No real surprise here!

Remember the United Nations definition of sustainability included the word "growth"! It has meant that the term "sustainable" and "sustainability" has no real meaning, as evidenced by even the oil and gas industry and governments that depend on fossil fuel exploration and production revenues and royalties describe fossil fuels as "sustainable"

Just you wait and see the push to lift the offshore oil & gas moratorium on the BC coast!

I am waiting for the coming (soon) fossil fuel energy shock and subsequent economic crash and restructuring before things will really change.

I notice Van City credit union markets SRI funds, including ones from "The Ethical Funds Co." Their North American Equity Fund's top ten stock holdings include: Electronic Arts (mentioned in this article for producing violent video games); Nabors Industries (a major on- and off-shore driller serving the oil and gas industry), not exactly a poster sector for sustainability and clean energy; Corning (which develops super strong materials for military body armour, among other products, thus serving the US military).
I have another pet peeve about Van City and the credit union industry: They have their own stock brokerage now, Credential Direct, which
likes to market itself as bringing "credit union values" to its stock brokerage. Presumably, that should include treating customers fairly. They should be in the vanguard then , in terms of bringing commissions down to reasonable levels, as we see among US brokers, where a commission to trade a stock is often a flat $5 or $10.
In Canada, especially in trading stocks with prices of <$5(penny stocks are treated the most unfairly), commissions are outrageous.
A stock trade that could cost $5 in commissions with a US broker can easily cost $100, $200, or more with a Canadian broker, including Credential! It's gouging, plain and simple.
I have voted with my feet/wallet. I've moved
my stock trading over to U.S. brokers that have now opened up shop in Canada, and charge those lovely rock bottom commissions. With some of these US brokers you can only trade US listed stocks (but since many Cdn. stocks list on both the TSX and on a US exchange, you can still buy lots of Cdn. stocks).And at least one of these US brokers with a Cdn. subsidiary allows you to have a $Cdn. account and trade on the TSX, at rock bottom rates. I say: Abandon Cdn. brokers. Go to US brokers, where there is competition, and where the investor is treated fairly!

This article was uninformative, not informative.

The article's source is the Independent Media Institute at alternet.org. This is a US media source. The SRI companies named in the article are US-based as well. Most of us reading The Tyee are from BC. Mutual funds are provincially sold and regulated. As British Columbians, it would be difficult for any of us to invest in any of the SRI companies mentioned in the article, so it's not relevant to you.

I'm not even sure why The Tyee chose to run this article. It's hardly relevant to BC investors. Perhaps the unamed "Canadian magazine" mentioned in the article came up in a news-wire hit and they needed some financial content for the day.

The Tyee has many great departments doing good work. Finance isn't one of them. Perhaps none of the writers or editors are experts on the investment world?

The US brokerages are simply doing what ING is doing in Canada...losing money in the short term to gain market share in the long term. Canada is a small market, so it's affordable for foreign companies to set up shop and set rock bottom prices in order to force Canadian competitors out of business. Once that happens watch your premiums creep back up. If you're unfamiliar with the tactic then Google Walmart's business model.

You could have done the constructive thing and actually voted, as a credit union member. You own a piece of Van City (or you did at one point) and you can put resolutions before the membership to vote. Democracy isn't simple, but it's still the best thing going.

Despite your criticisms, Credential Direct still managed to get 1st place in the Watchfire Gomezpro rankings for Canadian Brokers, ahead of the Big 5 banks.
https://www.watchfire.com/gomezpro/viewscorecard.aspx?iid=85&scid=670&oid=1

There may be very good reasons for EFI to invest in a company that has any sort of tarnish, social, enviromental, or otherwise. The article poorly highlighted one of the most important aspects of SRI, proxy-voting. Here's how it works:

1. You put your RRSP into Ethical Funds Investments.
2. EFI invests in a company known for not being the best corporate citizen, HUMUNGOUS CO LTD.
3. You own HUMUNGOUS CO through EFI, so EFI can vote on your behalf at HUMUNGOUS's meetings.
4. At HUMUNGOUS CO's annual general meeting EFI puts forth a resolution that says, "We, the shareholders, insist that you stop buying non-recycled paper, because it's bad for the company's public image. If the media finds out our stock price could go down." The other HUMUNGOUS CO shareholders (investors) see this as a wise course of action and vote yes.

Of course, it's usually much more complicated than this. Usually there's plenty of dialogue first before a vote. Often the invested company's board is not too interested in dialogue, but they don't have much choice. The SRI company owns a part of them.

In other news, Joe Farmer grew wheat, that was sold to Robin Hood flour, that was sold to the US Military, who made it into bread for their soldiers. Joe Farmer is clearly evil.

The investment screens that go into SRI are forced to set realistic boundaries. In your example above, it's likely that Corning makes the material, which has a wide variety of uses. They sell it to another company that makes it into body armour. Or, EFI could be engaging in shareholder dialogue that goes something like this, "That super-strong plastic is great stuff for building emergency-shelters, but could you please stop selling it to the military? If you don't we'll have to put forth a resolution."

SRI can't be perfect. It simply seeks to react faster than changes to the laws that govern corporations. For example, it may take decades for enviromental laws to be fully sustainable. But in the meantime SRI works to raise the bar on what is acceptable in the corporate world, as opposed to lowering it, which is what most corporate lobbies attempt to do with all goverments.

The article is so 2003! Times have changed. I don't think many expect much from corporate ethics anymore. Besides the most ethical companies are local-economy based. They are not listed on the TSX.

Furhtermore, the stock market is not the place to be if unless you want to loose money keeping the finacial tapeworms fed.

http://www.financialsense.com/

Cdn. vs. US Brokers:
The US online and discount brokers are by and large profitable. It's a competitive industry, but not to the extent that these firms are burning cash, losing money to drive out competitors. Many of them are
very profitable.Should a simple stock transaction that can take seconds with computers cost $250 (Credential's top commission rate)?
The answer, according to these (profitable at $5 or $10 rate) US brokers, is NO, it should not!
The Cdn. brokerage industry has been gouging and profiteering at the expense of clients
since day one. They've been in no hurry to change this unfair system up until now. I just hope these US brokers that are now operating in Canada are finally going to be the catalyst to shake up the Cdn. "cartel" that keeps rates sky high.If the US guys with Cdn. subsidiaries start offering self-directed RRSPs, then that could really be a catalyst for change!
Someone suggested making an issue of it as a Van City member. I'm not a member. You don't have to be to use Credential. Anyway, I think the two are associated, but I doubt that they're directly linked such that Van City members could vote on Credential policies.
I suppose one could possibly propose a vote on directing Van City to put pressure on Credential...
Someone else can battle Van City and Credential.I've said goodbye. I'm happy to take on a role of informing people of the situation by posting my thoughts on web forums occasionally.
So, I still say: Abandon Cdn. brokers. Go to US brokers!And save your money (As the ING guy says).
As for the SRIs. I prefer to research stocks on my own, and decide which ones I can own and have a clear conscience about them.
Also, small cap start up alternate energy
companies, and the like, are much easier for individuals to own than for large funds to own.
Without going into detail, this is due to small
companies having small floats (of available stock), and that they tend to trade at low volumes (only a small number of shares are available to be traded each day). These are huge obstacles for large Funds with lots of cash to put to work. It's hard for them to acquire meaningful stakes in such companies. But an individual can acquire a significant stake of a small cap for him/herself. If someone has the time and inclination I believe they'd be further ahead putting together their own ethical investments, instead of relying on a SRI Fund.

Indeed, times have changed! People DO expect corporate ethics now. Enron et al are expected to face jail time. Hopefully SRI will help investors choose stocks wisely and prevent catastrophes such as these.

A company can quite easily be listed on the TSX and be local. Ethical owners need to raise cash to grow to compete, just like any other company!

Credential's lowest commision rate, (which will be most trades for a small-time investor) is a reasonable $25.

http://www.credentialdirect.com/content/services/fees_commissions/index.asp?cu=

Power to them! No company in the industry wants to have anything to do with Self-Directed portfolios right now. They're too expensive to administer. There's so many regulatory issues around self-administered accounts. Whole client bases are being sold from company to company. If the US companies think they can make a buck off these money pits I'll be the first to switch to them.

Van City owns Credential, along with a few hundred other partnered Credit Unions. Van City is the biggest of the bunch, so they've got some good say on the issue. It's a shame you didn't try to take up that cause. You had the best chance of feedback if you had a Van City membership.

This is the core of your dissatisfaction with SRI. You're a Do-It-Yourself investor. Not everyone wants to be their own car mechanic. Most people would be happy to have their mutual fund company screening their investments for enviromental, labour, military, tobacco, and fiscal reponsibilities.

Hawken is it right: the status quo is unacceptable. Markets have always been guided by self-interest and I don't see where he gets the idea that will change:

"Will investors put financial return before conscience? Many will, and the number of people who won't compromise their values for profiteering is increasing."

What's the solution? Shift taxes so that they hit the companies with poor and environmental social values and reward those that are "moving in the right direction". For example, in B.C. it's lunacy to have be giving mining companies tax breaks or subsidising the export of raw logs, while small farmers don't even have the security of knowing that the land that they are farming wont be opened up to resource extraction companies. Ownership of land does not include ownership of teh minerals in the ground.

Wow. It's worse than I imagined, if Van City is the largest % owner of Credential, and they've allowed their brokerage to continue with similar commission policies as the those of the big bad banks! It's true Credential's are lower than the bank owned ones, but not significantly so. The same sliding scale system that really gouges people remains intact at Credential.
To ascertain the impact of commissions you need to look at the % costs.
$25 is reasonable? What if someone wanted to make a small investment in a stock, say $250 worth. That "reasonable $25" would ding you for 10% right off the top. Say the investor held the stock for a while, watched it appreciate 20%, and decided to sell their very successful looking investment. To sell it, Credential would charge another $25. The original $250 investment went up 20%, to $300, but after commissions, our poor investor finds that, instead of a nice little windfall, he/she has $0 in profit to show! Their stock appreciated 20%, yet Credential took every penny of that profit away from them. They have nothing to show for risking their money.
Here's a real life Credential example of my own: I put in a sell order for my 6500 shares of a junior nickel miner, Dynatec, at $1.26 a share, for a total value of $8,190. Credential charged me one and a half cents a share commission , plus $4 because it was a "limit" order = $101.50. I had purchased it earlier at $1.17 a share, for a total value of $7605, and was charged $101.50 to buy =$203.00 total commissions, which represents 2.66% of my original $7605. It's not as depressing as the first example of the $250 investment, but it's still a very steep % to pay , for a simple online stock buy/sell. An American broker is likely to charge ONE TENTH the commission
Credential would, and still make a profit!
I can't see any justification for this, or any other way to view it except as gouging.
You might have seen news about complaints about mutual fund MERs (Management Expense Ratios), that is the % the fund takes off your investment annually,as their share for paying managers to research, follow, and buy and sell stocks in the fund, on your behalf. MERs of over 3% are on the high side. 2.66% would be higher than average. Many people believe Fund MERs are still too high.Compare this to Credential's 2.66% they charged me to buy and sell one stock. They offered no advice or expertise on the stock. I chose it on my own through researching info. found free over the net. I entered the buy and sell orders online myself. The orders took seconds to be transacted. Where is $203 or 2.66% worth of service to be found here? It isn't to be found. It's an outdated,unfair system that gouges customers.
Credential's system also works against the small innovative companies the article mentions, as often being in the vanguard for things like alternative energy. This is because small companies have stocks with small prices per share, and the way commissions are structured, Credential charges you much higher commissions on stocks with prices <$5. Eg. If you bought $5000 worth of a $50 stock you'd pay $25 commission. But if you bought $5000 worth of a $1.05 stock, you'd pay $71.40 (one and a half cents per share), nearly 3X as much!
You can see that you are penalized extra, when you buy these small companies, which means the companies too are penalized, 'cause they're rendered less attractive (because more expensive) as buys. Large multinationals are favoured by the commission structure. Large Funds, whether SRI or not, also favour the big mutinationals in their stock choices, while they avoid the small companies. They are almost forced to do this because of the amount of cash they need to put to work. That's why I say an individual can be better off putting together his/her own SRI portfolio. Your hands aren't tied in the same way. You can buy what you want.