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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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