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Market News

 March 26, 2007
$500B in Canadian Responsible Investments

 Toronto, Canada (GLOBE-Net) - Growing institutional interest in Responsible Investment (RI) has propelled RI assets in Canada to more than $500 billion, says a new study released by the Social Investment Organization (SIO).

The Canadian Socially Responsible Investment Review (PDF) estimates total RI assets in Canada in 2006 at $503.6 billion. This is an increase from $65.5 billion in 2004.

Responsible Investment, also known as Socially Responsible Investment, is the term given to the evolving practice of incorporating non-financial indicators of environmental, social, and corporate governance performance into investment decision making.

The study is based on a survey of RI assets conducted every two years. It was sponsored by Acuity Funds Ltd., Alterna Savings, Desjardins Trust, Meritas Mutual Funds and The Ethical Funds Company.

The findings include $57.4 billion in assets invested according to "Core RI Strategies", which according to SIO incorporate values-based decisions about investment selection along with risk and return considerations.

It also includes $446.2 billion in assets invested according to what are termed "Broad RI Strategies", which SIO indicates are primarily based on a fiduciary analysis of the risk and return characteristics of environmental, social and governance issues.

According to SIO, the increase in RI assets is largely the result of the recent adoption of RI policies and practices by several large public pension funds.

"Issues such as climate change, human rights and international development are generating enormous public and financial industry concern," said Eugene Ellmen, Executive Director of the Social Investment Organization. "Investment managers are now recognizing this, and adopting socially responsible investment policies and strategies as a result."

Established in 1989, the SIO is the national trade association for the socially responsible investment industry. Its members include financial institutions, fund companies, asset management firms, investment consultants, financial advisors and investors.

As GLOBE-Net has reported extensively in the past, there is a growing awareness among investors, particularly large institutions, that environmental, social and governance performance have financial impacts.

Given growing global awareness of environmental issues, and the clear financial implications of climate change and related legislation, more investors and company executives are realizing the business risks and opportunities presented by environmental, social, and governance strategies.

According to a recent report from the National Roundtable on the Environment and the Economy (NRTEE), Capital Markets and Sustainability: Investing in a Sustainable Future, without the integration of sustainability factors into capital market allocations, Canada will face long term economic, environmental and social losses.

"Ignoring issues such as human rights or climate change within new international regulatory regimes is no longer an option...If we ignore the global trend to include "non-financial" risk factors in investment decision-making, we do so at our peril," it warns.



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