Canada is facing an academic research deficit on responsible investment. However, there are new opportunities on the horizon, including a major international conference and the Carleton Centre for Community Innovation’s Responsible Investment Initiative.

The project has already released its first paper, Responsible Property Investing and Property Management: Exploring the Impacts of Good Labour Practices on Property Performance, a collaborative project between Shareholder Association for Research and Education (SHARE), the Responsible Property Investing Centre and the Carleton Centre for Community Innovation.

The study looks at the impacts of labour practices in commercial property management on overall property performance, profiling a number of case studies in an effort to help property investors, companies and managers develop an understanding of best practices in the commercial property sector.

“The research and case studies will allow real estate investors, companies and property managers to better assess the role that strong employment policies and programs can play in the fulfillment of their fiduciary duties,” according to the Carleton Centre’s website.

The centre is also working on a paper on social finance from an investor perspective, co-authored by project director, Tessa Hebb, who spoke at the recent Canadian Responsible Investment Conference in Winnipeg. Hebb says the new initiative has already lined up 16 business partners, including SHARE, the Social Investment Organization, the Canadian Business Ethics Research Network and Alterna Savings.

“We have deep inter-connections with the industry in Canada,” said Hebb, author of the book No Small Change: Pension Funds and Corporate Engagement. “This is a co-production of knowledge with researchers, the university and the business partners. Knowledge isn’t created in isolated universities, ivory towers, and then issued out to the world to make it great. The capacity for action can only be realized through co-productions.”

Carleton plans to post research papers, case studies and course materials on its website. “The Internet will be the key way to transfer this knowledge,” she said. The research will be conducted across all asset classes, including bonds, cash and real estate. “Too often in the past, academic research has just focused on public equities, at the expense of other asset classes.”

And there will be no shortage of research: Ottawa’s Carleton University is hosting the prestigious United Nations Principles on Responsible Investment (PRI) Academic Network conference in October. “We’re going to be able to bring many of the world’s leading academic experts on this topic together with PRI signatories and stakeholders from Canada and the U.S.,” says Hebb.

The first day of the conference will focus on papers based on the theme, “The Next Generation of Responsible Investment.” Sixty papers were presented for consideration and 20 will be presented at the conference, including three from Canada. Twelve student papers will also be presented and five have a Canadian connection.

Hebb notes that reliable and accurate data is difficult to find in Canada, since there are fewer transparency requirements and publicly-available filings. This lack of data could be hindering responsible investment research in Canada, she said.

Indeed, M’Zali Bouchra, finance professor at the University of Quebec-Montreal (UQAM), who also spoke at the Winnipeg conference, says most of her past work has been done outside of Canada because of trouble finding data.

However, Bouchra did produce a study comparing Canadian and Italian SRI mutual funds in 1997. In both cases, the SRI funds underperformed their benchmarks, but so did their non-SRI counterparts. A similar study comparing French and American mutual funds in 2000 and again in 2007 led to the same conclusion. “It does not cost more to invest in SRI,” Bouchra says. “If you can convince investors that they can have the same financial performance, there will be a trend towards SRI.”

Bouchra hopes to update the Canadian results in the near future, comparing SRI funds to their non-SRI counterparts, as well as looking at other issues such as shareholder activism in Canada compared to other countries.

Hebb says a high profile event like the PRI conference will help to advance academic research in Canada, but she admits those in the academic world need to spend more time promoting their work. “We have to broaden our audience,” she says. However, academics working in SRI face the same challenges as advisors. “Mainstream investors still believe SRI restricts returns,” Hebb says.

Still, Hebb believes the current economic crisis represents an opportunity for SRI advocates to shift the focus to long-term thinking.

Doug Watt is an Ottawa-based writer and editor and co-founder of SRI Monitor, a blog on socially responsible investing.