensitivities, and then suggests investments accordingly. “It really comes down to what you think is harmful,” she says. “If you have a couple of drinks yourself, then you probably don’t believe there’s anything wrong with holding an alcohol stock.”
