The Responsible Investment Association (RIA), Canada’s industry association for responsible investment issued its 2020 Canadian Responsible Investment Trends Report today, revealing a strong growth trend for ESG investing in the country. The RIA reports, which is issued biennially, found that responsible investing (RI) assets under management in Canada grew nearly 50% over a two year period from $2.1 trillion to $3.2 trillion at the end of 2019.
To conduct the study, researchers for the RIA collected survey data from more than 100 asset managers, asset owners, and publicly-available sources, and supplemented the data using by publicly-available sources such as annual reports. Assets classified as belonging to a responsible investing (RI) strategy fall into seven categories including ESG integration, shareholder engagement, negative screening, norms-based screening, positive screening, thematic ESG investing, and impact investing.
Overall, 91% of organizations surveyed reported having a responsible investing policy. When asked for the most common reasons to consider ESG investing, respondents’ most commonly cited the need to minimize risk over time, followed by improving returns. The top 3 most commonly cited environmental issues by respondents were climate change mitigation, energy efficiency, and climate change adaptation. Social issues included labor practices, human rights and health and safety, while board diversity & inclusion and executive pay were the top responses for governance issues.
Dustyn Lanz, CEO of the RIA, said:
“This research confirms that responsible investment is not a trend; it’s a paradigm shift. The investment industry is undergoing a secular transformation, stewarding assets towards more sustainable and inclusive outcomes for society while protecting long-term shareholder value. For asset managers and financial advisors, RI expertise is no longer ‘a nice to have’; it’s table stakes.”
The 2020 Canadian Responsible Investment Trends Report was sponsored by NEI Investments. Frederick M. Pinto, Senior Vice President and Head of Asset Management for NEI Investments, said:
“Asset managers are hearing loud and clear that Canadians want to make a difference through their investments, with ‘investor demand for ESG/impact’ predicted to be the top driver of RI over the next two years. NEI is committed to helping guide the industry toward a greater focus on active ownership and impact solutions to help meet that demand.”
Click here to see the full report.