Socially Responsible Investing - SRI Screens

A First in Canada – SRI GICs!

In 2016, Kindred became the first Canadian financial institution to validate all of our GICs as Socially Responsible Investments. Up until that time, the SRI approach to investing, which includes sustainable screens, had only been applied to mutual funds and market investments.

Investing in a Kindred GIC provides our members with the confidence that their funds support loans which clearly align with a sustainable, responsible view of their communities and the world.

Why does Kindred use screening?
Our approach to lending allows us to ask values-based questions in a structured way. The inclusion of lending screens enables us to balance funding loans with GIC deposits from members in a way that encourages our members to live out their values in practical, faithful ways. It’s designed to foster the financial health of our members and our credit union from both a risk and responsibility perspective.

How does it work?
At Kindred, we incorporate a set of socially responsible lending criteria into our 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. Because our loans are funded by members’ GIC deposits, the screens in place ensure the GICs are SRI compliant.

What do screens do?
Screens help all parties identify a range of activities that member businesses seeking a loan might be involved in. This information helps identify mostly non-financial risks to their business and to Kindred’s loan portfolio. In turn, this information provides a watch process to assist members in building businesses that are more socially responsible.

On the member deposit side, these screens allow Kindred to offer GICs that are validated as ‘SRI’ – a unique offering in the marketplace!

What are the ‘screens’? And what are the tolerance levels?
Kindred has the following screens and tolerance levels in two categories:

Product Involvement
Kindred will avoid lending to borrowers that meet the criteria below.

• That are involved in the direct manufacturing and / or production of: Alcoholic Beverages; Cannabis; Gambling; Military and Weapons; Nuclear Power; Pornography and Tobacco.
• That derive 10% or more of revenue from the distribution and / or retail sale of: Cannabis; Gambling; Military and Weapons; Nuclear Power; Pornography and Tobacco.
• That derive 25% or more of revenue from the distribution and / or retail sale of: Alcoholic Beverages.

Stakeholders
Kindred will avoid lending to companies that have any significant negative impacts in the following areas: Environmental Stewardship; Community Relations; Human Rights; Employee Relations; Animal Welfare; and Business Ethics.

Why do we tolerate any revenue from these products and services?
Kindred is following best practices in the broader SRI industry and applies these in a consistent manner within our process. In practice, having tolerance levels, rather than absolute prohibitions, allows us to engage with members and influence their business practices in positive ways. Some small business owners might be obligated by the nature of their business to carry some of these products (e.g. a convenience store). We want to be able to serve their needs and identify ways they can be more socially responsible.

What happens to loans that are SRI non-compliant?
New members applying for credit that is not compliant with Kindred’s screening criteria will have, in most cases, their credit application declined. For existing loans coming up for renewal, Kindred has incorporated SRI non-compliance into our current procedures. Kindred has established an internal limit for SRI non-compliant accounts to comprise no more than 2.5% of the credit portfolio.

How can I find out more?
To learn more about this approach, please call or visit your local branch and speak with your Branch Manager, Account Manager, or a member of our Wealth and Investment team. We would appreciate hearing what you think about this approach as we continue to build a credit union that inspires peaceful, just, and prosperous communities.

Kindred’s commitment to values-based products and services
SRI GICs are just one of our many values-based products. Click on the links below to learn more about how Kindred is impacting our world in amazing ways!

Creation Care Loans
Creation Care Loans are available to members who would like to purchase products such as solar energy systems and geo-thermal heating/cooling, as well as home upgrades prescribed as part of an eco-energy audit. Creation Care Loans offer a renewable fixed rate loan with a 0.5% environmental discount.