How will you invest with greater purpose? More and more people are turning to sustainable investing – a process that applies environmental, social and governance (ESG) data to your investment portfolio.

This type of investing isn’t new – sustainable investing assets have skyrocketed in recent years. According to Morningstar, sustainable investing funds in Europe have grown to $1.63 trillion (USD) as of March 2021. As companies continue to innovate and strive for positive impacts, sustainable investing opportunities continue to increase.

Like many of our clients, RBC Wealth Management focuses on community involvement, diversity and inclusion and environmental responsibility to support both current and future generations. To help you create a positive social and environmental impact, we offer a broad range of solutions designed to align with your values and financial goals.

Sustainable investing

We'll help you invest with purpose and apply sustainable investing approaches to your wealth plan. When evaluating investments from a sustainability perspective, we use a framework to determine if an investment is truly designed to meet the expectations of a sustainable investment.

Our framework is based on three key principles: avoiding harm and mitigating risk, business practices and contributing to solutions.

Our worldwide team also performs due diligence to make sure the investments we offer meet established criteria.

Avoiding harm and mitigating risk

An understanding of the ESG risks different sectors and companies are exposed to can be incorporated into your investment decisions. You can look at various ESG metrics to achieve this, including those related to:

Environmental concerns: Climate change, natural resources conservation, pollution and waste management, and water scarcity

Social issues: Corporate philanthropy, community and government relations, workplace health and safety, human rights and diversity

Governance topics: Accounting practices, board accountability and structure, disclosure practices, executive compensation, corporate ethics, regulatory compliance and transparency

Socially responsible investing

You may also use ESG data to create or withdraw support for companies and sectors that do or don’t align with your personal values. This involves both negative and positive screening of companies, industries or sectors to eliminate or select investments.

Negative screening

No tobacco, no alcohol, no weapons.

Positive screening

Social housing, Renewable energy, Human rights

Business practices

Seek out companies that cultivate good business practices, corporate behaviour and citizenship records.

Companies which generate positive outcomes for their stakeholders are more likely to experience growth and capital appreciation in the long-term. In other words, companies that prioritise stakeholders through environmental, social and governance issues generate superior long-term financial performance across a range of metrics – including sales growth, return on equity, return on invested capital and value generation, in comparison to peers who do not integrate ESG issues into their strategy.

Contribute to solutions

Assess the extent to which a given investment generates one or more significant positive outcomes for the planet, society or individuals. We look to support social or environmental issues with the expectation of achieving measurable results rather than profits alone.

Our commitment

RBC is a leader in sustainability. Our approach to sustainability is central to our business and to our stated purpose: to help clients thrive and communities prosper. RBC is listed as a holding in several responsible investing indexes, including Pax Ellevate Management’s Impax Global Women’s Leadership Index and the FTSE4Good Index. Additionally, RBC received the 2021 Catalyst Award for initiatives that have accelerated progress for women and elevated inclusion within our organization.

We also believe capital can be a force for positive change, as clearly demonstrated by a new business target: $500 billion in sustainable finance by 2025 and net-zero emissions in our lending by 2050, which is aligned with the global goals of the Paris Agreement.

This document contains general information only. It is not intended to be specific investment advice, or an investment recommendation. Please bear in mind that the investments and services contained within this document may not be suitable for all investors. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

RBC1925

RBC Wealth Management can help you integrate sustainable investing into your portfolio.