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  • Writer's pictureVolpe Financial Solutions


Socially Responsible Investing (or SRI) is growing in popularity as more investors realize that they can align their portfolios with their personal sustainability values. If you would like to learn about how to invest in a socially responsible manner in 2021 and going forward, Volpe Financial Solutions can help guide you.

What is Socially Responsible Investment (SRI)?

SRI is a type of investment that integrates the analysis of environmental, social and governance (ESG) factors with the financial analysis of companies to select the best performing companies in a portfolio from a sustainable development perspective. Integrating ESG factors into investment decisions can help reduce risks and identify opportunities that may not always be visible with traditional financial metrics alone.

Is It Complicated to Determine Which Companies Rank High in ESG Factors?

It’s easier than you think! Find out what socially responsible investment funds are all about and see how they can help you contribute to sustainable development without compromising on your saving goals.

Rigorous stock selection criteria: Not all funds billed as socially responsible are created equal. Fund managers use an integrated approach that seamlessly combines analysis of environmental performance, social responsibility and corporate governance (ESG) with fundamental financial analysis. To qualify for inclusion in SRI funds, a security, whether corporate or government-issued, must satisfy the stringent requirements of the following criteria:

1. Financial analysis ($) Several financial parameters are assessed in addition to analysis of business models, competitive advantages and quality of the management team.

2. ESG analysis ESG analysis helps to identify risks and opportunities that are not always visible with traditional financial parameters alone. It’s a good indicator for identifying strong and successful companies that can weather the storms. ESG analysis specialists evaluate companies’ practices based on the following factors:

socially responsible investing

The environmental, social, and governance factors to consider when investing

There are also some industries that are categorically excluded if their primary line of business is in one of these:

Socially responsible investing does not involve companies in these industries

Quick facts about SRI funds: results that speak for themselves

· Over the last ten years, socially responsible investment funds have performed well in the markets compared to their traditional counterparts. Generally: · SRI funds have outperformed the benchmark with less risk. · SRI equity funds have outperformed the broad benchmark (not simply SRI benchmarks) 63% of the time (1-, 3-, 5-, and 10-year periods). · SRI balanced and fixed-income funds have outperformed the benchmark 67% of the time (1-, 3-, 5-, 10-year periods).

sri performance

What about the Principles for Responsible Investment (PRI)?

The Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General. These principles have won the support of a global base of signatories representing the majority of professionally managed assets.

The six Principles for Responsible Investment (PRI):

1. We will incorporate ESG issues into investment analysis and decision-making processes. 2. We will be active owners and incorporate ESG issues into our ownership policies and practices. 3. We will seek appropriate disclosure on ESG issues by the entities in which we invest. 4. We will promote acceptance and implementation of the Principles within the investment industry. 5. We will work together to enhance our effectiveness in implementing the Principles. 6. We will each report on our activities and progress towards implementing the Principles.

We Can Help

If you would like to learn more about Socially Responsible Investing or are ready to start, Volpe Financial Solutions is here to help. You can reach us at 416 702 1017,, or through our contact page. We are Oakville, Ontario based financial advisors, and work one-on-one with all of our clients.

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