For many investors, taking a closer look at their portfolio also means examining it through the lens of responsible or sustainable investing This type of investing considers environmental, social, and corporate governance (ESG) factors and can allow you, as an investor, to support companies that prioritize environmental stewardship, ethical practices, and social responsibility. Let’s explore just how we and Aviso Wealth can help you invest in your world with ESG in mind.
🌍 What Is Sustainable Investing?
At its core, sustainable investing integrates non-financial factors into the investment decision-making process. These factors fall into three main categories:
- Environmental: How a company manages its impact on the planet — carbon emissions, energy efficiency, waste management, and resource conservation.
- Social: How a company treats people — its employees, customers, suppliers, and the communities in which it operates.
- Governance: How a company is run — executive compensation, board diversity, transparency, and shareholder rights.
Investors use ESG criteria to evaluate whether a company is not only profitable but also responsible and resilient in the face of long-term challenges.
💡 Why It Matters Now
The urgency of climate change, social inequality, and corporate accountability has never been greater. From wildfires and floods to labour strikes and data breaches, the risks associated with ignoring ESG factors are becoming more visible and potentially costly.
Sustainable investing can offer a way to mitigate these risks while supporting companies that are actively working toward solutions. It’s not just about doing good, it’s about making smart, forward-thinking financial decisions.
📈 Does Sustainable Investing Perform Well?
One of the most common myths about sustainable investing is that it sacrifices returns for values. However, numerous studies have shown that ESG-focused portfolios can perform as well as traditional investments over the long term. Some reasons for this include:
- ESG funds often show lower volatility and stronger risk-adjusted returns.
- Companies with strong ESG practices tend to be better managed, more innovative, and more resilient during economic downturns.
- Investors are increasingly demanding transparency and accountability, which can drive long-term value creation.
🧭 How to Get Started
Sustainable investing is accessible to everyone, whether you’re just starting out or have a complex portfolio. Our advisors have Responsible Investment Specialist training, and they can help incorporate ESG into your plans. More of a DIY investor? Be sure to look for funds labeled as:
- ESG
- Sustainable
- Socially Responsible Investing (SRI)
As always, be sure to review a fund’s prospectus with your advisor to understand its strategy and holdings and if they meet your investment goals. In Canada, 71% of companies listed on the S&P/TSX Composite Index released a report in 2020 dedicated to the disclosure of ESG topics, up from 58% in 2019*.
Watch out for greenwashing, when companies exaggerate or misrepresent their sustainability efforts. Just like we’ve all been reading labels to ensure we’re buying Canadian, it’s important to double check the companies you may want to invest in. To avoid falling for greenwashing:
- Look for third-party certifications and transparent reporting.
- Check whether ESG claims are backed by measurable data.
- Be cautious of vague language like “eco-friendly” or “sustainable” without specifics.
🧘 Aligning Money with Meaning
Ultimately, sustainable investing is about intentionality. It’s a way to ensure your money is working not just for you, but for the greater good. Whether you’re passionate about climate action, human rights, or ethical governance, your investments can reflect those values.
As we move into the final stretch of the year, consider making sustainability a cornerstone of your financial strategy. It’s not just an investment in your future, it’s can be an investment for a better world.
* https://www.cer-rec.gc.ca/en/about/publications-reports/canada-energy-regulator-esg/canada-energy-regulator-esg-overview.html