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February 5, 2010    

Ethical investments outperform standard market

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by David Masters
Ethical investments outperform standard market

Socially responsible investments marginally outperformed the standard market over the past decade, new research has revealed.

Jantzi, a Toronto-based environmental and social responsibility research firm, said its Jantzi Social Index (JSI), made up of green and ethical companies, produced an average annual return of 5.68% between 2000 and 2009.

This is compared to an average 5.61% annualised gain for the S&P/TSX (Standard & Poor’s/Toronto Stock Exchange) Composite.

Eugene Ellmen, executive director of the Social Investment Organization of Toronto, said that in addition to offering better returns, socially responsible investments are less risky.

“Our view is that companies that are managed in a socially responsible way are able to both capitalize on the opportunities happening in the market, on sustainability issues, on changing consumer preferences,” he said.

“They are also able to identify ongoing risks going forward so they are less likely to get involved in product liability lawsuits, for example.”

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Tags: Canada, , Jantzi, JSI, , S&P/TSX, socially responsible investment