Canadian Responsible Investments Surpass $1 Trillion Says 2014 Trends Report
Thursday, January 22, 2015
The value of Canadian investments managed under “responsible investing” criteria climbed dramatically over two years as money managers increasingly added environmental, social or governance factors to their investment decisions.
A survey of investment managers shows Canada had $1.01-trillion of assets under management at the end of 2013 that were invested using some form of responsible investing criteria, a 68-per-cent increase from $601-billion two years earlier.
A report to be released Thursday by the Responsible Investment Association and RBC Global Asset Management says 31 per cent of financial assets under management in Canada’s investment sector are now invested using responsible investing strategies.
Responsible investment techniques range widely from applying environmental, social and governance (ESG) factors in proxy voting decisions to more direct strategies to invest in green technologies, or to finance “impact” community investment projects that provide social or environmental benefits. Some organizations screen investments to choose the “best in class” companies in different sectors based on positive ESG performance, while some exclude certain investment sectors entirely, such as tobacco producers or weapons manufacturers.
RBC chief investment officer Dan Chornous, who oversees the bank’s investment management division, said ESG criteria are increasingly being used by investment managers to identify risks facing companies that aren’t captured by traditional investment analysis. “We have begun to more formally integrate ESG criteria across all of our investment classes,” Mr. Chornous said.
Most assets identified in the survey – $821-billion – are held by major pension funds that use some form of responsible investing criteria. A further $192-billion is held by other investment managers such as mutual funds.