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December 20, 2000
Canada Values Social Investment
A new study reveals that socially responsible investment in Canada has reached nearly $50 billion.
SocialFunds.com --
A comprehensive survey of social investment in Canada is the basis for a report entitled "Canadian
Social Investment Review 2000." The report, compiled by the Social Investment Organization (SIO),
concludes that the approximate aggregate total of social investing in Canada now is approaching $50
billion Canadian.
The study was sponsored by two of SIO's founding
members, Ethical Funds, Inc. and VanCity. SIO was established in 1989 as a national non-profit
organization dedicated to promoting socially responsible investment. It has approximately 400
members across Canada.
"The survey shows that social investment is larger than expected,"
said Eugene Ellmen, SIO's Executive Director. "We have known for some time that screened mutual
funds and labor funds are about $10 billion, but this study shows that the institutional assets are
quite sizeable."
The actual total for social investments is $49.9 billion. This figure is
estimated to represent 3.2 percent of the total retail mutual fund and institutional markets, which
was $1.6 trillion as of June 30, 2000. The $1.6 trillion includes $420.8 billion in total mutual
fund assets, and $1.1 trillion in assets managed by investment managers.
The $49.9 billion
can be broken down into several components:
- $27.2 billion in assets largely or wholly
managed in-house by institutional investors using social and environmental screens.
-
$11.3 billion in assets screened for social or environmental criteria by investment management
firms. This, of course, does not include screened mutual funds. It does include pooled funds,
segregated accounts and private stock portfolios. Most of these assets are managed on behalf of
institutional clients, and include pension funds, endowments, foundations, religious organizations
and public institutions such as hospitals and universities.
- $10.35 billion in total
retail investment funds, which comprises $5.77 billion in socially screened mutual fund assets and
$4.58 billion in labor-sponsored venture capital funds that are members of the Alliance of Labour
Funds.
- $1 billion in shareholder advocacy initiatives on social and environmental
issues.
- $85 million in investments by locally based community investment organizations.
The growth rate of the institutional social investment market cannot be estimated since
this report marks the first time that market has been surveyed. The growth in the retail socially
screened mutual fund market is measurable, however, and the numbers are astounding.
According to the Investment Funds Institute of Canada (IFIC), the mutual fund assets of IFIC
members grew 30 percent between June 1998 and June 2000, from $322.7 billion to $420.8 billion. In
the same period, the market for screened mutual funds and socially responsible labor funds grew
from $5.9 billion to $10.35 billion, a jump of almost 75 percent. This indicates that the retail
social investment fund market grew at more than twice the rate of the mutual fund industry as a
whole.
The phenomenal growth of socially responsible investment in Canada should make
individual and institutional investors alike take notice. As Robert Walker, Vice President of SRI
Policy and Research at Ethical Funds Inc. put it, "Financial advisors across the country should
take this market seriously. They can start by getting a copy of SIO's Canadian Social Investment
Review 2000."
www.socialinvestment.ca
www.ethicalfunds.com
www.vancity.com
©
SRI World Group, Inc. All Rights Reserved.
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