2020 Canadian RI Trends Report
Canadian ESG Assets Surge to $3.2 Trillion
The 2020 Canadian Responsible Investment Trends Report reveals that responsible investment (RI) continues to grow rapidly in Canada. The biennial report 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.
Canadian Responsible Investment Assets (Billions)
- $3.2 trillion in RI assets under management (AUM).
- 48% growth in RI AUM over a two-year period.
- RI represents 61.8% of Canada’s investment industry, up from 50.6% two years ago.
- Retail RI mutual fund assets increased from $11.1 billion to $15.1 billion, up 36% over two years. RI ETF assets more than doubled from $240.6 million to $654.9 million during the same period.
- The two most prominent RI strategies by AUM are: (1) ESG integration and (2) shareholder engagement.
- The ESG frameworks most often used by survey respondents in their investment analysis are: (1) Task Force on Climate-related Financial Disclosures (TCFD); (2) United Nations’ Sustainable Development Goals (SDGs); and (3) Sustainability Accounting Standards Board (SASB).
- Survey respondents reported the top four reasons for considering ESG factors are: (1) minimizing risk over time, (2) improving returns over time, (3) fulfilling fiduciary duty, and (4) fulfilling mission, purpose or values.
- 97% of respondents expect moderate to high levels of growth in RI over the next two years.
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.