Ethical investing may well be the next frontier.

Many of us have worked hard to become better global citizens. Through recycling, caution in consumption, frugality in energy use and advocacy for the poor, we all try to make a difference. Our investment portfolio, through the practice of ethical investing, just may be the next lifestyle change to tackle.

What is Ethical Investing?
Ethical investing, also known as socially responsible investing, green investing or sustainable investing, involves carefully evaluating your investment portfolio to ensure that the stocks/bonds/funds and companies you invest in meet certain ethical and environmental standards.

Ethical investing is a conscious attempt to bring global principles to bear on our pocketbooks.

Ethical funds use your money to make the world a better place, or—at the very least—attempt not to make it any worse. Some investment companies deal only with ethical funds, others offer them to interested investors as one option among many.

Growing Trend
If your financial advisor is not well versed in socially responsible investing, it may be because it is still a growing field. According to the website RESPS.ORG, socially responsible investments grew by 27% between 2002 and 2004 in Canada. Clearly, it is a viable option for savvy investors who care about their money and the world.

If you’re interested in ethical investing, here are some ways to get started.

1. Decide on your own personal parameters.
   There are some ethical issues that are obvious. Few people want to invest in companies that use child labour or engage in unchecked pollution of the environment. Other issues are less clear, like companies being present in war-torn countries or creating products that are not recyclable. Take the time to consider what is most important to you.
    
2. Look past the labels.
   It is important to note that even if an investment is not designated “ethical,” that does not necessarily mean it is “unethical.” Investors need to ask questions.
   
   If a fund has been labeled “ethical” or socially responsible, however, investors should be able to have confidence that the investment has taken environmental and social issues into account. But it still won’t hurt to ask a few questions.
    
3. Do your own research.
   The internet is a great place to begin to research ethical investing in Canada. Sites such as www.socialinvestment.ca list socially responsible investors across the country, province by province.
    
4. If you work with a financial advisor, ask her to do some research for you.
   Some advisors hesitate to push ethical funds because they feel some funds do not have a record of performance long enough to track and review. You may be their first client to ask about ethical funds. Give them a timeframe to investigate and present some options to you.
    
5. Consider forming an investment group.
   With like-minded friends, you can share the research responsibilities, discuss your investment experiences and move forward together. Together you can watch as the field of ethical funds continues to grow.

Click here to learn more about being globally conscious in the way that you shop.