How to Get Started with SRI/ESG Investing


Socially Responsible Investing (SRI) has grown tenfold over the past 20 years. Find out how to take advantage of this growth while helping our people and our planet.

In this article, I’ll give concrete steps on how to switch your investments to ensure your money goes to Environment, Social, and Governance (ESG) compliant organisations.

What is ESG and SRI?

ESG looks at a company’s environmental, social, and governance practices, alongside more traditional financial measures, while SRI involves actively avoiding or choosing investments based on specific ethical guidelines. In simpler terms, ESG is the fundamentals and SRI is how we use ESG metrics plus our own ethical standards to avoid or divest from all harmful investments and reallocate our money to socially responsible companies.

Why SRI?

Socially Responsible Investing has been exponentially growing over the past 20 years. Companies that are ESG-compliant also tend to have better and healthier growth both as an organisation and as a stock investment due to the reduced monetary risk from not being involved with socially irresponsible factors such as oil, tobacco, and weapons.

In fact, a 2019 study by Royal Bank of Canada (RBC) found that SRI investments have consistently outperformed total stock market indices like the S&P/TSX 60 or S&P 500. This means that by investing in socially responsible companies, you are not only helping reduce the impacts of climate change, helping women’s empowerment, and promoting good corporate behaviour — you are also getting good return on investment (ROI) for your money.

SRI removes investments that are harmful to people and planet, and replaces it with those that are helpful | Animated by Wealthsimple

How do you get started with SRI?

If you are using a robo-advisor, mutual fund portfolios, and/or ETF investing, you may have options to switch your portfolios to SRI/ESG:

  1. Find out if your app, bank, or trading platform has SRI/ESG options. Do a quick Google search with the terms “SRI” or “ESG”. For example, if you are using Betterment, search for “Betterment ESG” or “Betterment SRI”.
    Here are quick links to some SRI-friendly apps in Canada: Wealthsimple Invest, Questrade Portfolios, Tangerine Investment Funds.
  2. Change your portfolio setting to invest in SRI/ESG options. This will be an easy button located in your profile, account, or portfolio settings. If you can’t find it, contact your customer support.
    (If your customer support says that SRI options are not available, it may be time to switch — since you are potentially losing out on additional profits and may be investing in weapons used in war and crime.)
    After you have switched, it may take around 2–5 business days for the investments to rebalance and move to SRI or ESG.
  3. Keep investing in the same SRI/ESG portfolio. Remember to keep investing on a recurring basis — compound investments make the best returns over time.

There are many ways you can start. What’s important is taking that first step right now!

Your money will thank you for the great ROI! (and also the planet) | Photo by George Hodan

If you are in Canada, the US, or the UK, and don’t have investments yet, the easiest app I recommend starting with is Wealthsimple Invest. Sign up using my link and get your first $10,000/£5,000 managed for free!