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Active Ownership – 

Is when investors utilize their ownership to vote on and engage corporate managers and boards of directors to address concerns of environmental, social and corporate governance (ESG) issues.  Active ownership is utilized to address business strategy and decisions made by the corporation in an effort to reduce risk and enhance sustainable long-term shareholder value.

B Corp – 

A corporation that is certified by the non-profit, B-Lab to have met standards of social and environmental performance, accountability and transparency. Certification has been granted to over 33 countries and 60 industries globally.

Bangladesh Accord – 

The Accord is an independent agreement intended to increase workplace safety in all garment factories in Bangladesh. Included in the Accord are increased safety inspections at factories and regular public reporting of the results. This is a legally binding agreement which has been signed by over 150 apparel corporations from 20 countries. Acting as the independent chair, the International Labour Organization (ILO) acknowledges the importance of this agreement.

Benchmark (or Benchmarking) – 

This is the process of comparing investments to a specified and relevant industry standard. In financial analysis, investments are typically benchmarked against relevant indices utilizing similar performance and process metrics.

Benefit Corporation – 

A benefit corporation is a new class of corporation that voluntarily meets higher standards of corporate purpose, accountability, and transparency.

Best In Class – 

Also known as positive screening, it is a sustainable investing strategy that refers to investment in sectors, companies or projects that are frontrunners in meeting environmental, social and governance (ESG) criteria in their asset class or category. Sustainalytics was a driver and early adopter of this strategy and coined the term, ‘Best-of-sector™.

Biodiversity – 

Refers to the variation of life found on Earth.  This encompasses variations in ecosystems, animal and plant life. Biodiversity is the foundation of life, and must be maintained to preserve human life.  This is directly affected by climate change.

Biofuel – 

Refers to any fuel that is not derived by fossilized carbon such as coal or petroleum. This fuel is a derivative of organic material and includes ethanol and bio-diesel.

Biomass – 

This refers to the non-fossilized material resulting from renewable sources that will be used to produce biofuel and further, to produce clean energy. Examples of biomass include green waste, agricultural crop and farm waste, animal waste and forest and mill residues. The list continues to grow.

Biotechnology – 

The act of altering and manipulating the genetic make-up of living organisms.  The desired outcomes can range from creating green chemicals, to medicines, or conversely to improve crop yields and pest resistant agriculture.

Carbon Disclosure Project (CDP) – 

CDP is an independent non-profit organization that holds the largest database of corporate climate change data in the world. Launched in the year 2000, 5,000 organizations from over 60 countries are now disclosing their greenhouse gas emissions and climate change strategies through the CDP.

Carbon Emissions – 

Carbon dioxide (CO2) emissions are the common type of gas emitted from the burning of fossil fuels. The higher the carbon content in the fossil fuel or the more inefficient the burning process is, generally the more CO2 that is produced.

Carbon Neutral – 

This occurs when an organization’s (or individual’s) net carbon emissions equal zero. The process requires measuring total CO2 emissions, taking active steps to reduce emissions where the company or individual can, and then investing in green initiatives (solar, wind, etc.).  The purpose of investing will count towards offsetting the emissions that the company cannot reduce through their active steps.

Carbon Trading – 

There is a steadily growing market designed to reduce GHG emissions.  The market operates on the basis of supply and demand. Carbon emitting companies are allotted a certain level of emissions. If an organization exceeds its allotted CO2 emissions, it will be charged per tonne of emissions over that level. Companies are able to purchase unused allowances from lower emitting companies. The market will see the aggregate allotment of emissions reduced over time, thus increasing the prices through supply and demand and therefore reducing GHG emissions. (also known as: cap-and-trade, or emissions trading).

Catastrophic Risk – 

A single or series of events over a short period of time that leads to significant losses. These risks are low probability but severe in terms of potential costs. Natural disasters such as earthquakes, floods, wind, and fire are examples. Manmade disasters include incidents in aviation, terrorism, and aerospace. Optimal risk management, risk transfer and risk mitigation are required for investment. Insurers also protect investments against these losses.

Clean Energy – 

Energy from sources that do not pollute such as solar, wind, geothermal.

Clean Tech – 

Technologies that support increased productivity or profitability while reducing resource consumption and pollution.

Climate Risk – 

A risk resulting from climate change that affects natural and human systems and regions.
In the course of increasing global temperature and extreme weather phenomena the Intergovernmental Panel on Climate Change (IPCC) has been founded by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) for a better understanding of climate change and meeting concerns of these observations.

Closed-Loop Supply Chain – 

This refers to a system where a producing company creates zero-waste through a supply chain that recycles, reuses and composts all materials. More commonly known as a ‘take-back program,’ the organization that produces a good is also responsible for its disposal. When taking-back the products, companies are investing in technologies that take useful materials from old products and recycle them into new products.

Co-Filers – 

Co-filers are shareholders who join other shareholders to file a shareholder resolution with a company.

Community Contribution Companies (CCC) – 

Responding to social and investor demand for SRI options, the Canadian Province of British Columbia launched the new CCC corporate model (also known as C3). The goal was to find a middle ground between for-profit business and not-for profit enterprises. Passed in 2012, this is the first legislation of its kind in Canada to allow entrepreneurs in the province to consider social and environmental goals while still generating profits for the business.  This in-turn provides responsible investment opportunities for socially and environmentally conscious investors.

Community Investment – 

Directing investment capital to communities that are underserved by traditional financial services institutions. Generally provides access to credit, equity, capital, housing, and basic banking products that these communities would otherwise lack.

Community Loan Funds – 

A non-profit organization providing loans to underserved communities at below market rates for affordable housing, small businesses, and community facilities.

Corporate Accountability – 

The act of being accountable to the stakeholders of a company, which may include shareholders, employees, customers, suppliers, the communities where they operate and so on. It includes showing leadership and accepting responsibility for actions and decisions made by the company. In terms of responsible investment, accountability includes an obligation to report on the policies and practices, thus assigning responsibility for possible outcomes.

Corporate Engagement – 

Using shareholder power to influence corporate behaviour directly. This includes communicating with senior management and/or boards of companies, filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines

Canadian RI funds have been leaders in bringing forward proposals to press companies to consider the environmental, social and financial risks associated with issues like oil sands production or supply chain management.

Corporate Governance – 

The system of policies and practices by which a company is directed and controlled. Boards are tasked with balancing the interests of the many stakeholders in a company – including shareholders, employees, customers, suppliers, and the communities where they operate.

Corporate Social Responsibility – 

Also known as ‘CSR’, this refers to the commitment of an organization to ensure that the social, economic and environmental impacts of their actions create a net benefit to communities and society. This is founded on the belief that all corporations have a ‘duty of care’ to all stakeholders in every area of business operations.

Corporate Social Responsibility Report – 

A CSR Report is a voluntary disclosure of the environmental, social and governance policies and practices of a company. The Global Reporting Initiative (GRI) has established a standardized structure for CSR reporting. (Also known as sustainability reporting).

Corporate Sustainability Ratings/Rankings – 

Ratings concentrated on a corporation’s ability to create long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments

Dialogue – 

A form of corporate engagement often utilized in the integration of ESG. The dialogue(s) are ongoing discussions or exchanges between investors and the management and boards of corporations.

Disclosure Reporting – 

Refers to information provided by a company to its stakeholders regarding the policies and practices of the company. Disclosure reporting also includes the extent to which the company reports publicly on its environmental, social and governance (ESG) policies and performance. Increasing disclosure reporting will result in executive boards effectively being required to report on their understanding of potential social and environmental impacts on company operations. In the context of RI, this translates into enhanced accountability on ESG risks, which is an important step to investing for positive societal impact.

Divestment – 

When companies are sold from a portfolio because they no longer meet the ESG or financial criteria.

E-Waste – 

In RI, this refers to the highly toxic waste associated with discarded electronic devices. These products may contain mercury, lead and other known hazardous substances.  Conversely, this presents opportunities for recycling initiatives.

Engagement – 

Using shareholder power to influence corporate behaviour directly. This includes communicating with senior management and/or boards of companies, filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines.

Canadian RI funds have been leaders in bringing forward proposals to press companies to consider the environmental, social and financial risks associated with issues like oil sands production or supply chain management.

Environment, Social and Governance (ESG) – 

ESG stands for Environmental, Social and Governance. There is growing evidence that suggests that ESG factors, when integrated into investment analysis and decision-making, may offer investors potential long-term performance advantages. ESG has become shorthand for investment methodologies that embrace ESG or sustainability factors as a means of helping to identify companies with superior business models.

ESG – 

ESG stands for Environmental, Social and Governance. There is growing evidence that suggests that ESG factors, when integrated into investment analysis and decision-making, may offer investors potential long-term performance advantages. ESG has become shorthand for investment methodologies that embrace ESG or sustainability factors as a means of helping to identify companies with superior business models.

ESG Analysis – 

When an investment institution wishes to track how potential investments (companies) actively manage ESG risks, and ultimately their performance.

ESG Integration/ ESG Investing – 

Explicit consideration of environmental, social and governance factors in the investment decision-making process.

Ethical Investment – 

Investments guided by ethical codes, religious beliefs or values. Traditionally, this meant screening out the sin stocks or those involved military weapons, alcohol and tobacco.

Exchange-Traded Fund (ETF) – 

Similar to a mutual fund (MF) where the security includes a basket of assets, the ETF tracks an index, commodity or specific baskets of assets.  The difference is that an ETF trades like a stock on an exchange. The ETF will experience price fluctuations throughout the day similar to that of a stock.

Exclusion – 

See: Ethical Investment, Socially Responsible Investing (SRI), and Negative Screening.

Fiduciary Duty/Responsibility – 

In the institutional investment context, trustees of pension funds owe fiduciary duties to beneficiaries to exercise reasonable care, skill and caution in pursuing an overall investment strategy suitable to the purpose of the trust and to act prudently and for a proper purpose. The explicit legal nature of fiduciary duty varies depending on the country of origin.

While most institutional investment funds strive to create financial benefits for their beneficiaries, it is also possible for trust deeds explicitly to require trustees to consider ESG factors in investments. Where their discretion to consider ESG issues is not made explicit in the trust deed, institutional investors in the common law world have often argued that their fiduciary duties require them to focus solely on maximising profit for the beneficiaries, and prevent them from considering ESG factors in their decision-making.

That argument is becoming irrelevant as there is increasing evidence supporting the materiality of ESG issues.

Fossil Fuel Free (FFF) – 

An investment strategy based on the exclusion of fossil fuel companies from a portfolio. Advocates of this strategy state that there are 200 publicly-traded companies that hold the vast majority of the world’s proven coal, oil and gas reserves. They’re asking universities, charitable foundations, pension funds and other institutions to divest from these companies, as well as pipeline companies responsible for the expansion of fossil fuel projects.

Free, Prior & Informed Consent (FPIC) – 

This is a principle whereby a community has the right to offer or withhold its consent to projects which may affect the land(s) they customarily occupy, own or use. This is now an important principle in international law and holds jurisprudence related to indigenous peoples, their communities and their land.

Genetically Modified Organism (GMO) – 

A genetically modified organism (GMO) is an organism whose genetic material has been altered using genetic engineering techniques. Organisms that have been genetically modified include micro-organisms such as bacteria and yeast, insects, plants, fish, and mammals. GMO products are a growing concern for consumers and investors. GMO products have unknown long-term effects on human health, biodiversity, and the value/risk of businesses involved in this industry.

Global Impact Investing Network (GIIN) – 

The GIIN is a not-for-profit organization that is committed to increasing the scale and effectiveness of impact investing. (GIIN)

Global Impact Investing Ratings System (GIIRS) – 

A system for assessing the social and environmental impact of companies and funds. (GIIRS)

Global Reporting Initiative (GRI) – 

The Global Reporting Initiative is the only global framework for the standardized reporting of economic, social and environmental performance. The GRI guidelines are created through a multi-stakeholder, consensus-seeking process that involves an international network of business, civil society, labour and professional institutions.

Global Sustainable Investment Alliance (GSIA) – 

A Global network of membership-based responsible investment organizations. GSIA’s purpose is to extend the impact and visibility of sustainable investment organizations on a global level.

Global Warming – 

The term ‘global warming’ refers to the increase in the average temperature of global surface air and oceans since about 1950, and to continuing increases in those temperatures.

Another term for ‘global warming’ is ‘climate change’. Small changes in the average temperature of the planet can translate to large and potentially dangerous shifts in climate and weather.

The US Environmental Protection Agency says that the evidence is clear: “Rising global temperatures have been accompanied by changes in weather and climate. Many places have seen changes in rainfall, resulting in more floods, droughts, or intense rain, as well as more frequent and severe heat waves. The planet’s oceans and glaciers have also experienced some big changes – oceans are warming and becoming more acidic, ice caps are melting, and sea levels are rising. As these and other changes become more pronounced in the coming decades, they will likely present challenges to our society and our environment.”

Governance – 

One of the three extra-financial factors that are considered by responsible investors, alongside the company’s environmental and social performance. Measures of governance can include a company’s internal structure and practices, the consideration it gives to shareholder rights, its transparency and its accountability.

Green Bonds – 

Green bonds are broadly defined as fixed-income securities that raise capital for a project with specific environmental benefits. The majority of green bonds issued to date have been “climate bonds”, meaning that the money raised is invested in climate change mitigation or adaptation, including clean energy, energy efficiency, mass transit and water technology. Most green bonds have been either plain vanilla treasury-style retail bonds (with a fixed rate of interest and redeemable in full on maturity), or asset-backed securities tied to specific green infrastructure projects.

Green Investing – 

Investment guided by the environmental impact of the investment.

Greenhouse Gases (GHG) – 

A greenhouse gas (GHG) is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth’s atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone. Greenhouse gases greatly affect the temperature of the Earth; without them, Earth’s surface would average about 33 °C colder, which is about 59 °F below the present average of 14 °C (57 °F).

Human Rights Policy – 

The Canadian Human Rights commission defines human rights as “all the things we are entitled to be, to do or to have simply because we are human.” Human rights describe how we instinctively expect to be treated as persons.

Human rights define what we are all entitled to — a life of equality, dignity, and respect – a life free from discrimination.

You do not have to earn your human rights. You are born with them. It’s the same for every man, woman and child on earth.

Human rights policies are enacted to make sure that people and governments are held accountable if your human rights are not respected. In Canada, our human rights are protected by provincial, territorial, federal and international laws. Responsible investors work with the companies in their portfolios to ensure that human rights policies and practices are adhered to in Canada and abroad.

ILO Tripartite Declaration of Principles Concerning Multinationals and Social Policy – 

The policy represents an international agreement between governments, industrial associations, and unions. Created in 1977 and subsequently revised in 2006, the declaration communicates vast requirements on multinational businesses in the specific areas of labour and social standards. Each government is urged to structure its own national legislation utilizing the principles set forth in the agreement. The agreement outlines detailed requirements for labour and social standards.

Impact Investing – 

The Global Impact Investing Network (GIIN) defines impact investments as: “investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below-market to above-market rates, depending upon the circumstances.”

Impact Reporting and Investment Standards (IRIS) – 

An institution that provides investment performance metrics for Impact investors.

Independent Directors – 

An independent director, also known as an outside director, is a director or member of a board of directors who does not have a material or pecuniary relationship with company or related persons, except sitting fees.

Index – 

An index is a way of measuring the performance of sector specific markets, or the financial markets as a whole.  This is measured by calculating the prices of the constituents held within the basket of companies held. Widely used as a benchmark to measure the success of investments in similar industries, sectors and categories.

Institutional Investor – 

Institutional investors are organizations that pool large sums of money and invest those sums in securities, real property and other investment assets.

Typical investors include retirement or pension funds, banks, insurance companies, hedge funds, investment advisors and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others.

An institutional investor can exert influence over the management of the investee corporations because it will be entitled to exercise the proxy voting rights in a company. Institutional investors can actively engage in dialogue with the companies in its portfolios.

Institutional Investors Group on Climate Change (IIGCC) – 

A forum for collaboration on climate change for investors.

Interfaith Centre on Corporate Responsibility (ICCR) – 

A coalition of faith-based institutional investors.

Intergovernmental Panel on Climate Change (IPCC) – 

The IPCC is a scientific intergovernmental body under the auspices of the United Nations, set up at the request of member governments.

The IPCC produces reports that support the United Nations Framework Convention on Climate Change (UNFCCC), which is the main international treaty on climate change. The ultimate objective of the UNFCCC is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic [i.e., human-induced] interference with the climate system”. IPCC reports cover “the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation.”

International Labour Organization (ILO)  – 

The ILO gives an equal voice to workers, employers and governments to ensure that the views of each are closely reflected in labour standards and in shaping policies and programs. The main aims of the ILO are to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues.

Jantzi Social Index (JSI) – 

Launched in 2000, the JSI is a socially screened, market capitalization-weighted common stock index modeled on the S&P/TSX 60 consists of 60 Canadian companies that pass a set of broadly based environmental, social, and governance rating criteria. The JSI has begun to generate the first definitive data on the effects of social screening on financial performance in Canada.

Kimberley Process Certification Scheme (KPCS) – 

The process established in 2003 by the UN General Assembly to prevent conflict diamonds from entering the mainstream rough diamond market. (KPCS website)

Know Your Client (KYC) Forms – 

Is a standardized form in the investment industry that ensures investment advisors know detailed information about their clients’ risk tolerance, investment knowledge and financial position. (investopedia)

Lead Filer – 

Also known as the Primary Filer, this refers to an investor, usually a mutual fund company or institutional investor, who files a shareholder resolution to be voted on at a company’s AGM. Other investors may be invited to co-file the resolution.

Life-Cycle Analysis – 

This process helps to identify the total environmental impact of a product by examining the cumulative impacts at all stages of a product’s life cycle, including raw material extraction, manufacturing, transportation, use, and final disposal.

Low carbon – 

A low-carbon economy (LCE), low-fossil-fuel economy (LFFE), or decarbonised economy is an economy that has a minimal output of greenhouse gas (GHG) emissions into the environment biosphere, but specifically refers to the greenhouse gas carbon dioxide.

Mainstreaming and Integration – 

In the context of Responsible Investment, this refers to ensuring that environmental, social and governance factors are given full consideration and research support, as an integral part of the investment decision-making process. This extra-financial analysis therefore becomes fully integrated into the overall analysis of a company’s performance potential.

Materiality – 

In the sustainability context, information is material if it provides stakeholders with knowledge about the company’s environmental, social, and financial performance that enables them to make informed judgments and decisions about the company.

Microcredit – 

Refers to small, typically low interest loans to lower income entrepreneurs who have little or no access to capital or financing from their local institutions. These loans directly address housing, social and often environmental issues in developing countries.

Microfinance Institutions – 

Organizations that offer microcredit to individuals in developing countries. Loans can be as little as $50, and help borrowers who have minimal or no credit or collateral. The low interest nature of these loans is designed to foster economic growth and reduce poverty. This is done by assisting borrowers so that they can avoid usurious interest rates.

Mission Based Investing – 

The incorporation of an organization’s mission into its investment decision-making process. Most often used in reference to non-governmental organizations (NGOs), foundations, endowments and others working for progressive social change. Mission-based investing ensures that organizations’ investments are aligned with the overall goals of the organization itself and are helping, not hindering, the achievement of those goals.

MSCI KLD 400 Social Index – 

The KLD Social Index comprises companies with high ESG ratings and exludes companies involved in Alcohol, Gambling, Tobacco, Military Weapons, Civilian Firearms, Nuclear Power, Adult Entertainment, and Genetically Modified Organisms (GMO). The Index serves as a benchmark for investors whose objectives include owning companies with very high ESG ratings and avoiding companies that are incompatible with specific values-based criteria. Launched in May 1990 as the Domini 400 Social Index, it is one of the first Socially Responsible Investing (SRI) indices.

Multi Stakeholder Collaboration – 

When organizations and individuals come together to share knowledge, experience, expertise and perspectives in relation to issues. Multi stakeholder collaborations have a wide range or participants, often with conflicting and competing interests.

Negative Screening / Exclusionary Screening – 

Exclusion of certain sectors, companies or projects (from a fund or portfolio) based on Socially Responsible Investment (SRI) criteria.

Non-Governmental Organization (NGO) – 

NGO’s are characteristically advocacy groups interested in social, cultural, legal or environmental issues in a non-commercial setting. These organizations are civic with legal status, which operate independently from the government.

Norms Based Screening – 

A responsible investment strategy that screens investments against minimum standards of business practice based on international norms such as the ILO Tripartite declaration of principles concerning multinationals and social policy, the OECD Guidelines for multinational enterprises, the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the Principles for Responsible Investment.

OECD Guidelines for Multinational Enterprises – 

This is a comprehensive set of government-backed recommendations on responsible business. The governments who aim to adher to the Guidelines intend to encourage and maximise the positive impact multinational enterprises can make to sustainable development and enduring social progress.

Positive Screening – 

Inclusion of certain companies based on positive ESG performance relative to industry peers. This could include enterprises with good employer-employee relations, strong corporate social responsibility frameworks, strong environmental practices and operations that respect human rights in the communities in which they practice.

Precautionary Principle – 

This strategy of creating a ‘precautionary principle’ is a way to address uncertainty related to the risks of health and the environment. Although the issue(s) may lack concrete scientific acceptance concerning the causation, harm, likelihood and magnitude, this precaution involves taking steps to avoid serious and irreversible harm. In ESG, precaution is now an established principle of environmental governance.

PRI Academy – 

A web-based RI training program distributed in Canada in 2014 by the Responsible Investment Association. The Academy online courses offer self-paced and flexible learning. The program offers three courses (RI Fundamentals, RI Essentials and Enhanced Financial Analysis). The courses are eligible for CE credits.

Principles for Responsible Investment (PRI) – 

The United Nations-supported Principles for Responsible Investment (PRI) Initiative is an international network of investors working together to put the six Principles for Responsible Investment into practice. Its goal is to understand the implications of sustainability for investors and support signatories to incorporate these issues into their investment decision making and ownership practices.

Prospectus – 

A formal document which contains complete information and disclosure detailing the financial condition of a fund. Responsible investors are keen to see the management fees and expenses, asset breakdown and strategies associated with the fund. (DW- Social Fund)

Proxy Voting –  Most company shares carry voting rights. Shareholders can vote their shares by proxy instead of attending company meetings. There are a variety of matters that shareholders vote on each year. The most common are the election of directors, appointment of auditors and approval of executive compensation. But there are also votes relating to environmental reporting, climate change risk management and many other issues important to responsible investors. Responsible investors vote their to promote change and integrate ESG into management decisions.
Qualitative Analysis –  Securities analysis that uses subjective judgment based on non-quantifiable information, such as management expertise, industry cycles, strength of research and development, and ESG integration. This type of analysis technique is different than quantitative analysis, which focuses on numbers. The two techniques are often used together.
Quantitative Analysis –  Quantitative analysis is simply a way of measuring things. Examples of quantitative analysis include simple financial ratios such as earnings per share, as well as more complicated measurements such as discounted cash flow, or option pricing.

 Although quantitative analysis is a powerful tool for evaluating investments, it rarely tells a complete story without the corresponding qualitative analysis.
Renewable Energy – 

This refers to the use of energy produced from sources that do not result in the permanent depletion of earth’s resources.  More common sources of renewable energy sources include biofuel, geothermal, solar and wind power.

Responsible Investment (RI) – 

Responsible investment (RI) is the integration of environmental, social and governance factors (ESG) into the selection and management of investments. There is growing evidence that RI reduces risk and leads to superior long-term financial returns.  

In recent years, responsible investment has come to encompass ethical investing, socially responsible investing, sustainable investing, green investing, community investing, mission-based investing and more recently impact investing. They are all components of RI and have played a part in its history and evolution.

Responsible Investment Advisor Certification (RIAC) – 

the first certification program for providers of responsible investment products and services interested in investment opportunities that take into account environmental, social, ethical and governance considerations as well as financial returns. (website)

Responsible Investment Association (RIA) – 

Canada’s leading membership association for Responsible investment, including mutual fund companies, financial institutions, asset management firms, advisors, consultants, investment research firms, individual investors and others. (ria)

Responsible Investment Mandate – 

Investment policy inspired by responsible investment criteria, defined in cooperation with a unique investor when funds are allocated to an investment manager. 

Revolving Loan Fund –  Refers to a type of loan that has been made to a micro-entrepreneur. Typically the loan must be paid back prior to a subsequent loan being granted. This promotes community lending that supports members lending to one another rather than seeking outside sources.
RI Mutual Funds –  Mutual funds that integrate ESG analysis into the investment process. Includes many asset classes and many different investment strategies.
RIA Conference –  The Responsible Investment Association (RIA) hosts an annual event for responsible investment professionals. In 2014, the Conference took place during Canada’s first annual Responsible Investment Week – a week dedicated to education and awareness about responsible investment. The objective of the conference is educational and professional. Participants take part in seminars and workshops related to managing the risks presented by environmental, social and governance (ESG) issues, explore investment opportunities, as well as network with industry leaders, hear from ESG specialists and catch up on the latest issues, trends and developments in the field.
Risk Mitigation – 

The process of systematically reducing exposure to risk. Risk mitigation also aims to reduce the likelihood of occurrence of exposed risks.

Say on Pay – 

Rising inequality is a growing concern for Canadians – it presents a threat to our social fabric and our macro economy. Responsible investors help address the sometimes egregious pay ratios between executives and workers by encouraging companies to develop ‘say on pay’ policies and practices. ‘Say on pay’ promotes shareholder democracy vis-à executive compensation. In this approach, a company’s shareholders vote to oppose or approve executive pay.

Screening – 

See ‘Positive Screening’ and ‘Negative Screening’.

Shareholder Activism – 

Sustainable investing strategy that employs shareholder power to influence corporate behavior. Done by submitting and voting on proxy resolutions that influence a company policies and practices.

Shareholder Engagement – 

This is a strategy that is used to open communications between shareholders and a company.  The goal is to improve the ESG performance of the company.

Shareholder Proposal – 

A legal right of shareholders to create a proposal for change in corporate policies and actions. Shareholder proposals are tools of corporate engagement and shareholders reserve the right to circulate proposals, and vote on them at the company’s Annual General Meeting (AGM). For details on voting, see ‘Proxy voting’.

Shareholder Resolution – 

See ‘shareholder proposal’.

Social Auditing – 

A social audit is a formal review of a company’s behaviour vis-à-vis corporate social responsibility metrics. A social audit looks at factors such as a company’s record of charitable giving, volunteer activity, energy use, transparency, work environment and worker pay and benefits to evaluate the social and environmental footprint of the company in the communities where it operates.

Social Enterprise – 

A social enterprise is an organization that applies business strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Social enterprises can be structured as for-profit or non-profit organizations.

Social Factors – 

Social factors within ESG criteria in the context of investing include, but are not limited to, human rights, worker rights, safety, labour relations, child labour, community relations, and indigenous rights.

Social Finance – 

an approach to mobilizing private capital to deliver a social dividend and an economic return to achieve positive societal change.

Social Index – 

A social index is a measurement of the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.

Social Investing – 

When investors make decisions on investments which aim to achieve financial growth as well as accomplishing social returns. (DW – Social Fund)

Social License to Operate – 

Social license refers to local community or societal acceptance or approval of the activities and operations of a company. It exists outside of formal regulatory processes. Social license can be acquired through timely and effective communication, meaningful dialogue and responsible behavior. Companies without social license to operate may experience increased costs and significant delays.

Social Return on Investment (SROI) – 

SROI is a framework that can be utilized to help manage and understand the ESG outcomes created by corporate activity. SROI illustrates the value of impact and change in a dollar value.  Comprised of environmental, financial and social value, this framework has been designed to account for the corporate ESG activities in valuation.

Social Venture – 

Using capital funds to support economic ventures with a focus or mission involving the improvement of society.

Socially Responsible Investing (SRI) – 

Socially responsible investment or Sustainable and responsible and impact investing is the process of integrating societal concerns, personal values or an institutional mission into investment decision-making. It is an investment process that considers the social and environmental consequences of investments within financial analysis. Sometimes it is referred to as ‘green’, ‘impact’ or ‘responsible’ investing.

Stakeholder – 

This term refers to anyone who is directly or indirectly affected by a company’s policies and practices.

Stewardship – 

Refers to responsible caretaking of our natural resources.  The concept is based on the understanding that we do not own the resources, but in-fact are only stewards of those resources and are responsible to sustain them for our future generations.

Stranded Assets – 

Stranded assets refers to a scenario in which the value of fossil fuel reserves falls due to rising operational costs associated with carbon prices. Fossil fuel assets could become ‘stranded’ as production becomes unprofitable. In Canada, the possibility of increased regulation and public pressure, both domestic and international, poses additional risks. The risk of stranded assets is a growing concern for investors.

Supply Chain – 

A system of organizations, people, activities, information, and resources involved in the production and distribution of a commodity. Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer.

Supply Chain Risk Management – 

Supply chain risk management (SCRM) is the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing the impact of negative events on the reputation and continuity of operations of a company.

Sustainability – 

According to a UN report, “The world’s population of 7 billion is likely to increase to 9 billion by 2050. The demand for diminishing natural resources is growing. Income gaps are widening. Sustainability calls for a decent standard of living for everyone today without compromising the needs of future generations.”

Sustainability Report – 

A report produced by an organization to inform stakeholders about its policies, programs, and performance regarding environmental, social, and economic issues. Sustainability reports, also known as corporate social responsibility (CSR) reports, are usually voluntary, and are sometimes independently audited and/or integrated into financial reports. There is a growing trend towards integration and auditing.

Sustainability Themed Investing – 

Investment in themes or assets specifically related to sustainability (clean energy, green technology, sustainable agriculture).

Sustainable Development – 

The UN report, ‘Our Common Future’ states that sustainable development aims to, “[meet] the needs of the present without compromising the ability of future generations to meet their own needs.” Sustainable development will focus on producing economic growth, while addressing social issues and protecting the environment. Sustainable development places significant emphasis on long-term viability and growth.

Sustainable Investing (SI) – 

an investment approach making reference to environmental, social and governance (ESG) factors in the selection and management of investments. Some institutions, including the GSIA do not draw distinctions between this term and related terms including responsible investing and socially responsible investing.

Thematic Investing – 

Investment in sustainable businesses that are involved in energy efficiency, green infrastructure, clean fuels, low-carbon transportation infrastructure and those that provide adaptive solutions to some of the most challenging issues of our time. These are investments that present solutions to our problems and are great opportunities for investors.

Transparency – 

The process whereby an organization presents full public disclosure of essential information. This assigns responsibility and accountability to management decisions and company actions.

Triple Bottom Line – 

A holistic accounting framework with three parts: environmental, social and financial. These three divisions are also called the three Ps: people, planet and profit, or the “three pillars of sustainability”.

United Nations Environment Program; Finance Initiative (UNEP FI) – 

Refers to the United Nations Environment Programme Finance Initiative (UNEP FI), founded in 1992 in recognition of the links between finance and Environmental, Social and Governance (ESG) challenges, and the role financial institutions could play for a more sustainable world.

United Nations Guiding Principles on Business and Human Rights – 

The United Nations Global Compact (UNGC) describes the Guiding Principles on Business and Human Rights as “an authoritative global standard for addressing adverse impacts on human rights linked to business activity, wherever such impacts occur.

They set out, in three pillars, principles concerning the State duty to protect human rights, the corporate responsibility to respect human rights, and access to remedy for victims of human rights abuse.

The “corporate responsibility to respect” exists independently of States’ abilities or willingness to fulfill their own human rights obligations. The Guiding Principles require that companies have a policy commitment to respect human rights, and proactively take steps to prevent, mitigate and, where appropriate, remediate, their adverse human rights impacts.


is the U.S. ‘Forum for Sustainable and Responsible Investing’, a sister organization to the RIA.

Usury Rate – 

Refers to rates of interest that are substantially above the current market rates in their respective markets. Typically associated with unsecured loans (and lenders), these rates are often found to be unethical and illegal depending on the country and its laws.

Vendor Standards – 

Refers to standards set out by an organization to address workplace and human rights in their supply chains. Many responsible investors utilize their shareholder rights to encourage companies to adopt policies and practices that promote vendor standards to remove abuse, child labour, sweatshop conditions, and unhealthy or unsafe environmental conditions.

Venture Capital – 

Refers to an asset class, which is a form of private equity.  Venture capital provides financial support for new, high-growth companies that are unable to secure funding through the public markets via Initial Public Offerings (IPOS). The nature of venture capital investments offers investors the opportunity to earn a high return with significantly higher risk.

Venture Philanthropists – 

Referring to individuals or organizations who utilize many of the tools of venture capital to encourage social ventures in the start-up or growth stages of the business process. VP’s play an important role in the financial and capital markets for not-for-profit and socially focused organizations.

Voting Rights – 

Investors who hold shares in companies have the right to vote on management decisions and direction.

United Nations Global Compact (UNGC) – 

A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

Our Sustaining Members

Addenda Capital
Thomson Reuters

IA Clarington

Associate Members

Duca Credit Union
CIBC Mellon
FTSE Russell
Libro Credit Union
First Calgary Financial
State Street Global Advisors
Mackie Research
Investors Group
Mackenzie Investments
HighView Financial Group
CI Investments
Russell Investments
TD Bank Group
Franklin Templeton
Leede Jones Gable Inc.
Jarislowsky Fraser
The CUMIS Group
The Co-operators
Connor, Clark & Lunn Private Capital
CIBC Wood Gundy
Vigeo Eiris
BMO Global Asset Management
Aequitas NEO Exchange Inc.
Fiera Capital
Encasa Financial
Bullion Management Group Inc.
Global Alpha Capital Management
Vancity Credit Union
Servus Credit Union
Groupe Investissement Responsable
Guardian Ethical Management
ClearBridge Investments
La Caisse d’économie solidaire Desjardins
Assiniboine Credit Union
Amundi Asset Management
Alterna Savings
Kindred Credit Union
Phillips, Hager & North Investment Management

Supporting Members

Stewart Investors
Greenchip Financial
RE Royalties
Purpose Capital
Evolve ETFs
Etho Capital
Starboard Wealth Planners
The Smallwood Harvey Financial Group
Cash Management Group | Canaccord Genuity
The Wooding Group
Blue Heron Advisory Group