Socially Responsible Investment Indexes

Nowadays, individual investors do not need to research companies themselves in order to make socially responsible investments. There are a number of official indexes, which are used to monitor the performance of particular groups of SRIs and to compare this with the performance of other types of investments.

Among the most commonly used socially responsible investment indexes are:

  • Jantzi Social Index (Canada)

  • The Domini 400 Social Index

  • The Calvert Social Index

  • The FTSE4Good Index Series

  • The Citizens Index (US)

  • NPI Social Index (UK)

  • Dow Jones Sustainability Group Index

    The criteria which are used to select companies and funds for inclusion in these indexes tend to be quite similar, and relate to such factors as:

  • Human rights

  • Animal testing

  • Environmental protection

  • Community involvement or investment

  • Involvement in arms production

  • Tobacco and alcohol production

  • Involvement in the gambling industry

  • Nuclear power

  • Employment policies

  • Impacts on developing countries

  • In their screening processes, the companies operating these indexes focus on the ways that companies develop and sell their products and services. Little weight is given to other activities such as donating to charities, which might only serve to divert attention from any socially detrimental practices the companies might be undertaking.

    Many of the largest and most successful blue-chip companies in the world actually account for a high proportion of stocks in the socially responsible investment market. These include, for example, Intel, Microsoft, Compaq and Johnson & Johnson.

    Some Canadian companies included on the Jantzi index include the Royal Bank of Canada, BCE, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, CIBC, Sun Life Financial Services of Canada, Alcan Aluminum, Canadian National Railway and Suncor Energy.

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