The Ethical Funds Co. and Guardian Capital LP announced Tuesday that they are combining their expertise in a new investment firm: Guardian Ethical Management Inc. (GEM).

GEM will be the first investment management firm in Canada to specialize in providing institutional investors with an socially responsible investing (SRI) services.

“Through our existing association with The Ethical Funds Co., we have learned that we share the same values, one of which is that companies that responsibly manage their businesses are, over time, superior investments. This partnership formalizes that process and provides institutional investors with a truly integrated solution from the teams at Guardian Capital and The Ethical Funds Co.,” said J.J. Woolverton, managing director and COO, Guardian Capital, in a release.

“There are investment companies in this market that use some form of SRI criteria, but they rely on outside surveys and lists to identify companies in which to invest. GEM will have the expertise for both disciplines on board.”

“We see a real opportunity for growth in the institutional side of the SRI business in Canada and together with our partners at Guardian Capital we want to proactively pursue it,” said Ethical Funds President and CEO, Don Rolfe. “GEM will allow us to offer sustainable investing to a new group of investors. This market is already well developed in both Europe and the United States.”

Both Rolfe and Woolverton will sit on the board of GEM, as chairman and vice-chairman respectively.

John Clancy has been named as the company’s managing director, and is based in Toronto. He brings over 20 years of experience in the investment business to GEM.

“GEM will be primarily directed to the institutional market, with a particular focus on those organizations that have a natural affinity with SRI — foundations, endowments, religious organizations, charities, and pension plans,” said Clancy.

GEM initially will offer five mandates: Balanced Funds, Canadian Equity, Global Equity, Fixed Income, and Diversified Income on both a segregated and pooled fund basis.

As well, GEM has been appointed to provide investment management services to the Ethical Income Fund, Ethical Monthly Income Fund, Ethical Balanced Fund and Ethical Growth Fund.

In turn, GEM has appointed Guardian Capital LP to act as the portfolio manager for the Ethical Income Fund, replacing Co-operators Investment Counselling td.

Guardian has also been appointed to act as the portfolio manager for the Ethical Balanced Fund, replacing Greystone Managed Investments Inc.

GEM has continued to entrust Guardian with portfolio management responsibility for the Ethical Monthly Income Fund and Ethical Growth Fund.

The portfolio management transitions for the Ethical Income Fund and Ethical Balanced Fund are expected to occur on October 27.