Perhaps after the losses of the past few years, it is time to recalibrate the definition of a successful return.

The most obvious way to define success is by comparing straight financial results: up 12 percent or down 22 percent. Any capitalist would argue that the former is better than the latter. However, what about those investments that are larger than the mere bounds of profit, returns that reflect the positive or negative impact on society? This is where ethical investing comes in.

At its essence, “ethical investing” is the process of applying a social conscience to where your money goes, based on three key platforms. One is to avoid causing illness, disease or death. A second is to avoid damaging or destroying he environment. A third is to treat people with respect.

One organization that espouses this doctrine is the non-profit Social Investment Organization (SIO), a group that is largely funded by dues from its 500 members across Canada. As Executive Director Eugene Ellmen states, “Our members passionately believe that it makes financial and ethical sense to invest in a socially responsible way. So our mandate is to provide information and training, and to work for public policy that will help make SRI a mainstream financial choice.”

The SIO has a number of mutual-fund members that try to fulfil that mandate. These include funds offered by Acuity Funds Ltd., Canada Life Generations, Desjardins Financial Security, Ethical Funds Inc., Manulife Financial Corp., Meritas Mutual Funds, Great-West Life Assurance Co., Investors Group, Mackenzie Financial Corp., Mavrix Fund Management Inc., Middlefield Financial Ltd., StrategicNova Mutual Funds, and Sentry Select Capital Corp.

Some labour funds also focus on social responsibility and offer a potential tax break. These include the Crocus Fund in Manitoba, First Ontario Fund, Fondaction and the Solidarity Fund in Quebec, the Workers Investment Fund in New Brunswick, and the Working Opportunity Fund in British Columbia.

Which are the best? Quite frankly, we have not researched that question, but all of these plausibly offer some positive social returns in addition to the potential financial ones.

How do these investments do relative to the markets? As usual with investments, it depends on the calibration of the measuring tool. One of the best yardsticks available is the Jantzi Social Index, a group of 60 market-cap-weighted stocks chosen for their ethical practices. In the three years ending December 31, 2002, the fund was down 17.4 percent, which was a tad better than the S&P/TSX Composite Index and the S&P/TSX 60. South of the border and over a longer period of time, the Domini Social Index of 400 companies has outperformed the S&P 500 by about 56 basis points.

One key strength of people uniting to invest in this manner is that shareholders can use their influence to bring about constructive corporate change. Often, the impact via the boardroom can be far more effective than holding placards or ranting in isolation.

With an auspicious place to invest difficult to come by, knowing that one is investing responsibly can offer some solace. And while that might not improve the bank balance, it can add compound interest to the quality of life.