Align your financial goals with your personal values
RBC Wealth Management supports the merits of responsible investing. RBC is committed to community involvement, diversity and inclusion, and environmental responsibility to help the world become a better place—for both current and future generations. To help make good on our commitment to have a positive social and environment impact, we have pathways for you to invest capital in a more responsible manner.
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ESG trends for 2022
A growing trend
Responsible investing assets have skyrocketed to $12 trillion as of 2018, a 38% increase in two years, according to the US SIF Foundation. This is projected to grow exponentially.
Responsible investing encompasses a number of investing approaches you may have heard of, including Socially Responsible Investing (SRI), Environmental, Social, and Governance Investing (ESG), and Impact Investing.
Socially responsible investing
Create or withdraw support for companies/ sectors in portfolio that do/don't meet personal values.
Support companies that perform well on environmental, social and governance metrics.
Support social or environmental issues with the expectation of measurable results.
Socially responsible investing
Socially responsible investing is also known as values-based or ethical investing. Investors are looking to make a positive change by aligning their personal values with their investment choices. This involves both negative and positive screening of companies, industries or sectors to make a financial influence that match their values.
Environmental, social and governance (ESG) investing
ESG investors are seeking companies with leading environmental, social and governance metrics compared to their peers. These metrics may include:
Environmental concerns — Including climate change, natural resources conservation, pollution and waste management, and water scarcity.
Social issues — Such as corporate philanthropy, community and government relations, workplace health and safety, human rights and diversity.
Governance topics — Including accounting practices, board accountability and structure, disclosure practices, executive compensation, corporate ethics, regulatory compliance and transparency.
Impact investing is not charity. It is an investment where an investor is hoping first and foremost to generate social or environmental impact. An impact investor also wants to earn a return on their investment. However, they may be willing to take a capital loss as long as some tangible result for the investment can be seen. In that way, it is essential to be able to measure the impact of this investment. An example includes investment in low-income housing loan assistance, where a tangible impact is measurable (i.e., number of households able to afford housing) and the investor is likely to get his or her money back.
Today, more consumers are making a difference with their dollars. Sustainable products and solutions matter. Whether it’s your preference for clean energy, consumer goods or clothing, the trend toward more Earth-conscious companies is not likely to slacken.
If you are interested in learning more about this topic, please contact me today to learn more or set up a free consultation.
Non-U.S. Analyst Disclosure: Jim Allworth, an employee of RBC Wealth Management USA’s foreign affiliate RBC Dominion Securities Inc. contributed to the preparation of this publication. This individual is not registered with or qualified as a research analyst with the U.S. Financial Industry Regulatory Authority (“FINRA”) and, since he is not an associated person of RBC Wealth Management, he may not be subject to FINRA Rule 2241 governing communications with subject companies, the making of public appearances, and the trading of securities in accounts held by research analysts.
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