All Articles  / Sep 24, 2019

Make Peace With Your Money

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What does it mean to make peace with your money? At Kindred, we believe that when your values and faith are connected to your finances, you can have greater peace of mind. At the same time, your investments are making the world a more peaceful place, while also providing a return on your investment.

Working with a trusted advisor who knows SRI products well, and who is willing to take the time to help you build a customized portfolio, can bring a lot of clarity to the increasingly complex world of investing.

Let’s put that into context with an example. If working towards a more peaceful world matters to you, you likely wouldn’t choose to support war. So…do you know if your investments include companies that profit from the production of weapons, military software, or other war-related commodities? Well, that’s where socially responsible investing (SRI) comes in.

Today, Canadian investors have more opportunity than ever to choose investments that connect with their values. Yet, it’s important to realize that each investment has a different approach to social responsibility, so you need to understand your options.

Reflecting your values

One of the main things to consider is the investment company’s approach to screening. Some SRIs screen for alcohol and some don’t. Some mutual funds screen for military weapons and contracting, but may not screen for all weapons manufacturing—which is an important distinction, depending on what you value. Working with a trusted advisor who knows SRI products well, and who is willing to take the time to help you build a customized portfolio, can bring a lot of clarity to the increasingly complex world of investing.

There’s a lot of excitement and growth in the SRI industry right now. As values-based investing moves into the mainstream; however, investors need to beware of so-called “greenwashing” or “values washing”. I’ll give you a recent example. I was excited about a new SRI mutual fund, however, when I looked deeper into the funds’ approach, I realized that it tolerates huge levels of revenue from industries it claims to screen out. How’s that possible? Well, the fund’s description indicates that it screens out tobacco, for example, but after looking a bit deeper, I discovered that its tolerance levels permit up to 50%, or $1 billion, in revenue from screened industries. Minor tolerances can be necessary in this complex and interconnected world; yet, 50% is much too high for me to consider such a fund a values-fit. How would you feel about this?  

Holding businesses accountable

Corporate engagement is another area that can distinguish SRI from other types of investments. This means that a fund company pursues dialogue with an invested company on issues, such as gender diversity on their board or environmental concerns. If escalated pressure is needed, the fund company can file a shareholder resolution on an issue of concern at an annual general meeting.  This usually gets the company’s attention and is a very effective strategy for holding businesses accountable to their shareholders.

There are a lot of great examples where shareholders used their rights to initiate positive change. Take a look at this profile on NEI’s efforts to increase corporate board diversity, for example. Shareholder action empowers you to be part of the solution.

There are so many quality SRI funds available now. Take a look at the IA Clarington Inhance SRI Funds and NEI RS family of funds. Faith-based investments are another exciting and expanding investment option that can help you connect your values and faith with your finances.

I’ve been discussing market-based investments here; however, I should point out that all of Kindred’s GICs are socially responsible. We apply a clearly defined screening protocol to ensure that our loans are not linked to tobacco production, weapons manufacturing, and more. And, since our loans are funded by members’ GIC deposits, with the screens in place, all of our GICs become SRI validated.

So, that’s a lot of SRI talk! Do you have questions or comments? We’d be happy to continue the conversation. If you’d like to figure out if SRI is right for you, look for a financial planner who will take the time to get to know you, learn about your goals and your values, and help you find SRI options that fit—because there’s peace of mind in that.

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Online brokerage services are offered through Qtrade Investor. Mutual funds and other securities are offered through Qtrade Advisor. Qtrade Investor and Qtrade Advisor are divisions of Credential Qtrade Securities Inc. VirtualWealth is a trade name of Credential Qtrade Securities Inc.  Mutual funds are offered through Qtrade Asset Management Inc.

Brian Barsness

Brian Barsness, CIM, RIS, CKA

Director, Investment Services / Kindred Credit Union Brian is a recognized investment and wealth management leader with over 25 years of industry experience, including a specialization in socially responsible investing.

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