Get Up to Speed on Responsible and Sustainable Investment Strategies

Responsible Investing (RI) is not a fad, particularly not in light of the United Nations Glasgow Climate Change Conference taking place this week. And in fact, it has actually been in existence for a very long time, and it is picking up steam here in Canada , said Duane Green, President and CEO Franklin Templeton Canada, who provided a thoughtful and comprehensive expose of the subject at the 2021 Distinguished Advisor Conference.

“We are catching up to the rest of the world,” he said.  Responsible Investing, also called sustainable investing, is a process that takes into account important aspects of environmental, social and governance (ESG) issues.  Green stresses, it is not a product, it is an investment approach. There are various types of RI that use different focuses and themes but all of them are rooted in ESG integration.

RI is definitely a growing trend.  Global RI assets under management (AUM) reached US$35.3 trillion in 2020 in five major markets, up 15% since 2018.  RI AUM is approximately 36% of total global AUM.  The US and Europe account for more than 80% of global RI AUM.  Canada had the largest increase in absolute terms from 2018-2020 (48% growth).

According to the Responsible Investment Association (RIA) 2020 Canadian Investor Survey, Canadian investors are increasingly interested in responsible investing.

• 72% of respondents are interested in responsible investing (RI)

• While 75% agree they would like their financial advisor to inform them about RI, only 28% have been asked about RI options.

• 83% of the 18-34 age group are interested in RI and 50% currently own them. 59% of respondents aged 55+ are interested in RI and 20% currently own them.

• 45% of respondents said they are more likely to choose RI than they were a year ago. This jumps to 59% of the 18-34 age group, 51% of university graduates and 58% of households with kids.

Green warned that while RI is topical in 2021, some portfolio managers have been applying these processes for decades. He warns advisors to peel back the onion and investigate capability of managers that suddenly start promoting RI products or strategies.  “You have to be able to walk the walk, not just talk the talk,” he said.

Join us next year LIVE in Niagara Falls October 16-18 for DAC Acuity 2022 when the educational extravaganza will continue in-person! Take advantage of early-bird tuition rates and reserve your spot!

Want to learn from this year’s thought leadership? The online certificate course from DAC 2021 is available and includes the recorded presentations of this year’s speakers. Enrol in the Integrated Solutions in Practice Management course.