Invest for principle and profit — the socially responsible way

A common approach to SRI selection is to pick companies based on performance in key areas.

There was a time when investing in a socially responsible way meant having to sacrifice performance for values. That’s not the case today.

For investors who care about sustainability, socially responsible investing (SRI) is a way to drive efficiencies and best practices into the bottom line, so companies become less wasteful, more profitable and more sustainable. That can translate into better returns and more responsible investing.

The makings of a socially responsible investment

Many publicly traded companies account for their social and environmental impact through annual corporate social responsibility reports or third-party audits.

A common approach to SRI selection is to pick companies based on performance in areas such as:

• Corporate governance, codes of conduct and executive pay.
• Level of community involvement and charitable contributions.
• Eco-efficiency and environmental reporting on carbon emissions.
• Labour relations and track record with employees and contractors.
• Respect for human rights, minority groups and workforce diversity.
• Product safety, quality and eco-innovation.

Some SRI investors divest from companies that derive significant revenues through “sin” industries, such as alcohol, gaming or tobacco, or the supply of military weapons.

Create a “clean” portfolio

Widely available environmental, social and governance (ESG) research and reporting can help investors make informed investment decisions about individual companies. Another way to gain broader exposure is through an actively managed mutual fund that screens using SRI criteria. These portfolios tend to be weighted toward more progressive companies.

“Companies that embrace proactive sustainability policies have a ‘first-mover advantage’ when innovating in their processes, products and services,” says Charles Edwardes-Ker, Portfolio Manager, TD Global Sustainability Fund. The fund invests mainly in global companies viewed as best-in-class in environmental, social and/or economic sustainability factors, and those companies included in the Dow Jones® Sustainability World Index (DJSI World).

Focus on performance

Companies that lead the way in sustainability could have the potential to outperform over the long term, suggests Edwardes-Ker. “They are effectively mitigating risk by addressing any hazards that might exist beyond their balance sheets,” he says.

For more information or research on the performance of socially responsible investments, call 1-800-465-5463 to speak with an Investment Representative or 1-800-461-3863 to speak with a FundSmart* Mutual Fund Specialist.

How TD Bank Financial Group reduced its carbon footprint TD Bank Financial Group (TDBFG) recently became the first carbon-neutral bank in Canada. This is an especially significant milestone this year, as TDBFG celebrates the 20th anniversary of the TD Friends of the Environment Foundation* (TD FEF). Here’s how TDBFG did it: Better energy efficiency. Many projects were completed — retrofitting lighting in buildings, upgrading data centres, optimizing heating/cooling systems and introducing a new fleet of fuel-efficient vehicles. More renewable energy. Electricity for an entire network of 2,600 Green Machine* Automated Bank Machines, as well as for operations in B.C., Alberta, Saskatchewan, Nova Scotia and P.E.I., comes from renewable energy. Used carbon offsets to neutralize other emissions. This included contributing to the Greening Canada Fund and helping Habitat for Humanity Canada build energy-efficient homes. Reducing your own footprint is possible — here are some ways: Try TD FEF’s online One-Minute Carbon Calculator (www.tdfef.com). Take advantage of ecoENERGY™ Retrofit grants for your home. Consider sustainable investing and mortgage products, such as the TD Global Sustainability Fund¹ and the TD Canada Trust Green Mortgage.

 

* Trade-mark of The Toronto-Dominion Bank, used under license.

All trade-marks are the property of their respective owners.

Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before investing. Mutual funds are not guaranteed or insured, their values change frequently, and past performance may not be repeated.

¹ TD Global Sustainability Fund is managed by TD Asset Management Inc., a wholly owned subsidiary of The Toronto-Dominion Bank.

Dow Jones Sustainability Indexes^SM and the referenced trademarks have been licensed for use for certain purposes by TD Asset Management Inc. TD Asset Management Inc.’s TD Global Sustainability Fund based on the Dow Jones Sustainability Index^SM is not sponsored, endorsed, sold or promoted by SAM Indexes GmbH, Dow Jones & Company, Inc., or any of their respective affiliates. Neither SAM Indexes GmbH, Dow Jones & Company, Inc. nor any of their respective affiliates makes any representation regarding the advisability of investing in such product(s).

In this issue		April 2010
	Global economy gaining traction, but risks remain		What’s in store for the Canadian housing market?
	What does the future hold for gold?		TD Waterhouse presents MoneyTalk and book review
	How to research market sectors in WebBroker		Our enhanced retirement site is designed for you
	Invest for principle and profit — the socially responsible way