ESG and responsible investing
Investing with a greater purpose
Our values are at the core of every choice we make. Making decisions with greater purpose helps the world become a better place for everyone, which is why so many people are choosing to let their beliefs guide the way they invest.
As a leader in ESG investing, RBC Wealth Management is committed to a better future. Like many of our clients, we’re focused on community involvement, diversity and inclusion and environmental responsibility as a way to support both current and future generations. To help you create positive social and environmental impact, we offer several ways for you to invest that align with your values.
A growing trend
According to the Global Sustainable Investment Alliance, responsible investing assets in Europe skyrocketed to $14.075 trillion (USD) as of 2018. In that same year, these assets grew globally to $30.68 trillion (USD), and are projected to grow in the coming years.
Responsible investing is a process that applies environmental, social and governance (ESG) data to an investment portfolio. This encompasses a number of investing approaches, including socially responsible investing (SRI), ESG integration and impact investing.
Support companies that perform well on environmental, social and governance metrics.
Socially responsible investing
Create or withdraw support for companies/sectors in portfolio that do/don’t meet personal values.
Support social or environmental issues with the expectation of measurable results.
ESG: Integrating environmental, social and governance into your portfolio
ESG integration seeks investments in companies with leading environmental, social and governance metrics compared to their peers. These metrics may include:
Including climate change, natural resources conservation, pollution and waste management, and water scarcity.
Such as corporate philanthropy, community and government relations, workplace health and safety, human rights and diversity.
Including accounting practices, board accountability and structure, disclosure practices, executive compensation, corporate ethics, regulatory compliance and transparency.
Socially responsible investing
Socially responsible investing (also known as values-based or ethical investing) allows investors to use ESG data to align their personal values with their investment choices. This involves both negative and positive screening of companies, industries or sectors to make a financial influence that match their values.
Impact investments are made to generate social or environmental impact rather than just profit. An impact investor also wants to earn a return on their investment, but they may also be willing to take a capital loss as long as some tangible result for the investment can be seen. In that way, it is essential to be able to measure the impact of this investment. An example includes investment in low-income housing loan assistance, where a tangible impact is measurable (i.e., number of households able to afford housing) and the investor is likely to get his or her money back.
A third dimension of performance
Today, more people are using their money to make a difference. Sustainable products and solutions are more important than ever, and moving towards sustainable operations is now the standard across many industries.
If you are interested in learning more about investing with greater purpose, please contact your RBC Wealth Management relationship manager and ask how you can integrate responsible investing into your portfolio.
The investments or services contained in this document may not be suitable for all clients. It is recommended that clients or their representatives consult an independent investment adviser if there s any doubt about the suitability of such investments or services. Past performance is not a guide to future performance, future returns are not guaranteed and a loss of original capital may occur