Socially responsible investments will be strongly positioned as the market emerges from the current recession, a panel of financial services industry experts said on Thursday.

Speaking to members of the Toronto CFA Society on the growth and viability of SRI, the panellists acknowledged that SRI has struggled in recent months along with much of the investment industry. However, they are bullish on the performance of these assets in the long run.

“SRI is going to be extremely well positioned as we come out of this,” said Michael Jantzi, president and founder of Toronto-based Jantzi Research Inc.

Jantzi Research’s Jantzi social index — a benchmark index of 60 Canadian companies with stronger environmental, social and governance standards than their industry counterparts — has underperformed the S&P/TSX composite index in recent months, largely since it is underweight in gold and materials companies, Jantzi said.

But some money managers invested in the socially responsible realm have outperformed the S&P/TSX composite index through the turmoil of recent months, he noted.

Ultimately, short-term volatility is irrelevant — investments in the field should be made with a long-term focus, Jantzi said: “It’s a long-term play.”

Jordan Berger, head of Mercer LLC’s responsible investment practice in Canada, agrees. He pointed to a longer-term five-year trend in which a variety of SRI funds outperformed the main market benchmark indices significantly.

With many investors focused on solid long-term investments to rebuild their portfolios as they emerge from the current downturn, the panellists expect SRI to become increasingly popular — particularly on the retail side.

Jantzi pointed to research showing that 78% of Canadians are interested in learning more about the environmental and social aspects of the companies they’re investing in. Many retail investors, he added, consider many aspects of the investments they make, not solely returns.

“It’s not the only element that they’re looking at,” Jantzi said. “We believe that on the retail side, there is tremendous opportunity.”

Many institutional investors also support responsible investing. The Canada Pension Plan Investment Board, for instance, gives consideration to environmental, social and governance factors in the investments it makes, said Brigid Barnett, manager of responsible investing at the CPPIB.

“It’s our belief that the effective management of these factors leads to long-term shareholder value,” Barnett said.

SRI is also gaining popularity as responsible corporate behaviour has become an increasingly mainstream issue, Jantzi explained. He noted that a growing number of stakeholders are beginning to demand greater disclosure and transparency of social and environmental risks that companies face.

“We have long advocated for greater transparency, better reporting, better disclosure, because with that comes accountability on the part of corporate Canada,” Jantzi said.

A push for such disclosure to be regulated is further raising the profile of social responsibility issues, Berger said. For example, the recent Ontario Securities Commission decision requiring companies to examine their environmental liabilities was a significant move that will lead to more attention on environmental factors among investors, he added.