For the socially responsible investment movement, the financial collapse is  a rueful I-told-you-so moment. The Jantzi Social Index lost 26 per cent in October, but did 200 basis points better than the S&P/TSX 60, the conventional stock index the JSI most closely resembles. It beat the S&P/TSX 300 by 250 points.

"If anybody says right now we're in the golden age of socially responsible investing that might be a little bit naive," said Jantzi. "This is a difficult time for everybody."

In October Canada's mutual fund industry endured $8.4 billion in redemptions. It is perhaps a sign of the times that tiny Meritas Mutual Funds in Kitchener, Ont., went $2 million in the positive direction that same month.

Christian ethics influence market Catholic Register Staff It's probably stretching things to begin the history of Christian attempts to reform markets with Jesus throwing money changers out of the temple sometime between 25 and 32, but it's fair to say the collision between Christian ethics and financial markets is not new. 1975 – Canadian churches begin working together on corporate social responsibility, starting with trying to get corporations to pull investments from South Africa during the apartheid years. This leads to the creation of the Taskforce on the Churches and Corporate Responsibility, whose functions have since been taken over by KAIROS. 1978 – The Interfaith Centre on Corporate Responsibility in the United States forms also to advocate divestment in South Africa. Today the organization represents nearly 300 faith-based institutional investors on a range of issues. 1987 – ATRI, the Association of Treasurers of Religious Institutes, forms in English Canada to match the already existing Quebec association of treasurers for religious orders. From the beginning the association is involved in shareholder motions at annual general meetings and other efforts to encourage corporate social responsibility.

As people pick through the wreckage and ask what went wrong, the SRI community is hearing its issues come up in the mainstream business press.

"Some of the failures that were magnified in the last few months, but were beneath the surface the last few years, were failures related to issues we've been trying to talk to companies about for a while," said Meritas Mutual Funds CEO Gary Hawton. "We're shedding light on some issues that companies have been dismissing. Now they're saying, "Why don't we talk to these people? Maybe they do have a valid point.' "

Getting the chance to say "I told you so" brings no great joy.

"I think it's unfortunate that the worst has come to pass," said Ian Thomson, the corporate social responsibility expert with Canada's ecumenical social justice agency KAIROS.

The New York-based Interfaith Centre on Corporate Responsibility warned about both the morality of predatory lending and the shakiness of mortgage-backed securities as far back as 2000. Innovest Strategic Value Advisors, an SRI investment analysis firm with offices in Toronto, New York and London, forecast that subprime lending would collapse the market back in October 2006.

SRI analysis then was treated as something exotic or marginal by mainstream investors.

"Analysts did not take these issues into account. Rating agencies did not take these issues into account," said Social Investment Organization executive director Eugene Ellmen in Toronto. "If they had there would have been a whole lot less of this subprime lending done. Mortgage-backed securities would have been more difficult to get into the market. The rating agencies would have rated them lower than they actually had, because they would have taken these social considerations into account."

For now, board rooms are a little more likely to listen to the religious and socially motivated investors who suddenly seem so prescient.

"In the short term I think there's going to be increased investor interest on these issues that speak very directly to issues of corporate governance and corporate bottom lines," said Ellmen. "Investors are going to hold corporations feet to the fire even more closely that they have in the past."

Say-on-pay votes are the most obvious of low hanging fruit. Meritas Mutual Funds, working with Vancouver-based SHARE (the Shareholder Association for Research and Education), has proposed proxy motions to Canada's five major banks plus Nortel Networks Corp., Sun Life Financial Inc. and TMX Group Inc. (which operates the Toronto Stock Exchange) to allow advisory votes on executive compensation. Last year the same proxy votes were proposed and opposed by boards of directors.

The Meritas proposals averaged 40.5-per-cent support last year. This year Hawton projects the boards of directors are either going to propose their own say-on-pay resolutions or get voted down by their shareholders.

While shareholder anger over executives getting rich while their corporations fail represents obvious self-interest, that doesn't mean the SRI agenda will be reduced to short-term, bottom line issues, said Jantzi.

"Even within this horrible situation in which we find ourselves, discussions around environmental issues, climate change, water, human rights have not fallen off the radar," he said.

As the new Barack Obama administration takes shape in Washington, the mood has turned distinctly against wild-west capitalism.

"You're hearing the Obama team coming in and talking about executive compensation reform. You're hearing them talk about creating sustainable, green energy and making that more affordable and acceptable. They're talking about the car companies and if they get a bail-out they need to be producing more hybrids. And so I'm encouraged," said Ellmen at the SIO.

"Is Canada going to be left behind? Well, it's hard to say," said Jantzi. "We take our lead from the United States in so many respects. There's no question that having a fragmented securities regime here is problematic."

Ottawa is talking about unifying Canada's provincial patchwork of regulatory regimes. Ellmen predicts it will now happen sooner, rather than later.

"Aren't we the flea on the elephant's tail? At best?"

Ensuring that the economic agenda goes beyond self interest is the right work for churches at this time, said Thomson.

"Whenever the economy goes sour, as it has already and will continue, there's a real temptation to fall into a camp where it's me against the world – where I've got to look out for my own," Thomson said. "I really hope religious institutions and our religious leaders can counteract that sort of rhetoric and that sort of mindset that says I've got to really retrench. What we need right now is actually more collective thought, more generosity and more community oriented action."