Shari Caldwell’s investments reflect her core values, including ethical treatment of animals and safe working conditions.THOMAS BOLLMANN
About 30 years ago, Shari Caldwell was running a successful theatrical agency in Toronto when a friend lent her a book about ethical investing. Its ideas resonated with her. At the time, Caldwell didn’t have a lot of cash to spare, but she wanted to invest what she had in businesses that aligned with her environmental and social justice values.
She knew she didn’t want her money going to companies that sold harmful products or hurt the environment. At the same time, she wanted to support companies that behaved like good corporate citizens. She also recalls how investment advisors didn’t want to hear about it.
“I went to one of our major banks and said I wanted to invest ethically,” she says. “They said I was absolutely crazy.”
A few years later, another friend introduced her to Sucheta Rajagopal, a certified financial planner and portfolio manager with Mackie Research Capital Corp. Rajagopal had built a reputation for delving deeply into companies’ environmental, human rights and labour practices. Caldwell saw a good fit.
When Rajagopal was starting out in socially responsible investing, she says that very few funds were available. Few companies reported their environmental and social initiatives so it was difficult to build a socially responsible portfolio for clients. The availability of products has exploded over the past 20 years.
There is also now much more research at advisors’ fingertips. Bloomberg terminals offer ESG (environmental, social, governance) data on public companies. Rajagopal uses this information to help screen out investing products that don’t mesh with a client’s values, and to incorporate those that do. She also scrutinizes the data to help shareholders who want to encourage corporate behaviours, like pushing companies to increase supply chain transparency.
“We vote with our dollars,” says Caldwell, now retired. She has been one of Rajagopal’s high-net-worth clients for more than 15 years. “If you have money, it’s only wise to invest. If you invest, the best thing is to be able to put that money to good use – and I don’t want to give my money to someone who makes guns or polluting substances, for example.”
Rajagopal sees a “virtuous circle” happening, with the increase in ESG data and responsible product options driving clients’ desire for socially responsible portfolios – which, in turn, leads to even wider data accessibility and products.
Caldwell says that her investment advisor’s personal lifestyle further strengthens her professional credibility. Rajagopal doesn’t own a car, preferring to cycle and take public transit, and powers her home with green energy. “She walks the walk. I do my best, but Sucheta is really living it, and without any fanfare,” explains Caldwell.
Rajagopal is no longer the lone voice in the socially responsible area. Mackie now has a group of responsible investment portfolio managers. They cover the spectrum, from looking at ESG factors in order to determine basic risk to helping faith-based investors find investment options that align with their beliefs.
“There’s a good fit for everybody. It’s not one-size-fits-all. You can dip your toe into it to get started,” Rajagopal says. Still, a major misconception about responsible investing lingers: It doesn’t make money. “People still say, ‘I really want to do this, and I’m prepared to give up a little bit of return.’ But you don’t have to give up any return!”
A growing body of academic research is debunking the idea that investing with a social mandate necessitates financial sacrifice. In fact, over the past 18 years, the Jantzi Social Index – a real-time socially responsible-screened stock index modelled on the S&P/TSX Composite index – slightly outperformed its traditional benchmark.
Caldwell feels good about her own portfolio, ethically and financially. “Thirty years ago, people thought that socially responsible investing wouldn’t make money. Well, rubbish.” I’m doing just fine.”
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