Friday, January 23, 2015

RIA launches 2015 Responsible Investment Trends Report

At a boisterous party for the launch of the RIA’s 2015 Canadian Responsible Investment Trends Report, the SRI community celebrated a major milestone: over one trillion dollars in RI assets under management.

The report identifies 3 factors that contributed to this growth. These are: the adoption of RI strategies by large pension funds, new entrants to the industry particularly among investment managers and qualitative factors including personal values, increased awareness of ESG risks and generational transfer of wealth. Read more about the report here.

Remarks by Michael Jantzi, CEO of global research powerhouse Sustainalytics, provided food for thought. Michael began by acknowledging the RIA, its predecessor, the SIO, and everyone in the room whose contributions have brought us to where we are today. He identified the broader acceptance of sustainability, “study after study shows sustainability is a top 3 priority for CEOs globally”, as something which leads naturally to discussion of ESG issues. Showing how pension fund managers’ thinking has evolved, Michael gave us this inspiring quote from Peter Borgdorff, head of PFZW, the second largest pension fund in the Netherlands,”A good pension is worth nothing in a polluted and unsafe world. We intend to use the power of this money to bring a better world closer,"  

On the retail side, assets showed significant growth, but remain small relative to institutional assets. As someone who has worked in retail for many years, I was pleased to hear Michael say “Retail deserves more attention from the responsible investment community. We will not capture all the opportunities if it’s only about gains on Wall Street or Bay Street.”

A number of advisors who are new to SRI attended the launch, testament to the attractiveness of SRI as a business building strategy. Media coverage of issues such as the collapse of the Rana Plaza factory in Bangladesh and the Northern Gateway pipeline have more investors asking their advisors, ‘what’s in my portfolio?’

Tammy Laframboise, a long time professional member of the RIA, believes that growth in SRI funds will continue to outpace growth in other mutual funds,”SRI funds are managed with a longer time horizon and so are better able to withstand the increasing volatility in the market. “

Confirming this, the Report identified the top 3 reasons for considering ESG criteria in the investment process are to minimize risk, client or beneficiary demand, and to improve returns over time.

Sandra Odendahl of RBC summed it up neatly when she welcomed us to the event, “SRI is growing, RI is growing, Impact Investing is growing. You can make money and do good. Yay!”


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