Canadian ESG Assets Surge to $3.2 Trillion
TORONTO--(BUSINESS WIRE)--The 2020 Canadian Responsible Investment Trends Report reveals that responsible investment (RI) continues to grow rapidly in Canada. The biennial report, released today by Canada’s Responsible Investment Association (RIA), tracks the scale, trends, and outlook for responsible investment, which refers to investments that incorporate environmental, social and corporate governance (ESG) issues into the selection and management of investments.
According to the latest available data, RI assets grew from $2.1 trillion at the end of 2017 to $3.2 trillion as at December 31st, 2019. This represents a 48% increase in RI assets under management (AUM) over two years. These figures reflect assets that fall into seven different RI strategies or categories including ESG integration, shareholder engagement, negative screening, norms-based screening, positive screening, thematic ESG investing, and impact investing.
Responsible investing now accounts for 61.8% of Canadian AUM, up from 50.6% two years earlier. Retail RI mutual fund assets increased from $11.1 billion to $15.1 billion, up 36% over two years. This growing market share shows that Canadian investors increasingly view ESG factors as important components of investment decisions, with an overwhelming majority of 97% of respondents expecting moderate to high levels of growth in RI over the next two years.
“This research confirms that responsible investment is not a trend; it’s a paradigm shift,” said Dustyn Lanz, CEO of the RIA. “The investment industry is undergoing a secular transformation, stewarding assets towards more sustainable and inclusive outcomes for society while protecting long-term shareholder value.” He added, “For asset managers and financial advisors, RI expertise is no longer ‘a nice to have’; it’s table stakes.”
“Asset managers are hearing loud and clear that Canadians want to make a difference through their investments, with ‘investor demand for ESG/impact’ predicted to be the top driver of RI over the next two years,” said Frederick M. Pinto, Senior Vice President and Head of Asset Management for NEI Investments. “NEI is committed to helping guide the industry toward a greater focus on active ownership and impact solutions to help meet that demand.”