As your clients align their consumer purchases with their personal values — with items as such as fair-trade coffee and hybrid cars — many regard socially responsible investing as a chance to meet their financial goals without violating their ideals.

“[Investors] can contribute to sustainability,” says Eugene Ellmen, executive director of the Social Investment Organization in Toronto. “They can contribute to solutions to climate change instead of just contributing to companies that continue to put carbon into the atmosphere.”

The SIO website (www.socialinvestment.ca) defines SRI as “the inclusion of social, environmental and governance consideration into the management and selection of investments.” It can take the form of shareholder activism, local investment and the selection of stocks and other investment vehicles based on companies’ performance in areas such as the environment and human rights.

The following tips can help you decide whether you should try to appeal to socially conscious clients by incorporating SRI into your practice:

> Do your research
Educate yourself on SRI as well as environmental and social issues in general through professional organizations and publications.

Richard Nickerson, an advisor with Assante Capital Management Ltd. in Halifax, suggests reading publications such as Corporate Knights magazine and the Corporate Social Responsibility Newswire (www.csrwire.com) to get started.

Other sources of information include the SIO, which provides members with information on developments, trends and new products in the industry, says Ellmen. Advisors can register as members online. The annual membership fee is $350.

Also, check out the United Nations Principals for Responsible Investment (www.unpri.org), says Sucheta Rajagopal, an investment advisor and associate portfolio manager with Toronto-based Hampton Securities Ltd. The UNPRI is a project set up by the United Nations, in which asset managers join by becoming signatories of the project and its principals. In doing so, they agree with the importance of integrating environmental and social governance principals into investment analysis.

UNPRI also provides information and a network for advisors who want to consider social, environmental and governance issues when selecting investments, according to the UNPRI website. Depending on your assets under management or service provider, annual fees for UNPRI signatories range from $500 to $9,400.

> Make sure you’re sincere about social responsibility
If you are to incorporate an SRI program into your business, it must be more than just a marketing strategy to be successful.

“You should have a genuine interest in a particular area, such as social or environmental issues,” Nickerson says. “Clients can tell if you’re just doing it for the sake of having a niche market.”

> Develop a strategy
Ask yourself how you are going to start incorporating SRI into your business and how, if at all, it fits with your current practice, says Rajagopal.

For example, do you already work with socially aware groups such as not-for-profits? Or, are you simply going to offer your clients another layer of due diligence when screening investments for them?

Talk to a core group of your current clients to find out whether they are interested in SRI, and which aspects particularly interest them.

As well, if you want to work with a specific market, she says, consider how you will develop that niche and serve those clients best.

Tomorrow: Incorporating SRI into your practice

IE