The Investment Funds Institute of Canada (IFIC) released a new report, June 11, called the Report on Responsible Investment. In it, IFIC provides an overview of responsible investing (RI) in Canada and around the world, including terminology and different approaches to RI, client demand, investment performance, the limitations of available data, and examines developments that will affect RI in the future.

IFIC strives to understand the evolving needs and preferences of Canadian investors,” says IFIC president and CEO, Paul Bourque. “As interest in responsible investing continues to grow, we created this report to help expand investor awareness, and to advocate for greater clarity on the range of industry approaches.” According to IFIC, more than $12-billion was invested in RI mutual funds and $654-million was invested in RI exchange-traded funds in Canada at the end of 2019. “Despite RI’s small share of mutual fund and ETF assets (RI represents 0.7 per cent of all mutual fund assets and 0.3 per cent of ETF assets), there are 16 firms (in Canada) offering 69 RI mutual funds and 10 firms offering 23 RI ETFs.”

IFIC says firms have a long history of providing RI products, but many have seen an explosion of interest in the approach in recent years. “With this interest has grown some debate and confusion over what responsible investment is and how it is done,” they write. The report also examines the motivations driving RI, and the performance of some RI strategies.

The report goes on to say that investment managers are reporting that clients and beneficiaries are increasingly aware that ESG (environmental, social and governance) factors are relevant to a company’s future performance. They’re putting pressure on decision makers to adopt RI approaches as a best-practice expectation; they increasingly inquire about RI and they’re demanding that their investments generate a positive impact beyond investment returns.

Citing research from the 2019 RIA Investor Opinion Survey, IFIC says 72 per cent of respondents have expressed interest in RI, up from 60 per cent in 2018; 79 per cent of respondents would like their financial services provider to inform them about RI options and, overall, 26 per cent say they currently own responsible investments.

To consult the full report, click here.