Blog: From Ethics to Impact: The History of Making a Difference with Dollars

Although the practice of Impact Investing is relatively new (indeed, the term was only coined in 2007)1, the concept of using one’s money to make a difference has been around for a long, long time. But it didn’t start with a triple bottom line philosophy…The movement began more as a way to avoid evil:  In relatively modern history–the 1700s, to be more specific–Methodists began avoiding investment in industries that were considered to be harmful, like guns, liquor, tobacco, and gambling2. (In later years, these became known as “sin stocks”.)


“Sin stocks” were not supported by Methodists and other religious communities.

Now fast-forward 200 years: It’s the 1960s and a modern era of investment has begun, interestingly, it is also strongly rooted in faith. During this era, Toronto became home to the Taskforce on the Churches and Corporate Responsibility (TCCR), a coalition of Canadian churches and religious orders. It addressed Canadian corporations, the Canadian government and international institutions on issues of corporate, social, and environmental responsibility. By supporting the member organizations to communicate their concerns (aka “shareholder activism”), the Taskforce helped to convince Canadian companies to pull out of South Africa during apartheid, and pushed a company in British Columbia to publish the first environmental report by a publicly traded company.3

The Taskforce also assisted churches in examining their own investment policies and practices3: Whereas the Methodists of the 1700s had avoided investing in certain industries by screening them “out”, known as “negative screening”, the 1960s and ‘70s saw a new development in the screening process: “positive screening”, the process by which companies were screened “in” for meeting certain standards. Negative and positive screenings were generally referred to as “ethical investment”. As well, some religious communities and churches sought ways to invest directly in community-based projects. For religious communities, this was a new development for the ‘alternative investment’ movement–“Or what now’s called the ‘social impact’ industry,'” says Moira Hutchinson, board member of the Canadian Alternative Investment Cooperative. (Side-note: This is a rather amusing example of how language changes over time, in 2014 “alternative investment” now “includes hedge funds, managed futures, real estate, commodities and derivatives contracts”5.)

Moira was one of the key members of The Taskforce and is also a recipient of the 2013 Canadian SRI Distinguished Service Award. She further explains how the screening process was refined over time:

“We were looking for the companies that were the ‘best of sector’, for example, looking for the mining company that was doing the least damage… …We wanted to figure out how to pick out the companies that were the best in a range of factors that could be measured, not just environmental impact, but diversity of employees, diversity on the board of governance…that was the approach that became fairly standard among ethical investors at that time.”

Moira acknowledges that over the years “there hasn’t been a lot of opportunity for individual investors to invest in alternative…Or social impact investments.” But there is hope for the future: “It’s only in very recent years that, with the whole concept of ’impact investing’…That there will be more opportunities for people to invest in those kinds of investments, and without having to have substantial amounts of money.”

Now we have better than “best-of-sector”. Companies that offer impact investments are not doing the least damage, but aim to do the most good. These companies exist to monetize their mission, to do good and make money doing it. And you can join in.

(Shameless plug: For $500, you can invest in ZooShare and earn 7% each year for 7 years, while generating renewable energy and cleaning the air.)


1) Financing Social Good: A Primer on Impact Investing in Canada. Toronto: Purpose Capital, RBC, Mars Centre for Impacting Investing. Pg. 5. Retrieved from:
3) Darwin, Frances. Personal Interview with Moira Hutchinson. July 28th 2014

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