Does this thinking sound familiar? You invest your money in a mutual fund* and it’s out there working for you somewhere, but your investment seems to have evaporated into thin air. Your investment, it seems, doesn’t really have an affect on the world around you. But in reality, there’s a social impact to the choices we make when we invest our money.
Some investments may provide a great return but have a negative impact on communities and the environment. With a rising global concern for our eco system and the rights of workers who make the everyday goods we use it’s no surprise that triple bottom line investing (investing with people, the planet and profit in mind) is gaining popularity. Triple bottom line investing goes beyond the traditional measures of profits, return on investment, and shareholder value to include financial, environmental and social dimensions so it becomes possible to create wealth while having a positive impact. Neat right?
Here’s 3 tips to understanding triple-bottom-line investing and to start reflecting on whether your investments line up with your values:
- Start with a little. If you don’t have investments, you can always start with a little. The earlier you get involved with investing (directly or indirectly) in businesses or your local community, (even with small installments of money), the sooner you can learn about investing and ways to reach your own triple-bottom-line goals.
- Understand what’s in your portfolio. You may already own, directly or indirectly, a part of many corporations. For example, through the assets being invested on your behalf in an employer’s pension plan or contributions to the Canada Pension Plan, in a group RRSP, or your own mutual funds, stocks* or bonds* in an RRSP, TFSA, RESP or other account. Try to become more informed about the businesses you’re ultimately investing in by talking to your financial institutions and your advisors about what the top holdings are, and/or whether the investment managers are considering the triple-bottom-line when picking investments for you.
- Ask questions about socially responsible investing (SRI) options. Client demand is one of the biggest drivers for money managers to introduce new SRI products. In fact, SRI products now make up over one-third of all Canadian assets under management. As consumers, we should advocate for our priorities and ask our employers (for group benefit plans), or our financial institutions and advisors about the kinds of products available to reflect our interest in companies pursuing success using a triple bottom line measurement.
It’s never too late to educate yourself about how to make your money work for you AND your community and to feel better about investing with your conscience. And if you have children, grandchildren, nieces or nephews or even friends, why not also start a conversation about this with them?
*Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.