TORONTO, Jan. 22, 2015 /CNW/ - Responsible investing (RI) is experiencing rapid growth in Canada, according to the 2014 Canadian Responsible Investment Trends Report. The biennial report, released today by the Responsible Investment Association (RIA) and RBC tracks the evolution and growth of RI in Canada.
Responses from investors surveyed for the report suggest that 31 per cent of invested assets under management in Canada involve some aspect of RI. This figure refers to strategies which consider aspects of environmental, social and corporate governance (ESG) criteria in the selection and management of investments.
"A growing number of individual and institutional investors are making investment decisions seeking to reduce risk, enhance returns and have a positive impact on the environmental, social and economic systems in our society," said Deb Abbey, CEO of the RIA.
According to the survey data, as of December 31, 2013, assets in Canada managed using one or more RI strategies increased from $600 billion to more than $1 trillion in the prior two years. This robust growth represents a 68 per cent increase in RI assets under management.
- $1 trillion in RI assets under management
- 68 per cent increase in two years
- Comprises 31 per cent of Canadian investment industry AUM
- RI mutual fund assets up 52.3 per cent vs. 29.8 per cent for non-RI mutual funds
- Retail assets over $60 billion
- Canadian impact investment assets now stand at $4.13 billion, reflecting 9.5 per cent growth since 2012
- 87 per cent of impact investors who target competitive returns either met or outperformed expectations in 2013
"There is growing consensus among investors that accurate valuation and comprehensive risk management requires greater consideration of a range of ESG issues including climate change, supply chain management, corporate corruption and human rights," says Abbey.
"The report shows that ESG criteria are increasingly being used by investment managers to help identify risks that are not necessarily surfaced by traditional investment analysis," said Dan Chornous, CIO of RBC GAM. "Our team of investment professionals have a long standing commitment to a range of responsible investment strategies, and we have begun to more formally integrate ESG criteria across all of our investment classes."
The Trends Report also focuses on impact investing, which is a small, yet flourishing segment of RI. Impact investing refers to investments that provide solutions to social or environmental challenges by generating positive, measurable social or environmental impacts as well as a financial return. According to the RIA's survey, Canadian impact investment assets now stand at $4.13 billion, reflecting 9.5 per cent growth since 2012. The survey found that 87 per cent of impact investors who target competitive returns either met or outperformed their expectations in 2013.* This finding supports the case that investing for social or environmental impact can generate reasonable returns.
"We are encouraged by the steady growth of impact investing, and the confirmation that it can deliver attractive returns that satisfy investors' expectations. We hope that RBC's commitment to social finance will not only catalyze impact investing in Canada, but will also encourage other organizations to make similar investments that generate positive change," said Sandra Odendahl, Director of Corporate Sustainability and Social Finance.
* Investments are not guaranteed. Values change frequently and past performance may not be repeated.
About the Canadian RI Trends Report
The Responsible Investment Association (RIA) publishes the Canadian Responsible Investment Report on a biennial basis to understand and assess the characteristics of responsible investment in Canada. For the current report, the RIA's researchers collected data from over 170 investment managers and asset owners. Primary research was supplemented by secondary sources such as annual reports. The researchers avoided double counting by subtracting approximately $140 billion in RI assets which overlapped between external managers and funds of funds.
The 2015 Report is sponsored by RBC.
About the Responsible Investment Association
The Responsible Investment Association (RIA) is Canada's leader on responsible investment (RI). RI refers to the integration of environmental, social and governance (ESG) criteria into the selection and management of investments as well as socially responsible and ethical investing. We are a national, nonprofit, membership-based organization composed of financial institutions, mutual fund companies, investment management firms, financial advisors, and various organizations and individuals who practice and support responsible investing. The RIA and its members strongly believe that RI is a valuable investment tool to enhance returns, reduce risk, and catalyze positive social change.
About RBC Global Asset Management
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC), and includes institutional money managers BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to individual, high-net-worth and institutional investors through mutual funds, exchange-traded funds, hedge funds, pooled funds, separate accounts and specialty investment strategies. RBC GAM group of companies manage more than $350 billion and have approximately 1,200 employees located across Canada, the United States, Europe and Asia.
ABOUT RBC'S COMMITMENT TO COMMUNITY AND SUSTAINABILITY:
Royal Bank of Canada (RY on TSX and NYSE) is Canada's largest bank and one of the largest banks in the world, based on market capitalization. We employ approximately 78,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 38 other countries. For more information, please visit rbc.com. RBC is recognized among the world's financial, social and environmental leaders and is listed on the 2015 Dow Jones Sustainability World Index, the DJSI North American Index, the Jantzi Social Index and the FTSE4Good Index. RBC is one of Canada's Greenest Employers, and one of Canada's 50 Most Socially Responsible Corporations. Learn more at www.rbc.com/community-sustainability.
RBC supports a broad range of community initiatives through donations, sponsorships and employee volunteer activities. In 2014, we contributed more than $111 million to causes worldwide, including donations and community investments of more than $76 million and $35 million in sponsorships.
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