The 2016 Canadian Responsible Investment Trends Report reveals that responsible investment (RI) is growing rapidly in Canada. The biennial report, released today by the Responsible Investment Association (RIA) tracks the evolution and growth of RI in Canada. RI is defined as investments that incorporate environmental, social and corporate governance (ESG) criteria.
According to survey data, as of December 31, 2015, assets in Canada managed using one or more RI strategies increased from $1.01 trillion to $1.51 trillion in the prior two years. This robust growth represents a 49% increase in RI assets under management during the two-year period.
Responsible investing is also taking a greater share of the investment industry. The data shows that 38% of assets under management in Canada incorporate a responsible investment strategy, up from 31% two years prior.
“Individual and institutional investors increasingly recognize that incorporating ESG factors into investment decisions can reduce risk and enhance returns while contributing to positive societal impact,” said Deb Abbey, CEO of the RIA.
“In Canada and around the world there is a growing consensus among investors that information related to ESG issues such as climate change, human rights, diversity, and corporate corruption is material for investment decisions,” said Abbey. “Systematically considering ESG factors is a component of accurate valuation and comprehensive risk management.”
Report Highlights Include:
- $1.5 trillion in RI assets under management
- 49% increase in two years
- Responsible investing represents 38% of Canadian investment industry
- Individual investors’ RI assets up 91% in two years
- Pension fund assets make up 75% of RI industry’s growth, increasing by $374 billion, or 45%, in two years
- 80% of respondents expect moderate to high levels of growth in RI over next two years
- Asset managers and owners ranked the following as their top motivations for incorporating ESG factors into investment decisions: (1) to minimize risk over time; (2) to improve returns over time; (3) to fulfill fiduciary duty.
“We are not surprised, but we are very pleased by the continued growth in responsible investing,” said John Kearns, CEO of NEI Investments. “For over 30 years, our investors have told us how important it is to invest in alignment with their personal values. This trend not only validates that approach, it reinforces NEI’s core commitment: to make money for our investors, while also making a positive difference.” Frederick Pinto, CEO of OceanRock Investments Inc. would agree.
“We’re thrilled to see the continued growth of responsible investing in Canada, which reflects a prevailing concern for sustainable development,” he said.
To learn more about RIA Canada and the report, click here