Ontario Credit Union Offers a Financial First: Socially Responsible GICs

Mennonite Savings and Credit Union (MSCU), based in Kitchener, Ontario, said Thursday that they are the first Canadian financial institution to offer socially responsible guaranteed investment certificates (GICs). Until now, the RI approach to investing, which involves sustainable screens, has been limited to mutual funds and market investments, the credit union noted.

"We are thrilled to be a leader in SRI," said Brent Zorgdrager, the MSCU's CEO. "Our commitment to our members is to to continue to look for ways to offer value-based products that connect faith and value with finances, inspiring peaceful, just and prosperous communities. Investments in the MSCU SRI GICs provide our members with the confidence that their funds support loans which clearly align with a sustainable, responsible view of their communities and the world."

ESG research firm Sustainalytics helped the credit union develop a set of socially responsible lending criteria to incorporate into its agricultural and commercial lending practices. These criteria include screening business borrowers for any involvement in industries such as alcohol, tobacco and gambling and for any significant negative impacts on the environment, human rights or communities. Once the screens had been in place for six months, Sustainalytics carried out a review of MSCU's lending portfolio to validate compliance with socially responsible criteria. Because these loans are funded by members' GIC deposits, the screens in place make sure the GICs are SRI compliant.

"MSCU's socially responsible GICs address a growing demand among individual investors considering the environmental and social impacts of their investments," said Sustainalytics CEO Michael Jantzi. "MSCU has embedded socially responsible criteria into its lending practices in an innovative way and in doing so is providing individuals with greater access to SRI retail banking products enabling them to align their investments with their values."

Responsible Investment Association CEO Deb Abbey said that while many financial institutions offer responsible investing options, MSCU is leading the way by integrating environmental and social factors into their GICs. "We're very excited to see them take this initiative," she said.