Latest scoop on responsible investing

Canada Life - Aug 28, 2022
Responsible investing is not a passing fad. Learn about how these funds are performing and their growth
Woman examining solar energy panels.

You may have heard of responsible investing (RI), but is it just a passing fad? Do you have to sacrifice returns to invest responsibly? The answer is no. If you’re passionate about topics such as climate change, women in leadership, gender equity, water scarcity and more, RI might be the right solution for you. RI gives you the chance to invest in funds and companies whose values align with yours. Investing can be about both purpose and performance.

Responsible Investing, ESG and sustainable investing are broad umbrella terms that refer to the incorporation of environmental, social, and governance (ESG) considerations into portfolio decisions.

How do these investments typically perform?

RI funds are usually either on par with conventional funds or outperforming them. As well as mitigating risk, environmental, social and governance (ESG) factors may also help improve returns. 

History of performance of RI funds: 

  • Last three years: 63% outperformed their average asset class return.1
  • Last five years: 65% outperformed their average asset class return.
  • Last 10 years: 51% outperformed their average asset class return.

Why do they perform so well?

Risk mitigation: ESG risk events like accounting scandals, mine explosions and oil spills can mean big losses for shareholders. Assessing a company’s ESG performance provides a more thorough view of an organization’s management practices and prospects. Higher ESG scores (an ESG score is a measurement of a company’s level of sustainability) can lead to lower costs of capital and better long-term operational decision-making.

ESG practices could help prevent some tragedies and help protect shareholder profits.

Why is RI growing?

Here are three reasons why RI is growing:

  1. Investment success
    • By incorporating ESG factors into the process of selecting and managing investments ESG funds in general help reduce the risk of investing in damaging business practices. Because of this, they are usually either on par or outperforming standard investments.2
  2. Investor demand
    • People like you may want the opportunity to enjoy financial gains while also helping make positive changes in the world.3 In 2021, Canadian responsible investing assets accounted for 61.8% of total Canadian assets under management.4
  3. Impacts on public policy and legislation
    • Investors want to use their money to support legislation that consider ESG factors when making investment decisions.3 Here are two examples:
      1. The Government of Canada launched the Sustainable Finance Action Council to help lead the Canadian financial sector towards integrating sustainable finance into standard industry practice.
      2. The United States implemented the Sustainable Investment Policies Act
    • More legislation and environmental consciousness will only further encourage the opportunities and demand for sustainable investment opportunities.3

How much has RI grown?

The popularity of RI is continuing to surge globally and in Canada. A recent survey revealed that 77% of respondents to an investor opinion survey in Canada agreed that companies with strong ESG practices make better long-term investments, and 82% said they’d like to allocate a portion of their portfolio to RI.4

Let’s take a closer look at the growth in Canada: combined, net assets in ESG mutual funds and Exchange Traded Funds (ETF) have quadrupled since 2011:
Growth of RI Funds in Canada. The largest growth was from 2020 to 2021 when RI mutual fund assets more than doubled from $17.3 billion to $33.6 billion.

Source: 2020 IFIC Investment Funds Report and 2021 IFIC Investment Funds Report.

As for the global market, the latest Global Sustainable Investment Review showed that global responsible investment assets reached US$30.7 trillion at the start of 2018, a 34% increase from 2016.4

Wondering which RI solution is right for you? Let’s connect!

RI may be the future of investing. RI is by no means a passing fad. This may be the right fit for you if you’re looking for the opportunity to drive change with your investments. I can help you find the right responsible investing solution to help you reach your goals. Let's talk more about how you can invest according to your values without sacrificing potential returns. You can also learn more about a new Responsible Investing solution available to you, see Canada Life Sustainable PortfoliosTM on our website.

1. As of Sept. 30, 2021. RIA Canada (2021). Quarterly Responsible Investment Fund Report: Highlights from Q3 2021. 
3. The Growth of Sustainable Investing (
4. RIA Canada (2022). Intro to Responsible Investing (RI). RIA.,of%20their%20portfolio%20to%20RI 
5. Sustainable Investment Policies Act promotes the disclosure and transparency of sustainable investment policies. Learn more here:  

Canada Life Sustainable Portfolios are available through a segregated fund policy issued by Canada Life or as a mutual fund managed by Canada Life Investment Management Ltd. offered exclusively through Quadrus Investment Services Ltd. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. A description of the key features of the segregated fund policy is contained in the information folder. Any amount allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value. 

Canada Life and design, and Canada Life Sustainable Portfolios are trademarks of The Canada Life Assurance Company. 



Ask an advisor: What is responsible investing – Canada Life

Learn to how your investments can help build a positive, more sustainable future.



View video script


Description: This animated video introduces a character named Krista, her partner and her advisor with illustrated graphics to explain responsible investing.

Text: Ask an advisor: What is responsible investing?

Description: An illustration of the world with leaves draws into the frame.

Krista: My partner and I just adopted our first baby. We want to start saving for her future, while also investing in a better world for her to live in.

Description: Krista holds her newborn baby while talking on the phone in her living room. Her partner comforts her.

Advisor: Responsible investing is a way to make the world a better place while also helping you reach your financial goals.

Description: Cut to the advisor sitting in her office, talking through a headset. A laptop sits in front of her.

Advisor: It’s a way to invest in companies that show they care about society, the environment and their employees with the way they do business.

Description: Illustrations animate into frame: a skyscraper to represent companies, a group of people for society, a wind turbine for the environment and two people talking for employees.

Advisor: It also limits investing in companies with damaging or unsustainable business practices.

Description: The camera pans to eight pie graphs with investment graphics. The unsustainable investments get smaller.

Krista: But will I have to sacrifice performance?

Description: Cut to Krista on the phone.

Advisor: Most people don’t realize these investments perform just as well or better than traditional ones.

Description: Two line graphs appear, each labelled “Traditional” and “Responsible,” showing the same investment growth over time.

Advisor: If you believe in more sustainable products and businesses,

Description: The line from the “Responsible” graph continues and draws a world illustration into the frame.

Advisor: responsible investing could be for you.

Description: Cut to the advisor in her office.

Advisor: Let’s talk about how responsible investing can fit in your financial plan.

Description: The frame splits in half and Krista appears on the phone. She smiles.

Text “Let’s talk. Contact me today.” appears onscreen with the Canada Life logo and legal line: “Canada Life and design are trademarks of The Canada Life Assurance Company. 1-204-946-1190.”