Responsible investing called lucrative and safe
By Peter Merrick
Over the last decade, I have worked with hundreds of corporations, non-government organizations, families, and individuals to help them to invest their money so they can create a better future.
I have learned through experience that in reality, money is something we have chosen to trade our life energy for.
In the last 50 years, money has dematerialized from paper into electrical pulses of 0s and 1s, with trillions of dollars swirling around the world every minute.
The truth is, when we invest our money, we are really casting a vote on the type of future we want to create. When North Americans poured billions into Asian markets in the early 1990s, world attention focused on the potential of the Asian tiger.
In the late 1990s tech was the focus. Perhaps the reasons for the collapse of both those investing fads were that they were based on greed and fear, not long-term sustainable financial planning.
We are living through an exciting, challenging and most critical time in human history. Never before has so much been possible, and never before has so much been at stake. Around us are environmental, social and economic crises, along with extreme geopolitical tensions. It is evident that the roots of these crises lie with us-our materialism, our yearning for power, our love of money-and our fear of each other.
I am an optimist-if I wasn’t, my wife and I would not have brought four wonderful children into this world. I believe we can do good for society with our investments and do well financially at the same time. Most of us would prefer to invest in companies that share the same values we do if only we could outpace the S&P 500 or TSX at the same time. Now that goal has become more than an ephemeral New Year’s resolution.
Yet the fact is, investing that reflects investors’ values is both possible and profitable. Socially responsible investing, once largely dismissed as a novelty for the politically correct, is now considered a smart and lucrative way to make money in the long run.
If you feel this way, you are not alone. Toronto-born Paul Ray, a sociologist, and his wife Sherry Anderson, a psychologist, now living in California, drew upon 13 years of survey research studies on 100,000 adults to find that as at the year 2000, there were 50 million people in the United States and 90 million in the European Union who would identify themselves as culturally creative. According to Ray and Anderson, what makes someone so is being an “individual who cares deeply about ecology and saving the planet, about relationships, peace, social justice, and self-actualization, spirituality, and self-expression.” Such individuals have a burning desire to have their values reflected in their careers, investments, and community.
The ranks of cultural creatives have been growing by leaps and bounds over the last 50 years. They want their money managers and financial advisors investment processes to be by any standards rigorous and demanding. But they want one more element put into the mix. They want to invest in responsible companies.
Socially responsible investing is about striking an appropriate balance: finding that golden meaning between a life that neither bows down to money nor neglects financial responsibilities; getting a good return for yourself without forgetting about others.
On May 2, 2005, my good friend and mentor Bob Hunter, one of the founders of Greenpeace died of cancer at the age of 63. You might remember Bob as the quirky guy who used to read the newspaper in his bathrobe on Toronto’s City TV Breakfast Television. Bob’s indomitable spirit fired the direct action mode of the environment protection movement and created Greenpeace. In March of 1976, Bob and Paul Watson, co-founder of Greenpeace, stood on an ice floe off the coast of Labrador as a large sealing ship approached them. The ice cracked and split beneath their feet as Watson said to Bob, “when it splits, I’ll jump to the left and you to the right.” Bob looked straight ahead and calmly said, “I’m not going anywhere.”
Because he stayed, Watson stayed and the two of them brought that seal killing ship to a dead stop.
Bob Hunter’s life showed that each of us can make a difference. One way we can do this is by acting on the belief that there is absolutely no conflict between doing what is right by investing in companies that respect the environment, treat their employees well, and conduct their business ethically while earning a good solid return. Plus, this type of investing just feels better.
Peter Merrick
Peter Merrick, FMA, CFP, FCSI, Instructor at George Brown and Seneca Colleges, President of Merrick Wealth Management, a boutique financial planning, employee and executive benefit consulting firm.
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