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Tag: socially responsible investing

  • What’s behind the retreat in responsible investing? – MoneySense

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    The decline in RI usage was driven by fewer new advisors offering RI to clients, the 2025 Advisor RI Insights Study said. The proportion of clients using a responsible methodology was roughly steady at 18%, however, compared to 19% recorded two years ago. Increasingly, it is clients initiating conversations about responsible strategies (41%) over advisors (28%). Still, nearly half of advisors (46%) agree that questions about RI should be included in Know Your Client forms used with new clients.

    “While adoption has steadied, investor demand for RI remains strong and advisors remain open to closing the service gap,” Patricia Fletcher, CEO of the RIA, said in a release. “Mobilizing wholesalers and equipping advisors with tools and training, we can empower advisors to align portfolios with their clients’ values.”

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    The reasons for the RI pullback could be related to economic headwinds, the backlash against environmental, social, and governance (ESG) criteria in the U.S., or the maturation of the RI niche, with fewer new investment products coming on the market, the study’s authors speculated. 

    This reversal is consistent with public attitudes reflected in President Donald Trump’s recent dismissal of climate change as a “con job” and Canada’s withdrawal of carbon taxes and electric vehicle subsidies.

    But it may also be rooted in the relatively poor performance of RI investments in recent years. 

    In the early years of what was then called “ethical investing”—in the 1990s and early 2000s—many RI funds could boast superior returns to broad index funds. RI advocates pointed to the way ESG criteria served as a force for risk mitigation, steering clients away from potentially unsustainable industries (tobacco, coal) and companies at greater risk of lawsuits and increased regulation.

    The last decade, by contrast, has been marked by strong performance of major indices like the S&P 500 and underperformance by sectors commonly overweighted in RI portfolios, such as renewable energy. In the RIA survey, “Concerns about returns” ranked as the second most common reason advisors cited for not including RI in client portfolios (47%), after “Lack of client interest/demand” (61%).

    Other factors possibly contributing to the RI pause include the rising market share of exchange-traded funds (ETFs) over mutual funds—76% of advisors offering RI said they predominantly use mutual funds, compared to just 8% using ETFs—and skepticism fed by so-called “greenwashing.” Thirty-five percent of advisors polled by RIA cited “Concerns about the validity of ESG benefits” among their reasons for not offering RI portfolios.

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    About Jessica Barrett


    About Jessica Barrett

    Jessica Barrett is the editor-in-chief of MoneySense. She has extensive experience in the fintech industry and personal finance journalism.

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    Jessica Barrett

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  • Sister activism: Nuns push for change through stock investments – MoneySense

    Sister activism: Nuns push for change through stock investments – MoneySense

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    Faith-based shareholder activism dates back to 1970s

    Up until the 1990s, the nuns had few investments. That changed as they began to set aside money to care for elderly sisters as the community aged.

    “We decided it was really important to do it in a responsible way,” said Sister Rose Marie Stallbaumer, who was the community’s treasurer for years. “We wanted to be sure that we weren’t just collecting money to help ourselves at the detriment of others.”

    Faith-based shareholder activism is often traced to the early 1970s, when religious groups put forth resolutions for American companies to withdraw from South Africa over apartheid.

    In 2004, the Mount St. Scholastica sisters joined the Benedictine Coalition for Responsible Investment, an umbrella group run by Sister Susan Mika, a nun based at a Texas monastery who has been working in the field since the 1980s.

    The Benedictine Coalition works closely with the Interfaith Center for Corporate Responsibility, which acts as a clearinghouse for shareholder resolutions, coordinating with faith-based groups—including dozens of Catholic orders—to leverage assets and file on social justice-oriented topics.

    The Benedictines have played a key role at ICCR for years, said Tim Smith, a senior policy advisor for the centre. It can be discouraging work, where the needle only moves slightly each year, but he said the sisters “have the endurance of long-distance runners.”

    The resolutions rarely pass, and even if they do, they’re usually non-binding. But they’re still an educational tool and a means to raise awareness inside a corporation. The Benedictine sisters have watched over the years as support for some of their resolutions has gone from low single digits to 30% or even a majority.

    Gradually environmental causes and human rights concerns have swayed some shareholders, even as a growing backlash foments against investments involving ESG (environmental, social and governance concerns).

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    The Associated Press

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  • Responsible investing is growing in Canada. Which ESG factors matter most? – MoneySense

    Responsible investing is growing in Canada. Which ESG factors matter most? – MoneySense

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    According to the 2023 Canadian Responsible Investment Trends Report, released on Oct. 26 by the Responsible Investment Association (RIA), the answer is yes: investors continue to prioritize responsible investing, and more growth is expected as local and international reporting standards improve. Survey responses are from Canadian institutional asset managers and asset owners who answered questions in mid-2023. The data shared paints a picture of the industry on Dec. 31, 2022. Here are some highlights from the report.

    About half of assets under management are invested responsibly

    With $2.9 trillion of assets under management in responsible investments (RI) in Canada, this is no small industry. And while this number is a slight decrease from the previous year, that’s a product of market conditions: it actually reflects a higher proportion of all Canadian professionally managed assets than in 2021, and RI’s market share has grown from 47% to 49%.

    Responsible investing is a risk management strategy

    You might think the main motivation for anyone choosing responsible investing is what’s in the ESG acronym: environmental, social and governance factors. And while those are definitely important—14% of survey respondents said their organization’s primary reason for choosing RI was to fulfill its mission, purpose or values—there are many other factors at play. One of the big ones? A common goal for any type of investment: minimizing risk and maximizing value.

    In fact, 35% of organizations surveyed said that minimizing risk over time was their primary reason for choosing responsible investing, and a further 41% ranked it second or third. And 61% said that improving returns over time was one of the top three factors influencing their choice to prioritize ESG investments.

    Another issue that mattered to many respondents was fiduciary duty—their obligation to maximize their clients’ returns—which 26% listed as their organization’s primary motivation.

    Which ESG factors do organizations consider? All of them

    The risks facing our society due to climate change are top of mind for Canadians, and the investors here are no exception. This year, 93% of respondents said that greenhouse gas emissions were a factor they considered in their investment decisions, an increase from 85% in 2022. Climate change mitigation and climate change adaptation were the other top environmental factors mentioned by respondents, at 84% and 76% respectively.

    Top social factors mentioned by respondents include equity, diversity and inclusion (81%), human rights (76%), labour practices (76%), and health and safety (71%). The governance factors that respondents deemed significant included board diversity and inclusion (87%), executive pay (71%) and shareholder rights (70%).

    Many strategies make for comprehensive decisions

    Organizations surveyed use a number of tools to help themselves include ESG factors in their decision-making. These three topped the list:

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    Kat Tancock

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