If the great Mahatma was around today, I wonder if he would be scouring the TSX or the Indian Stock Exchange to check on his portfolio of socially responsible investments (SRIs)? Well, ok, I admit that the idea of Gandhi, or Mother Teresa, dabbling in the rough and tumble stock market seems just a little farfetched – if not a tad unseemly. But, nevertheless, there is worldwide movement afoot dedicated to ethical investing — where principles are as important as profits.

While SRI funds are themselves a relatively new investment phenomena, the idea and moral force behind them certainly is not. As far back as the 1750s abolitionists, such as the Quakers, put pressure on companies and individual investors to try and halt the slave trade. In the 1950s and 60s other groups, such as trade unions and Vietnam War protestors, tried to advance their social and political agendas by influencing where people spent and invested their money.

Socially responsible investing is big business now, with some researchers forecasting the SRI market in the US alone to reach $3 trillion by 2011. And the Americans are not alone in their appetite for this type of investment. In Europe, the SRI market reportedly grew from an estimated €1 trillion in 2005 to €1.6 trillion in 2007.

And Canada is following suit. Almost 20% of investments in this country now fall under the SRI umbrella – totaling some $609 billion in 2008.  In a sign that SRIs are here to stay, loyal Canadian investors are sticking with this class of investments despite the recession and recent market woes. In fact, according to some financial experts, the value of SRI assets in Canada has actually grown by 21 per cent over the past two years.

How to get a Good Return?
The big question for investors, however is how to get a good ROI, or return on investment, while still doing the right thing with their money. The answer comes down to five simple considerations:

1. Recognize and acknowledge that your individual investing decisions have far-reaching consequences not only for yourself but for society as a whole;
2. Ask yourself what industries or sectors you want to support (alternative energy companies, organic food producers) — or not support (alcohol, tobacco, gambling, weapons manufacturers);
3. Educate yourself about the specific companies and investment funds that support your social objectives and ideals;
4. Find a supportive investment advisor – one who will not only help you select companies or funds that meet your SRI guidelines – but that also fit in with your overall investment strategies and financial plan;
5. As always, check on the track record of the investments you are considering – and make sure you will be getting value for the fees being charged.

Here are some resources you may want to check out: the SRI Monitor, Jantzi Research.

There’s certainly debate on the concept of SRIs and whether they are really a sound investment or just a marketing ploy.  SRIs may not be perfect, but they are an important reminder that all of our financial decisions have an impact on the world around us – one investment at a time.

Karin Mizgala is a Vancouver-based fee-only financial planner with an MBA and a degree in psychology. She’s the President of LifeDesign Financial and co-founder of the Women’s Financial Learning Centre.