Invest Like You Give a Damn Author Shares Tips for Aligning your Investments with Your Values

by: Sara on 02/13/2018

In his new book Invest Like You Give a Damn: Make Money, Change the World, Sleep Well at Night,Marc de Sousa-Shields takes the guess work out of Socially Responsible Investing. Between Marc's humor and expertise he takes what many of us find daunting, investing for retirement, and shows how making money and aligning your investments with your values is easier than you think.

Below Marc has answered some key questions about why people hesitate when it comes to social investing. The last question submitted by a reader through our book giveaway contest.(See details about upcoming contests at the end of the interview.)

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Author Marc de Sousa-Shields

Many think they must make a choice between investing in companies that will "make them rich" and those that will "do good." Is this true? 

This not true, almost all SRI funds are competitive with their benchmark peer funds. In so far as anyone gets rich with securities, the chances are about equal if you choose a well-managed SRI fund. Good companies tend to mind their social and environmental Ps and Qs. 

What is the most common reason people don't invest their money (or more of it)?

People fear things they don’t know. Most don’t know investments, fewer still know SRI investment. Reaction to negative stock market news sticks in a person's memory more than positive moves. Many would know that there were massive downward spikes in major markets in 1988, 1999, 2008, but few can tell you about the longest upward swings, on a single day or annual basis.  So people keep their money in savings, invest in real estate, or buy things they don’t need that devalue quickly.

What is the most common reason people don’t align investments with their environmental and social values?

Time is the most significant factor (if you hold fear and ignorance about investment constant). Few people want to do the work, and there are few advisors in the market with a good understanding of SRI. Becoming conversant with SRI for most, means an investment in time most are just not able and or willing to make.

A reader submitted the following questions (answer based on the age of someone in their 40's):

 I have a balanced investment portfolio of 60% equities and 40% fixed income, mostly bonds. Socially Responsible Investment (SRI) equity funds/ETFs (Exchange Traded Fund) are pretty easy to find but what about SRI bonds?

How might one evaluate how ethical and sustainable government bonds are?

First, you may want to consider a slightly more aggressive approach to equities. I don’t know what kind of equities/equity funds you hold, but a fairly conventional allocation would be more like 70% equities, with 10% of them being ‘higher risk’ (say, large capital emerging market equities, or small to midcap US/ Canadian).

You are right that SRI equity funds/ETFs are pretty easy to find. But then again, so are SRI bond funds or individual company bonds/preferred shares. NEI, Meritas, and RBC have one or more bond and or income funds. If you want to pick a couple companies that pay good dividends you can pursue the offer of these funds or check out Morningstar. Canadians can buy US-based SRI funds and equities for their RRSPs as well.  

If you are credit union type which I am, you can often buy securities through their in-house representatives. VanCity has a good offer, as does Coast Capital Savings Credit Union (although their funds are not per se SRI). 

Are there SRI or 'green' corporate bond funds for that part of a portfolio?

 The TD Bank, the Export and Development Corporation of Canada, among others, have issued green bonds. Like any other offer, you need to look at the prospectus for details, and or do your investment research, checking investment objectives and target investments. The government of Ontario raised $800 million in a green bond issue last February. It is funding a variety of projects, including improved commuter train service in Toronto. More are on the way. Some investors would shy away from green bonds that either do not fund what they might consider “green” projects, and/ or support governments they object to. There were some boycotts by unions, for example, of Ontario bonds (not green bonds) back in the 1990s because of conservative government actions they disagreed with.

What about other SRI / ethical / green fixed income options such as 'green' REITs (Real Estate and Investment Trust) or preferred share funds?

 There are 'green' REITs in the US market, I couldn’t find any for Canada but that doesn’t mean there aren’t any. Incidentally Green State REITs in the US, or those with legal weed sales, have done much better than their blue or red counterparts. Cannabis-specific real estate in particular has been crushing benchmarks. Water concerns should be addressed in this case.

Corporate preferred shares are screened as you would for any company, applying the same SRI criteria. Some credit unions have used prefs to raise money, often with fine returns. I like them for their SRI two for one (community and institutional support)

Be sure to check out our Facebook page for the chance to ask our expert authors your questions. If your question is included in the author interview you win a copy of their book!

Next author interview is with Linda Gilkeson, author of Backyard Bounty-Revised & Expanded 2nd Edition: The Complete Guide to Year-round Gardening in the Pacific Northwest.

Contest begins February 22nd.

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