Vancity, a member-owned financial co-operative operating in Victoria and the Lower Mainland, has been a pioneer in the realm of corporate social responsibility (CSR) and progressive lending since 1946. They are now among the first institutions in Canada to take CSR to the next logical level: impact investing.

We spoke to vice president of community investment William Azaroff in Vancouver.

When did Vancity get involved in impact investing?

We made the decision back in 2009 to move from a CSR model, where we give 30 per cent of our profits back to our members and the community in the form of grants and other forms of philanthropy, to a model where the actual business we do is being invested for impact. We started making a very intentional shift towards using our balance sheet for impact rather than just a profit centre.

Why?

I think it’s part of our history of wanting to invest in parts of our community that needed a little bit of extra support. In 1946, the year we were founded, we became the first bank to give a loan to a woman without a male co-signer. I think it occurred to the board and the executive that as much impact as we could make by giving away $18-$19 million a year, it made sense that if you wanted to make impact at scale, working on our balance sheet was going to achieve a lot more.

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William Azaroff , VP of community investment, Vancity

How do you define investments that make an impact?

We have three basic guiding principles. We want to see more social change and financial inclusion. We’re concerned about environmental sustainability, and as a financial co-operative, we want to see more of the economy become co-operative, either operating on a co-operative model, or in the form of more corporations co-operating.

What areas is Vancity concentrating on at the moment?

Micro-finance, indigenous organizations, and local organic food. Each of these areas was chosen because it demonstrates a clear, positive community impact, improving people’s lives and sustaining the environment. Many of these areas also have strong growth potential and are currently underserved.

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Is this sort of radical, balance sheet-driven social operation the sort of thing you can see spreading?

We’re part of the Global Alliance for Banking on Values, a network of 30 some odd financial institutions around the world that are doing what we’re doing. Do I think that a big bank in Canada is going to adopt this model of impact investing tomorrow? Probably not. But I would like to live in a world where this is the norm. People earn their money ethically, put it into financial institutions, but are these institutions using the money in a way we would think is ethical? Ultimately, I think this should be one of the major criteria people use when choosing a financial institution.