More than half of British Columbians, including three quarters of millennials, are interested in socially responsible investing (SRI), which takes into account concerns for human rights and the environment, but fewer than one in five have ever invested in SRI, according to a new Vancity report.
The report found that 58% of British Columbians believe that companies with good social and environmental policies or practices represent better long-term investments. According to Vancity, 45% of British Columbians reported that the biggest barrier for them was not having enough money to invest in SRI. The next obstacles are a lack of knowledge about SRI (37%) and about how holdings in an SRI fund are chosen (37%).
“Addressing the barriers to SRI participation can help British Columbia emerge as a global leader in socially responsible investing,” said Christine Bergeron, Vancity’s vice-president of impact investing, wealth management and community real estate. “These investments generate comparable returns to the traditional market while also having a positive impact on our communities and our environment.”
Vancity recommends that British Columbians participate in SRI early in their careers and ask financial institutions and advisors about investing in SRI to help build their saving or retirement goals.
The report estimates that if this knowledge gap is addressed, B.C. stands to contribute as much as $15 billion to SRI, growing Canadian retail SRI assets by 13% over the next three to five years.
In the last several years, institutional investments, such as pension funds, have been largely responsible for the enormous growth in Canadian SRI assets, which increased by 49% between 2013 and 2015, now totaling $1.5 trillion. However, individual SRI investments like stocks, mutual funds and venture capital grew by 91% between 2013 and 2015, now totaling over $118.5 billion.